Shares of Sterling and Wilson Renewable Energy Limited are currently trading at Rs 286 showing a downfall of approximately 7 percent as compared to the previous closing price of Rs 307. In the last one month, the stock has experienced a fall of around 11 percent ranging from Rs 319 to the current levels.
One of the probable reasons for the stock to show such movements is the Q4 and annual results announced by the company yesterday. The numbers are been discussed later in the piece.
Sterling and Wilson RE Limited is engaged in Rooftop and Turnkey solutions for Engineering, Procurement, Construction (EPC), maintenance and operation of Solar Power projects. It primarily derives revenue from the Solar EPC business. The firm has operations in India, America, the Middle East, Australia, Africa, and many other regions.
Having a quick glance at the financials of the company, the revenues generated from operations, on a quarterly basis, have reduced from Rs 407 crores in Q3 to Rs 88 crores in Q4. Moreover, the PAT figures, during the same period, have worsened from net losses of Rs 100 crores to losses of Rs 420 crores.
Coming onto the annual performance of the company’s operations, the numbers have not been able to show growth and, rather, are falling. The revenues moved down from Rs 5,200 crores during FY21-22 to Rs 2,015 crores in FY22-23. Net profits, showing a similar pattern during the same period, enhanced their losses from Rs 916 crores in FY21-22 to Rs 1,175 crores.
The profitability metrics, getting affected by the downfall reported by the company, have been in the red with negative percentages to represent. The Return on Equity (ROE) moved from negative returns of 33.28 percent in FY20-21 to 116 percent in FY21-22. Similarly, the Return on Capital Employed (ROCE) showed movements from negative returns of 9.64 percent in FY20-21 to 59.41 percent in FY21-22.
Something that has improved in the recent financial years is the reduced debt-to-equity ratio of the company with the most recent movement from 0.71 in FY20-21 to 0.48 in FY21-22.
As per the data available for the quarter ending December 2022, promoters hold a 72.73 percent stake in the company. FIIs, on the other hand, increased their stake from 2.65 percent in Q2 to 3.53 percent during Q3. The percentage of shares that are pledged by the company stands at a huge 38.93 percent as of the December quarter.
Written by Amit Madnani
