Sterling and Wilson Renewable Expands Its Growth in India from Collaboration with RIL
Sterling and Wilson Renewable Energy (SWREL) is expanding its solar energy portfolio in India while consolidating its position in international markets, particularly Australia, where it is the market leader in solar EPC (engineering, procurement, and construction) contracts.
To increase its market share, it is bidding on large solar EPC projects in Australia. In India, the company expects to receive orders for 3-4 GW of solar energy.
Every year, the company, which will be a part of Reliance Industries in 2022, plans to add 2 GW of capacity in battery storage and green hydrogen.
SWREL was acquired by the RIL group through Reliance New Energy, which owns 40% of it.
SWREL Chairman Khurshed Daruvala stated in the FY23 annual report that the partnership with RIL, which underwrites its contracts, provided it with strong revenue visibility and a favorable market position.
“Our partnership with Reliance Industries has been a significant advantage for us. As RIL accelerates its commitment to establish a new energy manufacturing ecosystem and transitions towards green hydrogen by 2025, we at SWREL stand to benefit from their vision, financial strength, credibility, and robust supply chain.” SWREL also aims to be the frontrunner for carrying out solar EPC work for RIL.
Australia accounts for 40% of its revenue, with India accounting for 31%. Despite the fact that the EPC segment is facing headwinds such as rising labor costs and decreased productivity, the company’s margins remained strong in Australia.
Daruvala stated that the company is already working on some of Australia’s largest solar projects, including a 400 MW solar farm in southern Queensland.
“We are also bidding and are hopeful of maintaining a large market share, which will help us take our margins back to normalized levels in the near future,” he said.
Given the government’s emphasis on renewable energy, the company sees numerous opportunities to expand its operations in India.
The company intends to capture a significant share of the renewables market with RIL as a major stakeholder.
It currently has a global EPC portfolio of 14.7 GW, and its bid pipeline for FY24 is 21.6 GW, with more than half expected to come from India.
The global market for solar EPC is expected to grow at a rate of 14-15 percent per year.
SWREL’s loss increased to Rs 1,175 crore in FY23, up from Rs 915.8 crore the previous year, while revenue fell 61% to Rs 2,015 crore. Profitability was harmed by high solar module prices, primarily sourced from China, as well as supply chain issues. Revenue was impacted by year-end cost provisions and lower contributions from ongoing EPC projects.
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Content Credit: BUSINESSLINE