The engineering, procurement, and construction (EPC) arm of Shapoorji Pallonji Group, Sterling and Wilson Renewable Energy, reported a net profit of ₹10 million (~$120,000) in the fourth quarter (Q4) of the financial year (FY) 2024.

The company turned positive after nearly 12 quarters, boosted by strong performance in domestic EPC operations. It had reported a net loss of ₹4.21 billion ($54.9 million) in Q4 of FY 2023.

CEO Amit Jain commented on falling solar module prices during a post-earnings conference call. “As module prices have come down significantly, this has led to solar projects getting expedited and more project closures. Projects have become more viable with lower costs.”

The company’s revenue from operations surged more than 12-fold to ₹11.78 billion (~$154 million) in the quarter, from ₹880 million (~$11.5 million) last year. The growth was driven by a sharp increase in the domestic EPC business, contributing ₹10.82 billion (~$141 million), up 130% compared to ₹4.7 billion (~$61.2 million) in the previous year.

Gross margin also improved to ₹1.24 billion (~$16.2 million) or 10.5% in Q4 from a negative gross margin of ₹2.74 billion (~$32.8 million) in the same period last year, helped by the domestic EPC segment’s contribution.

The company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also turned positive for the first time after three consecutive years of losses, at ₹590 million (~$7.7 million) in the quarter, compared to a negative EBITDA of ₹3.54 billion last year. The EBITDA margin stood at 5%.

Its international EPC segment, however, contributed revenue of ₹420 million (~$5.5 million) in Q4, down 15% from ₹560 million (~$7.3 million) in the same quarter last year.

The company received new orders/letters of intent) worth about ₹4.88 billion (~$63.6 million) during the quarter, including being declared the lowest bidder for a second floating solar module project in the country.

It also received its second international order in the quarter from Enfinity for a balance of system (BOS) project in Italy worth €20 million (~$21.3 million).

“The company delivered a robust financial performance which includes positive gross margins throughout the year and positive EBITDA for the year. Q4 results were also profitable. The market opportunity for renewable EPC players like ours is continuing to grow significantly both in India and internationally, and we are well aligned to capture the growth,” said Jain.

FY 2023-24

For the full financial year (FY) 2023-24, the company’s net loss narrowed to ₹2.11 billion (~$27.5 million) from ₹11.75 billion (~$153 million) in FY 23, driven by a significant improvement in gross margin. Its gross margin for FY 2024 turned positive at 10.3% from negative 30.9% last year.

Revenue from operations grew by 51% to ₹30.35 billion (~$395.6 million) in 2024, compared to ₹21.07 billion (~$274.6 million) last year. The domestic EPC business contributed ₹24.25 billion (~$316.2 million) to the revenue, a 370% jump from ₹5.16 billion ($67.2 million) in the previous year.

The company reported a positive EBITDA of ₹540 million (~$7 million) in the year, compared to a negative EBITDA of ₹10.65 billion (~$139 million) last year. The EBITDA margin stood at 1.8%.

Contribution from the international EPC segment fell to ₹4 billion (~$52.1 million), down 71% compared to ₹14 billion (~$182.5 million).

It received orders worth ₹60.23 billion (~$784.8 million) in FY 2024, up 37% compared to new order inflows of ₹43.87 billion (~$571.7 million) last year. It includes two international BOS orders worth about €132 million (~$145.2 million) from Spain and Italy after a gap of nearly three years.

The company’s unexecuted order value stood at ₹80.84 billion (~$1 billion) as of March 31, 2024, compared to ₹49.13 billion (~$640.4 million) as of March 31, 2023, rising nearly 65%.

In its investor presentation, the company said it has significantly deleveraged its balance sheet in the year, with total net debt reducing by over 90% to approximately ₹1.16 billion (~$15.1 million).

Sterling and Wilson’s EPC portfolio is 18 GW, while its operation and management portfolio is 7.6 GW. The company said it is pursuing projects totaling 45 GW in India and 5 GW overseas.

Strength in domestic EPC operations helped lower Sterling and Wilson’s net loss in the previous quarter.

Last December, the company raised ₹15 billion (~$180.03 million) through Qualified Institutions Placement.