Sterling and Wilson Renewable Energy Q4 FY26: execution scale rises, but litigation still shapes the narrative

Sterling and Wilson Renewable Energy Limited ended FY26 with its highest annual turnover since listing, even as reported profitability for the year remained distorted by litigation-linked exceptional items. The company, positioned as a global solar EPC and O&M solutions provider with an expanding presence in storage and wind, used the Q4 FY26 investor presentation and earnings call to highlight two themes: a sharp step-up in execution and order inflows, and a continued clean-up of legacy legal matters.

On the headline numbers, consolidated revenue from operations for FY26 was INR 7,548 crore, up 20 percent over FY25. FY26 EBITDA was INR 481 crore, and the EBITDA margin improved to 6.4 percent from 4.4 percent in FY25. Gross margin was 10.5 percent for FY26. However, reported FY26 PAT was a loss of INR 296 crore, which management attributed primarily to exceptional items of INR 611 crore related to litigation matters that had been discussed in Q2 and Q3.

Q4 FY26 by itself showed a different picture: revenue of INR 1,946 crore declined sequentially, but profitability improved as gross profit rose to INR 234 crore and management highlighted strong international project outcomes. Q4 FY26 reported PAT came in at INR 142 crore, which the company described as its highest quarterly PAT since listing.

Order visibility strengthens as execution remains the key lever

Operationally, management emphasized the scale achieved in FY26. The company said it commissioned around 4.5 GW AC in FY26, which it equated to about 5.9 GW DC. It also provided context on the market, stating that India’s utility-scale solar installations during FY26, excluding rooftop, were about 28.3 GW AC, and that around 15 percent of the solar projects commissioned in the country during the year were executed by Sterling and Wilson.

The second pillar of the narrative was order inflow. FY26 order inflows were reported at INR 10,062 crore, up 43 percent YoY. Unexecuted order value (UOV) rose to INR 11,813 crore versus INR 9,096 crore in March 2025, with a stated mix of 78 percent India and 22 percent international. Management also noted it had been declared L1 by Coal India for a 1.2 GW DC turnkey project, while clarifying that final LOA and notice-to-proceed remain necessary to start execution.

The company’s bid pipeline for FY27 was stated at 31 GW, with 88 percent in India. Management also pointed to a larger skew toward turnkey projects in FY26 order wins, saying turnkey constituted about 70 percent of total orders for the year.

Management explained the Q4 revenue decline as a function of execution rescheduling rather than demand weakness, citing commodity price volatility that affected supplies and material availability. The company said it deferred some supplies and revised execution plans accordingly.

Segment performance: domestic EPC dominates, while O&M and international margins improve

The Q4 FY26 segment revenue split disclosed in the presentation underlines the company’s domestic skew. Domestic EPC revenue was INR 1,641 crore in Q4 FY26, international EPC revenue was INR 224 crore, and O&M revenue was INR 81 crore.

Profitability in Q4 was supported by international execution outcomes. Management said Q4 international EPC gross margins were strong due to three projects achieving commissioning ahead of budgeted costs. The CFO also pointed out that Q4 reported EBITDA was positively impacted by a forex gain of about INR 35 crore.

For medium-term margin expectations, management reiterated a familiar framework: EPC gross margins are expected to stabilize around 8 to 10 percent depending on whether the work is turnkey or BoS, while O&M is expected to stabilize around 20 percent gross margin.

The O&M business was framed as approaching an inflection point, with the portfolio increasing to 13.5 GW in FY26 from 8.7 GW in FY25. Management also mentioned a 900 MW O&M order from Serentica, and indicated that third-party O&M contracts are typically multi-year, usually 2 to 3 years, with some longer-duration contracts.

Storage and wind: expanding the addressable market, but still early

The investor deck outlines a fully integrated BESS solution spanning battery module supply and BMS, containers and racks, PCS and MV stations, EMS and hybrid controller, installation and commissioning, and long-term O&M. On the call, management positioned battery storage as a growing opportunity in India, while being candid about the operating model.

Rather than locking into a single battery supplier, management said it continues to engage manufacturers on a project-by-project basis and locks pricing ahead of bids to manage volatility. It also stated that battery-related orders could comprise around 20 percent of new order inflows, with margins expected to broadly mirror solar EPC margins depending on scope. Specifically, management indicated that if only BoS is in scope, margins could be higher, while including battery supply could pull it closer to the lower end of the 8 to 10 percent range.

On wind, management said one project is under execution and on track, and that it expects better traction from wind projects in the current year. Importantly, management bundled solar, wind, and battery in the same growth framework.

Balance sheet and cash: debt reduces, working capital remains negative

The company reported a reduction in net debt from INR 738 crore in December 2025 to INR 589 crore in March 2026, citing stronger cash flow generation and scheduled repayments. Net working capital remained negative, but improved to negative INR 329 crore in March 2026 from negative INR 602 crore in March 2025.

The CFO also said the company secured about INR 2,800 crore of fresh credit lines during the year, and indicated that LC and bank guarantee costs reduced significantly.

Litigation and exceptional items: the key overhang investors will track

While Q4 profitability was strong, management repeatedly returned to litigation as the main reason the FY26 headline PAT was negative. It stated that exceptional items of INR 611 crore, primarily related to litigation, drove FY26 reported PAT to a loss.

On ongoing US cases, management said a few matters remain in court and could take around two years. It also stated the company is already cash out by more than INR 200 crore on those cases, and that this amount is predominantly backed by promoter indemnity. However, management also clarified that if outcomes go adverse, there can be additional costs such as litigation costs and potential penalties, and that quantification is difficult while cases remain unresolved.

What management guided for FY27

The most explicit forward indicator offered was management’s stated expectation of about 15 percent revenue growth in FY27 versus FY26. It also said the 31 GW bid pipeline is heavily India-skewed and that batteries and wind will be part of the growth mix.

On Reliance, management said it remains deeply engaged on technical and execution discussions and expects traction in the current financial year, but did not provide a timeline, size, or margin commentary. It also clarified to participants that Reliance-related orders are excluded from its stated growth guidance.

Takeaways

Sterling and Wilson ended FY26 with strong operational momentum: record turnover since listing, robust order inflows, and a higher unexecuted order value that improves near-term visibility. Q4 FY26 profitability also benefited from improved international execution outcomes.

At the same time, the investment debate remains shaped by litigation. Management acknowledged the uncertainty on remaining US cases and linked FY26’s reported loss directly to litigation-related exceptional items. Over FY27, the core investor questions are likely to center on execution conversion from UOV, the pace of storage-led order inflows, and how quickly the legal overhang fades from the reported numbers.