Sterling and Wilson Renewable Energy, one of India’s leading players in the renewable energy sector, saw its stock price surge as the shares jumped 7% in early trading on December 23, 2024. This surge came after the company announced securing a substantial domestic order worth Rs 1,200 crore, further bolstering its market position. The order will significantly help the company achieve its strategic target of an aggressive revenue goal of Rs 8,000 crore for FY25.
Investors and analysts are particularly fascinated by the order win: the Design, Engineering, Procurement, and Construction (EPC) of the Balance of System (BOS) for a massive 500 MW Solar PV project in Gujarat. This blog takes a closer look at Sterling and Wilson Renewable Energy’s recent order win, the impact this has on the company’s future, and why the stock price has soared. We’ll also look into the larger context of India’s renewable energy sector and what the company is playing in this growth story.
Sterling and Wilson’s Surge in Stock Price
On December 23, 2024, shares of Sterling and Wilson Renewable Energy surged by around 7% as investors showed positive sentiment after the company announced its latest order win. The stock traded at Rs 465.25 on the NSE at 9:55 AM with a sharp price increase. The stock price also saw a surge in trading volumes, as 14 lakh shares were traded on the day, much more than the average daily traded volume of 13 lakh shares in the last month. Such strong price movement and trading activity indicate that the market is quite upbeat about the news and investors closely watch the company’s performance.
The Rs 1,200 Crore Order: A Game-Changer
Sterling and Wilson Renewable Energy has bagged an order worth Rs 1,200 crore to undertake the EPC for a 500 MW (AC) Solar PV project in Gujarat. The deal marks an important milestone for the company in its quest to further strengthen its leadership position in the Indian solar energy market, which is rapidly growing.
The order will encompass Sterling and Wilson Renewable Energy’s full responsibility for the Balance of System (BOS), which includes designing, engineering, procurement, and constructing the solar power project. The company will also undertake operations and maintenance (O&M) for three years. It is an important milestone for the company, as this marks a big step in securing long-term, high-value contracts that will contribute to sustainable revenue streams going forward.
Amit Jain, Global CEO of Sterling and Wilson Renewable Energy Group, said, “It is a matter of pride to receive this prestigious order. It is an important order for India’s renewable energy transition.” Jain also emphasized the role that India, one of the world’s largest energy markets, will play in mitigating climate challenges while bolstering energy security, creating jobs, and contributing to economic growth.
Role of Gujarat in India’s Renewable Energy Push
Gujarat has been a critical player in India’s renewable energy aspirations for quite some time. The geographical location of the state along with its commitment to clean energy makes it an ideal location for large-scale solar energy projects. Sterling and Wilson Renewable Energy’s winning of the 500 MW Solar PV project will contribute to the achievement of Gujarat’s renewable energy goals as well as to India’s clean energy endeavours.
The Indian government has set aggressive renewable energy targets, which include a non-fossil fuel capacity of 500 GW by 2030. Of course, solar power will be the biggest contributor to this effort. Sterling and Wilson Renewable Energy is one of the leaders in the solar energy business in India and has excellent opportunities in the market as these are growing rapidly, and the new order win consolidates its leadership in the industry.
Expansion of Sterling and Wilson’s Order Book
While that in itself was a huge order valued at Rs 1,200 crores, Sterling and Wilson Renewable Energy had already picked up an earlier large order worth Rs 504 crore for its solar project in Rajasthan. It is contributing to the increase of order books that stood at its highest level ever at Rs 10,549 crores on October 15, 2024. The increase in order books of the company has shown a strong positioning in terms of competition for itself with expanding markets and growing share in India’s renewable energy segment.
The robust order book is a great indicator of the company’s future revenue generation potential and reflects the ability to secure large projects with leading organizations. These projects would provide great revenue visibility for the company and would grow the company in the coming quarters. The diverse portfolio of projects – from solar PV installations to EPC contracts – has positioned Sterling and Wilson Renewable Energy for sustained success.
Sterling and Wilson’s Path to Achieving Revenue Target of Rs 8,000 Crore
Sterling and Wilson Renewable Energy have also set a rich revenue target of Rs 8,000 crore for FY25. This order win of Rs 1,200 crore to be secured in Gujarat besides an order of Rs 504 crore secured in Rajasthan is going to help achieve this revenue and position it well to reap benefits to meet the new revenue target and further strengthen the financials.
In addition to the projects it already has, the company is aggressively pursuing new opportunities in India and abroad. With the global push for renewable energy accelerating, especially in emerging markets, Sterling and Wilson Renewable Energy are well-positioned to capture a larger share of the global renewable energy market.
The Growing Renewable Energy Sector in India
India’s renewable energy industry is witnessing rapid growth. The government has set ambitious clean energy targets for the country and an increasing demand for sustainable energy solutions, which drives the growth in the country. India is targeting to achieve 500 GW of non-fossil fuel-based power capacity by 2030, where solar energy would be a central pillar. With its role as the world’s third-largest emitter of carbon dioxide, India has been significantly adopting renewable energy technologies. The demand for solar power is continuously increasing.
There are several initiatives undertaken by the Indian government towards the promotion of renewable energy adoption, such as the National Solar Mission that aims to put in place 100 GW of solar capacity by 2022 and the National Wind-Solar Hybrid Policy. State governments, including Gujarat, have also adopted favourable policies and incentives to attract investment in the renewable energy sector. These factors have created a conducive environment for companies like Sterling and Wilson Renewable Energy to expand their operations and secure large-scale contracts.
EPC Contracts in the Renewable Energy Sector
The EPC model is an integral part of large-scale renewable energy projects. In the case of the 500 MW Solar PV project in Gujarat, Sterling and Wilson Renewable Energy will be responsible for the entire EPC process, including the design, engineering, procurement, and construction of the project. This end-to-end responsibility ensures that the company can control the quality, timeline, and cost of the project, making it an attractive option for clients looking for a reliable partner in the renewable energy space.
Besides its current advantages, the EPC model also offers long-term earnings because many of the O&M contracts signed are for several years during or following the project. So, the three-year contract of O&M for Gujarat’s solar project will generate uninterrupted and persistent revenues for the company besides building further on its current financial strength.
Sterling and Wilson in India’s Clean Energy Transition
Sterling and Wilson Renewable Energy’s commitment to India’s clean energy transition is evident in its growing portfolio of solar power projects and strategic investments in R&D. Being one of the top EPC contractors in India, the company is an essential part of helping the country reach its renewable energy goals and decrease dependence on fossil fuels.
Given that the central role of solar power is expected to play in India’s renewable energy strategy, this makes the company a leading player in India’s transition to a cleaner, more sustainable energy future. Sterling and Wilson Renewable Energy are helping shape the future of India’s energy landscape by securing large-scale projects and increasing its order book.
Conclusion:
Sterling and Wilson Renewable Energy’s order win worth Rs 1,200 crore for a Gujarat solar project comes within the context of its all-time-high order book of Rs 10,549 crore and reflects its strong positioning in an increasingly booming renewable energy space. Thus, Sterling and Wilson Renewable Energy would be the significant beneficiary as India picks the pace on clean energy production.
The company’s diversification into large-scale EPC contracts and its focus on providing end-to-end solutions for renewable energy projects make it an attractive option for investors and stakeholders. With an ambitious revenue target of Rs 8,000 crore for FY25 and a solid order book, Sterling and Wilson Renewable Energy is poised for continued growth and success in the years ahead.
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