Up 100% in 1 year! Nuvama sees further upside in Sterling and Wilson Renewable Energy stock; here's why

Shares of Sterling and Wilson Renewable Energy have delivered over 100 per cent return in the last 12 months. The stock is also in focus as the firm reported profit in the fourth quarter after 12 quarters of losses.

Consolidated net profit came at Rs 1.5 crore in the March 2024 quarter against a loss of Rs 417 crore in the March 2023 quarter. Before this, the company last reported a profit of Rs 22.69 crore in the December 2020 quarter.

Revenue from operations rose to Rs 1,178 crore in the March quarter against Rs 88 crore revenue in the corresponding period of last year. Recurring overheads came at Rs 85 crore and non-recurring overheads aggregated to Rs 85 crore. Forex gains in the March 2025 quarter stood at Rs 7 crore.

In its recent report, Nuvama Institutional Equities maintained a 'Buy' rating on the stock with a target price of Rs 850. It forecasts a V-shaped earnings recovery from FY25E, accelerating to a hockey stick curve on a strong global outlook.

"With global solar PV capacity poised to more than double by 2026, immense opportunities are in the offing for Indian companies, particularly Sterling and Wilson Renewable Energy, to scale up globally, leveraging India's lowest PV installation cost," it said.

"Rising environmental concerns on carbon emission from fossil fuel is likely to accelerate the pace of G H2 adoption. This should further encourage investments in renewables, particularly solar," it added.

In Nuvama's view, Sterling and Wilson Renewable Energy shall likely turn around at the PAT level even at 50% execution of the existing order book of Rs 8000 crore. The company turned around on gross profit in the first quarter of FY24 and sustained the momentum throughout FY24.

"Proceeds from QIP and promoters' indemnity will likely expedite project execution besides paying down debt. High operational leverage benefits shall thus kick in, augmenting internal cash flows," it said.

About Sterling and Wilson Renewable Energy Limited

Sterling and Wilson Renewable Energy Limited is an end-to-end renewable engineering, procurement, and construction (EPC) solutions provider.

It provides EPC services primarily for utility-scale solar power projects focusing on project design and engineering and manages all aspects of project execution from conceptualizing to commissioning.