New Delhi: Sterling and Wilson Renewable Energy Ltd (SWREL) reported a higher net profit for the first quarter of FY27, but a closer look at the numbers shows the improvement was driven almost entirely by a sharply lower tax charge, even as the company's revenue and profit before tax (PBT) fell on a year-on-year basis.
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On a consolidated basis, SWREL posted a net profit of Rs 53.27 crore for the quarter ended June 30, up about 38 percent from Rs 38.69 crore in the year-ago quarter. Profit attributable to owners of the company rose more steeply, by around 70 percent, to Rs 54.22 crore from Rs 31.97 crore, though that figure was flattered by a swing in minority interest, which moved from a positive Rs 6.72 crore to a negative Rs 0.95 crore.
The bottom-line growth, however, did not come from the business. Consolidated revenue from operations declined about 10 percent year-on-year to Rs 1,590.13 crore, from Rs 1,761.63 crore. Profit before tax fell around 24 percent to Rs 56.65 crore, from Rs 74.67 crore. The reason the net profit still rose is tax: the total tax charge collapsed to roughly Rs 3.4 crore from about Rs 36 crore a year earlier, as current tax dropped to Rs 7.05 crore from Rs 37.51 crore.
The standalone numbers tell a plainer story of margin pressure. Revenue from operations rose about 9 percent year-on-year to Rs 1,487.11 crore, but net profit fell around 14 percent to Rs 67.80 crore, from Rs 78.43 crore. Pre-tax profit dropped about 32 percent to Rs 70.82 crore, from Rs 103.80 crore. The squeeze came from a collapse in other income (Rs 14.73 crore against Rs 62.66 crore a year ago), a sharp rise in direct project costs (Rs 356.48 crore against Rs 249.10 crore), and higher finance costs. Standalone EPS slipped to Rs 2.90 from Rs 3.36.
Quarter-on-quarter, the numbers weakened across the board, partly reflecting the seasonal strength of the March quarter for EPC players. Consolidated revenue fell about 18 percent from Rs 1,945.61 crore in Q4 FY26, and consolidated pre-tax profit dropped roughly 63 percent from Rs 154.11 crore. Consolidated net profit was down about 62 percent from Rs 141.59 crore, and EPS fell to Rs 2.32 from Rs 5.76. On a standalone basis, revenue fell about 14 percent sequentially and pre-tax profit (before exceptional items) was down around 17 percent.
The operational split shows where the strain lies. The Operation and Maintenance (O&M) segment was the clear growth engine: consolidated O&M revenue jumped about 41 percent year-on-year to Rs 84.80 crore, and O&M segment profit rose around 22 percent. The core EPC business, by contrast, contracted — consolidated EPC segment revenue fell about 12 percent year-on-year to Rs 1,503.91 crore, and EPC segment profit declined roughly 25 percent to Rs 137.69 crore. EPC segment margin compressed to about 9.2 percent from 10.8 percent a year earlier. On a standalone basis, EPC revenue grew a modest 8 percent while O&M revenue rose about 39 percent.
Finance costs climbed about 34 percent year-on-year on both measures — to Rs 38.92 crore (consolidated) and Rs 38.88 crore (standalone), against roughly Rs 29 crore in the year-ago quarter — a headwind worth watching against the backdrop of the quarter's softer operating profit.
The June quarter of FY27 carried no exceptional items, in contrast to FY26 (year ended March 31, 2026), which was dragged deep into the red by them. On a standalone basis, the company reported a full-year net loss of Rs 2,510.18 crore, after an exceptional charge of Rs 2,802.18 crore tied to an impairment provision on its investment in a wholly-owned subsidiary. On a consolidated basis, FY26 showed a net loss of Rs 295.79 crore (loss attributable to owners of Rs 309.43 crore), after an exceptional charge of Rs 610.94 crore stemming from an unfavourable arbitral tribunal order against a subsidiary. Consolidated full-year revenue for FY26 stood at Rs 7,548.05 crore and standalone at Rs 6,163.81 crore. The filing does not carry full-year comparatives for the previous fiscal, so a like-for-like full-year year-on-year comparison cannot be drawn from this disclosure alone.
The statutory auditor drew attention to several emphasis-of-matter items that carry material risk. These include roughly Rs 512.84 crore (USD 54.23 million) and Rs 108.19 crore (AUD 16.59 million) of bank guarantees invoked by overseas customers that the group has recognised as recoverable, with no provision made; a standalone net exposure of Rs 706.61 crore to a wholly-owned subsidiary that management believes is recoverable; and a customer counter-claim of Rs 1,363.10 crore (USD 144.09 million) in an EPC dispute for which no provision has been made. The recoverability of a portion of these claims rests on a 2021 indemnity agreement under which the promoter selling shareholders would reimburse the company for crystallised claims above Rs 300 crore. Under that agreement, the company said it has raised and received a claim of Rs 174.54 crore for the October 2024 to September 2025 period.
Alongside the results, the company pointed to a strong forward book: an unexecuted order value of about Rs 13,000 crore, a domestic EPC order book of around Rs 7,900 crore, and a bid pipeline of over 27.7 GW. It also flagged a new 50:50 joint venture order valued at roughly USD 560 million for the 1,000 MW-AC West Minya solar-plus-storage project in Egypt.
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Commenting on the results announcement, Chandra Kishore Thakur, Global CEO, Sterling and Wilson Renewable Energy Group, said, “We remain confident about our prospects because the company’s UOV is robust. We expect this growth to reflect on the topline and bottom-line in the months ahead. The growing order book is a testimony to the confidence our customers repose in us. As a company, we are certain that our experienced and competent workforce will be able to deliver projects on schedule adhering to committed timelines.”