Sterling and Wilson Renewable Energy Limited has informed the Exchange about Investor Presentation
October 25, 2023
BSE Limited Phiroze Jeejeebhoy Towers Dalal Street Mumbai – 400 001
Scrip Code: 542760 Scrip Code: 725032 (CP)
National Stock Exchange of India Limited Exchange Plaza Bandra Kurla Complex Bandra (East), Mumbai – 400 051
Symbol: SWSOLAR
Sub.: Investor presentation on the Unaudited Consolidated and Standalone Financial results of Sterling and Wilson Renewable Energy Limited (“the Company”) for the quarter and half year ended September 30, 2023
Ref.: Regulation 30 read with Part A of Schedule III of SEBI (Listing Obligations and
Disclosure Requirements), Regulations, 2015 (“Listing Regulations”)
Dear Sir/ Madam,
Pursuant to the Listing Regulations, please find enclosed herewith the Investor presentation on the Unaudited Consolidated and Standalone Financial results of the Company for the quarter and half year ended September 30, 2023.
Request you to take the same on records.
Thanking you.
Yours faithfully, For Sterling and Wilson Renewable Energy Limited
Jagannadha Rao Ch. V. Company Secretary and Compliance Officer
Encl.: As above
Sterling and Wilson Renewable Energy Limited (Formerly known as Sterling and Wilson Solar Limited) Regd. Office: Universal Majestic, 9th Floor, P. L. Lokhande Marg, Chembur (W), Mumbai - 400043 Phone: (91-22) 25485300 | Fax: (91-22) 25485331 | CIN: L74999MH2017PLC292281 Email: info@sterlingwilson.com | Website: www.sterlingandwilsonre.com
The future of solar energy is
Bright
STERLING AND WILSON RENEWABLE ENERGY LIMITED
Investor Presentation – 2Q FY24 25 Oct 2023
Disclaimer
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sterling and Wilson Renewable Energy Limited (the “Company”), have been prepared solely for information purposes and is not a prospectus, disclosure document, placement document or other offering document under any law, nor does it form part of, and should not be construed as, any present or future invitation, recommendation or offer to purchase or sell securities of the Company or an inducement to enter into investment activity in any jurisdiction. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. If there is any subsequent offering of any security of the Company, it will be made pursuant to separate and distinct offering documentation, and in such case the information in this Presentation will be superseded in its entirety by any such offering documentation in final form.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.
Certain statements made in this Presentation may not be based on historical information or facts and may be “forward-looking statements” by reason of context, including those relating to the Company’s general business plans, planned projects and strategy, future financial condition and growth prospects, future developments in industry and competitive and regulatory environment. All forward-looking statements are based on judgments derived from the information available to the Company at this time. Forward-looking statements can be identified by terminology such as such as “potential,” "opportunity," “expected,” “will,” “planned,” "estimated", "continue", "on-going" or similar terms.
Forward looking statements are based on the current beliefs and expectations of the Company regarding future events, and are subject to various risks and uncertainties, many of which are difficult to predict. Actual results may differ materially from anticipated results due to factors beyond the Company’s control. Such risks and uncertainties include, but are not limited to, challenges to intellectual property, competition from other products, adverse litigation or government action, and changes to laws and regulations applicable to our industry. This Presentation also contains certain financial and operational information relating to the Company that is based on management estimates. These estimates are based on management's past experience and subjective judgment, and the manner in which such estimates are determined may vary from that used for the preparation and presentation of similar information provided by other companies engaged in the sector in which our Company operates. Neither the Company nor its affiliates or advisors or representatives nor any of their respective affiliates or any such person's officers or employees guarantees that the assumptions underlying such forward-looking statements or management estimates are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this Presentation or the actual occurrence of the forecasted developments.. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions, regulations, interest and other fiscal costs generally prevailing in the economy. The Company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the Company.
