Sterling and Wilson Renewable Energy Ltd is a global leader in end-to-end solar engineering, procurement, and construction (EPC) solutions, as well as the management and maintenance of solar power installations.
Sterling and Wilson Renewable Energy Ltd shares rose 17.4 percent to Rs 339.70 a share on Monday after analysts recommended ‘buy’ rating, while the company’s shares closed at Rs 333.50, up 15.66 percent from the previous close.
The stock has delivered a 23.62 percent return over the past six months and a 13.92 percent return over the past one year.
As to the company’s financials, the company’s operational revenue fell by 61 percent year on year to 2015 crore in FY 22-23. Over the same period, net losses climbed by 28 percent to Rs 1,174 crore.
Based on a positive outlook for the company, Nuvama Wealth and Investment Limited (NWIL) maintained a buy rating with a target price of Rs 454 signifying a 36 percent increase over the current price level.
The rationale behind providing such a recommendation is
● Brokerage is positive on the firm after it turned around in Q1FY24, securing two domestic contracts worth Rs 500 crore in Q1 and expects orders worth $1 billion from Nigeria. According to the research firm, the corporation is on track for a V-shaped rebound in FY24.
● Despite having a negative EBITDA in FY23, Nuvama anticipates that significant operational leverage and lowering fixed costs would lead the company’s EBITDA turnaround by Q3FY24 and business anticipates that reimbursement receivables approximately Rs 400 crore would be realised in FY24, primarily for repaying debt.
● The company’s domestic order book is expected to be worth Rs 5,000 crore by the end of the second quarter of fiscal year 2024.
● The company has managed operational EBITDA breakeven point in the June quarter, with net debt of Rs 2,100 crore as of June 30, 2023.
● The firm is in the process of reducing fixed expenses from roughly Rs 400 crore per year to Rs 250 crore per year, according to Nuvama, and also the company’s current bid pipeline stands at 22 GW, with a domestic project mix of 58%.
Written by Omkar Chitnis
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