Sterling & Wils. Q2 FY27 Results (NSE: SWSOLAR)
Signal: Loss reversed
The read
The operating recovery is improving but not yet linear: revenue rose 14.1% YoY to ₹1,456.33 crore and gross margin expanded 196bps to 8.7%, yet revenue fell 2.1% QoQ, finance costs rose 50.9% YoY to ₹49.76 crore and PAT fell 58.9% QoQ to ₹27.88 crore; the prior-year PAT comparison is distorted by the ₹2,638.42 crore exceptional charge.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,456.33 Cr | +14.1% | -2.1% |
| Net profit | ₹27.88 Cr | N/M | |
| EPS | ₹1.19 | N/M | |
| EBIT margin | N/A |
P&L walk
Revenue increased to ₹1,456.33 crore, +14.1% YoY but -2.1% QoQ, while gross margin expanded to 8.7% from 6.7% as material and direct project costs grew more slowly than revenue; finance costs rose 50.9% YoY and PAT of ₹27.88 crore was aided by the absence of the ₹2,638.42 crore prior-year exceptional loss.
Segments
EPC remains the group driver at ₹1,382.94 crore of revenue and ₹110.60 crore of segment result, while O&M is the faster-growing business at +40.7% YoY revenue growth to ₹72.90 crore but remains much smaller.
Key positives
- Gross margin expanded 196bps YoY to 8.7%, with construction materials declining to 65.2% of revenue from 70.4%, indicating better project-level cost absorption despite the filing not disclosing the precise driver.
- O&M revenue increased 40.7% YoY to ₹72.90 crore and its segment result rose 16.7% to ₹15.13 crore, providing a faster-growing recurring-service component.
- Net operating cash flow turned positive at ₹166.26 crore in H1FY27 versus ₹358.18 crore of outflow in H1FY26.
- Net debt declined to ₹746.22 crore from ₹800.02 crore at 31 March 2026.
Key concerns
- Revenue declined 2.1% QoQ to ₹1,456.33 crore and EPC segment result fell 20.9% QoQ to ₹110.60 crore, showing that the recovery remains uneven.
- Finance costs increased 50.9% YoY to ₹49.76 crore, limiting conversion of gross-margin improvement into pre-tax profit.
- Trade receivables reached ₹1,849.70 crore while cash and cash equivalents fell to ₹39.57 crore, keeping working-capital intensity high.
- The ₹712.79 crore net exposure to a wholly owned subsidiary, including investments, loans and other receivables, remains dependent on projected future cash flows.
Research and educational content only. Not investment advice.