Why Us
| WHAT DIFFERENTIATES US
Expeditious Quick Decision Making & well-defined internal processes
Experience Track Record of executing complex & large-scale EPC projects leading to customer retention and repeat business
Talent Pool A dedicated design and engineering team focused on innovation and developing efficient and cost effective engineering solutions
Cost Effective Leveraging the Low-Cost India Base for global execution providing cost competitive solutions
Global Presence One of the only Global Pure-Play Solar EPC players with a significant presence and operational experience across geographies
Strong Relationships Strong relationships with customers and other key stakeholders
Our Presence
| ACROSS THE GLOBE
UK
Spain
Jordan
Kazakhstan
USA 455 MWp
Morocco
Egypt
UAE
Vietnam
USA
Mexico
MENA 1,962 MWp
Mali
Nigeria
Saudi Arabia
Thailand
Oman
Kenya
Tanzania
Zambia
India
India 10,043 MWp
Singapore
Southeast Asia 323 MWp
Philippines
Latin America 575 MWp
Chile
Argentina
Namibia
South Africa
Rest of Africa 250 MWp
Offices in 27 Countries
Projects in 19 Countries
As of September 30, 2023
Australia
Australia 1,113 MWp
New Zealand
Financial Highlights
| 2Q FY 2024
Financials
| KEY HIGHLIGHTS FOR 2Q FY24
• Company has received new orders / LOIs worth ~INR 2,640 crore during the quarter. We have received total orders / LOI worth INR 3,106 crore in 1HFY24 from India
• Key orders / LOIs include NTPC (375 MW DC with modules),
GIPCL (750 MW DC), Engie (490 MW DC)
• Net debt of INR 2,123 crore as of September 30, 2023
•
Promoters (SP/KYD) have been issued an indemnity claim of indemnity amounts crystallized as of INR 418 crore for September 30, 2023, which are due on or before 30th November 2023
•
Reported P&L of the company has begun to improve both sequentially and YoY
• Board of Directors of the company has passed a resolution for a
fund raise of upto INR 1,500 crore
• Achieved positive consolidated EBITDA in 2QFY24
• Domestic EPC gross margins continue to operate above 10%
• O&M margins have begun to move towards our target range of
~20-25%
•
Shareholder approval has been sought and the results are scheduled for October 28, 2023
Financials
| RATINGS DOWNGRADE ACTION & DEBT STATUS
•
•
•
•
•
•
•
•
The Company and its subsidiaries had loan payments of INR 329 Cr to various banks in the month of September 2023. Out of the above, the Company made payments of INR 194 Cr
Company had availed INR 250 Cr short term loan for working capital for 1 year which was due on September 30, 2023. Company was able to repay only INR 115 Cr from internal accruals and an amount of INR 135 crore remains overdue as of October 25, 2023
Rating downgrades post our BG invocation in July 2023 made sourcing loans more expensive and difficult
Rating downgrades
India Ratings downgraded our bank facilities rating from BB- to D
Acuite Rating in line with long-term ratings downgraded our short-term facility ratings from A3 to A4
Emphasis of Matter
Auditors have made certain observations in Consolidated and Standalone reports as Emphasis of Matter
Breakdown of Net Debt (INR Crore)
Term debt
Working capital related debt
Commercial Paper
BG loan outstanding
Total Debt
Less: Cash and Bank balance
Net Debt
Sep-23
1,418
385
97
277
2,178
(55)
2,123
Financials
| CONSOLIDATED PROFIT & LOSS – 2Q FY24
INR Crore Revenue from Operations Gross Margin (post project MTM)
Gross Margin %
Q2FY24 Q2FY23 Q1FY24 403 (170) (42.1%)
515 59 11.3%
759 66 8.6%
FY2023 2,110 (651) (30.9%)
Other Income
1
4
3
36
Recurring Overheads
Recurring Overheads %
71 9.4%
86 21.5%
89 17.3%
365 17.3%
Non-recurring Overheads
0
-
0
17
Operational EBITDA EBITDA Margin %
(4) (0.5%)
(252) (62.5%)
(28) (5.4%)
(997) (47.2%)
Forex gain / (loss)
22
(23)
(6)
(26)
Reported EBITDA EBITDA Margin %
EBIT
EBIT Margin %
PBT
PBT Margin %
PAT
PAT Margin
18 2.3%
14 1.8%
(50) (6.6%)
(54) (7.2%)
(275) (67.9%)
(278) (68.9%)
(308) (76.3%)
(299) (74.1%)
(34) (6.5%)
(37) (7.1%)
(95) (18.5%)
(95) (18.5%)
(1,023) (48.5%)
(1,038) (49.2%)
(1,178) (55.9%)
(1,175) (55.7%)
INR Crore Revenue from Operations - International EPC - Domestic EPC - Operation and Maintenance Total
Gross margin - International EPC - Domestic EPC - Operation and Maintenance Total Gross margin %
Q2FY24
Q2FY23
Q1FY24
FY2023
141 567 51 759
(3) 57 12 66 8.6%
