Sterling & Wilson shares soar as management anticipates finalization of orders from RIL and Nigeria

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Sterling & Wilson shares soar as management anticipates finalization of orders from RIL and Nigeria

Team FS

22/Apr/2024

Key Points:

Market Momentum: Sterling & Wilson's shares rise by nearly 5% following news of impending orders from Reliance Industries and Nigeria, contributing to the company's robust earnings outlook.
Financial Highlights: The company reports a doubling of revenue in the March quarter, reaching ₹1,178 crore, with positive EBITDA of ₹29.4 crore. Additionally, notable reduction in net debt further bolsters investor confidence.
Strategic Partnerships: Reliance New Energy Ltd.'s significant stake in Sterling & Wilson underscores the strategic alignment between the two entities, paving the way for future growth and collaboration in the renewable energy sector.

Sterling & Wilson Renewables Ltd. experiences a surge in its stock price, climbing nearly 5% on Monday, buoyed by anticipation surrounding imminent orders from Reliance Industries and Nigeria. This development propels the company's already robust earnings outlook, signaling positive momentum in the renewable energy sector.

Financial Highlights Reflecting Growth Trajectory
In its March quarter earnings announcement, Sterling & Wilson management reveals encouraging financial metrics, including a notable doubling of revenue to ₹1,178 crore compared to the previous year. Furthermore, the company reports a positive EBITDA of ₹29.4 crore, marking a significant turnaround from the EBITDA loss of ₹16.1 crore in the corresponding quarter of the previous year.

A noteworthy aspect of the financial performance is the reduction in net debt, with the total figure slashed to ₹116 crore, a substantial decline from ₹1,966 crore recorded at the end of the financial year 2023. This reduction in debt not only strengthens the company's balance sheet but also enhances investor confidence in Sterling & Wilson's financial resilience and stability.

Strategic Partnerships and Growth Trajectory
The impending finalization of orders from Reliance Industries and Nigeria underscores the strategic significance of Sterling & Wilson's partnerships and collaborations. Reliance New Energy Ltd.'s substantial stake of 32.54% in Sterling & Wilson reaffirms the strategic alignment between the two entities, positioning Sterling & Wilson as a key player in the renewable energy landscape.

The anticipated orders from Reliance Industries and Nigeria are expected to contribute significantly to Sterling & Wilson's order book, which has already surpassed ₹8,000 crore, excluding these prospective contracts. This influx of orders not only bolsters the company's revenue visibility but also reflects the trust and confidence reposed by leading global entities in Sterling & Wilson's capabilities and expertise in the renewable energy domain.

In conclusion, Sterling & Wilson's promising market performance, robust financial metrics, and strategic partnerships underscore its position as a frontrunner in the renewable energy sector. With a strong order book, positive earnings trajectory, and strategic alliances, Sterling & Wilson is well-positioned to capitalize on emerging opportunities and drive sustainable growth in the dynamic renewable energy landscape.

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Sterling & Wilson shares soar as management anticipates finalization of orders from RIL and Nigeria

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