Sterling and Wilson’s Net Profit Reaches ₹1.25 Billion in 1H of FY 2020

Sterling and Wilson Solar Ltd. (SWSL), the solar engineering and construction arm of the Shapoorji Pallonji Group, has announced its results for the second quarter (Q2) and the first half (1H) of the financial year (FY) 2020, which ended on September 30, 2019.

As per the company report, the revenue from operations amounted to ₹24.28 billion (~$338.35 million), and the company posted a net profit of ₹ 1.25 billion (~$17.47 million) for 1H of FY 2020.

Sterling & Wilson

Speaking about the results, Bikesh Ogra, director and global CEO, Sterling and Wilson Solar Limited, said, “We are pleased to announce our first quarterly, and half-yearly results post the listing in August this year. We witnessed a strong increase in gross margin percentage due to efficient execution and procurement, both in India as well as the international markets, in spite of a reduction in revenue as compared to the corresponding half year in FY 19. We continue to strengthen our business portfolio in existing markets, along with exploring newer geographies that are looked upon strategically. Currently, the company has an order book of about ₹124.8 billion ($1.74 billion) as compared to ₹45 billion (~$627.1 million) last year.”

However, the company is going through a crisis which started last week when the company disclosed that the promoters of the company Shapoorji Pallonji Group and Khurshed Yazdi Daruvala requested a revised repayment schedule for the loans worth ₹23.41 billion (~$325.5 million) citing “significant and rapid deterioration in credit markets.” The outstanding amount stood at ₹25.63 billion (~$356.3 million) with the principal amount of ₹23.35 billion (~$324.6 million) and the interest amount of ₹2.28 billion (~$31.7 million) as of August 20, 2019, the day the company went public.  The loan was to be repaid within 90 days from the day of the listing, but only ₹2.5 billion (~$34.7 million) of the outstanding amount has been paid, and the remaining ₹23.41 billion (~$325.5 million) is still unpaid.



The company has clarified that the amounts mentioned in the letter dated November 14, 2019 are for two different dates and the amount of ₹23.41 billion (~$325.5 million) is only after taking into account the repayment of ₹2.5 billion (~$34.7 million) from the date of listing to the end of first half of FY 2020. The company further added that there had been a complete misrepresentation of facts in the media and the promoters have not sought any reduction in the repayment of the loan.

The company’s stock price has declined over 55% since it’s initial public offering.

The engineering, procurement, and construction company has been expanding its global footprint and making inroads in strategic markets like Australia and the U.S. Currently; the company says it has over 8.8 GW of solar EPC projects as part of its portfolio in different stages of implementation.

The company’s global portfolio also includes the 1.17 GW project in Abu Dhabi, which is one of the largest single-location solar PV projects in the world.

During the first half of the financial year 2020, the company won orders amounting to ₹8.28 billion (~$115.4 million) and orders totaling to ₹62.82 billion (~$875.73 million) in October and November 2019 alone. It is important to note here that these orders cover the diverse markets of Saudi Arabia, Australia, Chile, U.S., and Oman among others, for executing a total of 2.88 GW capacity.

The company also bagged the 1.09 GW project in Saudi Arabia, which strengthened its position in the Middle East and North Africa (MENA) region. The company added that it was also the largest solar EPC solutions provider in Africa and the Middle East, with a market share of 36.6% and 40.4%, respectively.

Earlier this year in August, the company had floated its initial public offering targeting to raise ₹31.25 billion (~$442 million). The price band for the IPO was slated at ₹775 ($11.10) (floor price) to ₹780 ($11.17) (cap price), and the face value of each share was ₹1 (~$0.014).

Last year, Sterling and Wilson had won the bid to develop 9.9 MW of grid-connected solar projects for CIAL Infrastructures Ltd.  CIAL Infrastructures is a fully-owned subsidiary of Cochin International Airport Ltd. The capacity consisted of both ground-mount and rooftop solar projects.

In the bidding process, the company had emerged as the lowest bidder by quoting ₹349 million (~$5.5 million) to develop 7.5 MW of grid-connected solar projects and ₹158 million (~$2.5 million) to develop 2.4 MW of grid-connected rooftop solar on the roof of the carport.

Image credit: Sterling and Wilson