Sterling & Wils. Q1 FY27 Results (NSE: SWSOLAR)
Signal: Revenue declined
The read
PAT surged 69.6% YoY to ₹54.22 Cr but this was entirely driven by other income (35.6% of PBT) — core operating profit (EBIT) fell 7.9% YoY; revenue declined 9.7% YoY, the first revenue drop after 5 quarters of growth, and EBITDA margin was flat at 6.2% with no operating leverage. The standalone business (+9.1% revenue) was offset by subsidiary weakness; cross-checks are clean. Key concern: earnings quality — profit depends on non-operating income.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,590.13 Cr | -9.7% | -78.9% |
| EBIT | ₹95.57 Cr | -7.9% | |
| Net profit | ₹54.22 Cr | 69.6% | |
| EPS | ₹2.32 | 69.3% | |
| EBIT margin | 6.2% |
P&L walk
Revenue fell 9.7% YoY to ₹1,590.13 Cr; EBITDA margin flat at 6.2% with employee costs (2.5% of rev) and finance costs (2.4%) growing slower than the revenue decline; PAT surged 69.6% to ₹54.22 Cr entirely because other income of ₹20.18 Cr (35.6% of PBT) propped up the bottom line — operating profit fell 7.9% YoY.
Segments
The EPC segment (₹1,417.90 Cr revenue, 89.1% of standalone total) drove the standalone revenue growth (+7.9% YoY), while O&M service (₹67.83 Cr) grew 39.1% YoY; consolidated revenue fell 9.7% due to subsidiary-level decline.
Key positives
- PAT grew 69.6% YoY to ₹54.22 Cr, driven by other income of ₹20.18 Cr (35.6% of PBT).
- EPS grew 69.3% YoY to ₹2.32, tracking PAT growth with no dilution.
- Standalone EPC segment revenue grew 7.9% YoY to ₹1,417.90 Cr and segment result was stable at ₹139.89 Cr.
- No exceptional item in consolidated P&L this quarter (versus large exceptional charges in prior periods).
Key concerns
- Revenue declined 9.7% YoY to ₹1,590.13 Cr, breaking a 5-quarter growth streak (prior Q1FY27 had +92.6% YoY).
- EBITDA margin was flat at 6.2% YoY — no operating leverage because revenue fell and fixed costs did not decline proportionately.
- Core operating profit (EBIT) fell 7.9% YoY; the entire PAT growth came from non-operating other income (35.6% of PBT).
- Finance costs rose 11.2% YoY to ₹38.88 Cr despite lower revenue, indicating higher debt burden.
- Standalone PAT fell 13.6% YoY despite revenue growth of 9.1%, due to lower other income and higher finance costs.
Earnings quality: includes non-operating other income
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