200 165 38 403
(182) 17 (5) (170) (42.1%)
159 308 47 515
12 40 7 59 11.3%
1,400 516 190 2,107
(710) 50 10 (651) (30.9%)
Revenue has improved substantially both sequentially and YoY aided by higher
contribution from Domestic EPC segment
Company has reported positive gross margin of ~10% in 1HFY24 aided by the higher contribution from Domestic EPC segment and improving margins in our O&M business. Our unexecuted order book continues to largely comprise of Domestic projects
Company achieved positive reported EBITDA in 2QFY24
Domestic EPC margins continue to remain above ~10% for a second straight
quarter and higher than FY23 margin of 9.7%
O&M constituted 6.7% of revenue in Q2FY24. O&M margin trajectory has
begun to improve and was ~23%
Revenue increased sequentially aided by higher domestic EPC segment
contribution
Standalone Gross margin was 6.7% during the quarter. Higher margins on domestic EPC segment and O&M businesses were offset with negative standalone margins of international EPC
Operational EBITDA (ex-Forex gain/loss) achieved break-even in the
Standalone segment for second consecutive quarter in Q2FY24
Company turned PAT positive in Standalone segment
Financials
| STANDALONE PROFIT & LOSS – 2Q FY24
INR Crore Revenue from Operations Gross Margin (post project MTM)
Gross Margin %
Q2FY24 641 43 6.7%
Q1FY24 384 48 12.5%
FY2023 1,554 (36) (2.3%)
Other Income
Recurring Overheads
Recurring Overheads %
Non-recurring Overheads
Operational EBITDA EBITDA Margin %
Forex gain/ (loss)
Reported EBITDA EBITDA Margin %
EBIT
EBIT Margin %
PBT
PBT Margin %
PAT
PAT Margin
4
42 6.6%
5
0 -
31
31 4.8%
28 4.4%
17 2.7%
14 2.2%
9
40
56 14.6%
0
1 0.0%
(10)
(9) (2.3%)
(11) (2.8%)
(23) (6.0%)
(23) (6.0%)
210 13.5%
71
(277) (17.8%)
(8)
(285) (18.3%)
(292) (18.8%)
(347) (22.3%)
(355) (22.8%)
•
NTPC – I, II, III
BOS package of ~1,570 MW DC
BOS package of ~1,500 MW DC
LOI for Module + BOS package of ~375 MW DC in 2Q
•
•
•
•
GIPCL
Outlook
| DOMESTIC EPC MOMENTUM GAINING TRACTION
India Order Inflow
4,387
2640
INR Cr
5,000
4,000
3,000
2,000
1,000
0
713
466
•
BOS package of ~750 MW DC in 2Q
FY22
FY23
Q1FY24
Q2FY24
Domestic EPC has remained profitable in challenging times
20.0%
0.0%
13.0%
9.7%
10.0%
Gross Margin (FY23)
Gross Margin (Q1FY24)
Gross Margin (Q2FY24)
•
•
•
Received new order of ~490 MW DC in 2QFY24
Received new order of 319 MW DC
Received new order of 72.5 MW DC
SWREL received new orders totaling ~INR 2,800 cr in 2QFY24
Outlook
| MOU ANNOUNCED IN FY23
•
Sterling and Wilson Solar Solutions, Inc (SWSS), the US step down subsidiary signed a MOU with the Government of the Federal Republic of Nigeria, along with its consortium partner Sun Africa in September 2022
• MOU is for the development, design, construction, and commissioning of solar PV power plants aggregating 961 MWp at five different
locations in Nigeria along with battery energy storage systems (BESS) with total installed capacity of 455 MWh
• D&EPC agreement under negotiation
• Deal finalization awaited
SWREL signed a MOU with Nigerian government & Sun Africa to design and construct 961 MW
Outlook
| ORDER BOOK & PIPELINE
Unexecuted Order Value Movement
+3,106
-1,176
6,835
-8
4,913
Gross UOV as on 21 October 2023
Australia 1.4%
USA 0.6%
India 98.0%
UOV as on 31 Mar 2023
Forex adjustments Order inflow
Projects executed in 1HFY24
UOV as on 21 Oct 2023
India 2HFY24 Solar EPC bid pipeline* is growing
New order inflows are lumpy – Impacted by cyclicality and seasonality
INR Cr
Q1
Q2
Q3
1,629
1,057
1,070
16.4 GW
Private IPP 44.6%
PSU 55.4%
FY20
FY21
FY22
FY23
FY24
3,353
1,601
221
-
466
254
1,858
2,640
Q4
987
1,820
244
-
-
364
2,165
Total
4.743
6,774
719
4,387
3,106
* Domestic bid pipeline refers to solar projects where BOS / BOS + module scope of work is anticipated to be awarded by the solar project developers
For further information, please contact:
Company :
Investor Relations Advisors :
Sterling and Wilson Renewable Energy Limited
Strategic Growth Advisors Private Limited
CIN: L74999MH2017PLC292281
CIN: U74140MH2010PTC204285
Mr Sandeep Mathew Head – Investor Relations
Email: ir@sterlingwilson.com
www.sterlingandwilsonre.com
Mr Jigar Kavaiya / Mr. Parin Narichania
+91 9920602034 / +91 9930025733
Email: jigar.kavaiya@sgapl.net / parin.n@sgapl.net
www.sgapl.net