ICRA, a well-known rating agency, recently mentioned that the installed Renewable Energy (RE) capacity in India, excluding large hydro plants, is estimated to increase to ‘170 Gigawatt (GW)’ by March’25 from the levels of 135 GW recently reported in December’23.
Listed below is one stock associated with the ‘Renewable Energy’ (RE) sector that one could add to their watchlist for a potential upside of more than 20 percent:
Sterling and Wilson Renewable Energy Limited
With a market capitalization of Rs 16,102.62 crores, the stocks of Sterling and Wilson Renewable Energy Limited started their trading session on Friday at Rs 667.75 and currently trade at Rs 686.20, gaining approximately 3.60 percent compared to the previous close of Rs 662.60 apiece.
Nuvama, formerly Edelweiss Wealth Management, recently raised its target price for the Ambani Group stock and gave a stock price target of Rs 850, exhibiting a potential upside of approximately 23 percent.
The investment rationale for providing such a recommendation pertains to RE company’s V-shaped earnings recovery from FY25 onwards thereby accelerating on a strong global outlook. Furthermore, the Brokerage’s report mentioned hiking the long-term gross margins by approximately 50bps to 10.5 percent on anticipated domestic orders.
Having a glance at the latest financials, the company’s prime business indicators, viz, its operating revenues as well as after-tax profits, reported a jump in numbers.
The former rose from Rs 582.88 crores during Q3FY24 to Rs 1,178.01 crores during Q4FY24, and the latter, keeping the timeframe the same, transitioned from losses of Rs 62.39 crores to profits of Rs 1.40 crores.
In addition to the above, the company’s ratio analysis portrays decent gross profit margins of around 2.07 percent. The company has also been able to keep the debt-to-equity ratio at decent levels with the most latest number of FY24 reported at 0.49 times. Moreover, the company reported return on capital employed (RoCE) numbers at 3.68 percent.
According to the latest presentations, the company’s unexecuted order value stands at more than Rs 8,000 crores as of March’24 compared to the order book of Rs 4,900 crores as of March’23.
According to the latest shareholding pattern data available, Reliance New Energy Limited (RNEL), a wholly-owned subsidiary of Reliance Industries, holds around 7.59 crore equity shares of the company equivalent to a 32.54 percent stake.
Sterling and Wilson Renewable Energy Limited is an India-based company engaged in the business of Turnkey and Rooftop solutions for engineering, procurement, construction (EPC), operation, and maintenance of solar power projects. Deriving a maximum revenue from the ‘EPC’ business, the company operates in various regions overseas including the Middle East, Latin America, Australia, Africa, and many others.
Written by Amit Madnani
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