Indian solar constructor, Sterling And Wilson, is just a step away from formally inking a deal for building a 62.5 MW solar plant in Jordan. The West Asian country would be S&W’s third international presence, after South Africa and the Philippines.

 

The Shapoorji Pallonji group company is building 200 MW of solar projects in South Africa and about 100 MW in the Philippines. In India, it has orders on hand for 1,200 MW, of which 650 MW will be executed in the current financial year, Bikesh Ogra, President, Solar & Electrical Division, said today. Of the jobs in the Philippines, a project of 25 MW was won a few days back.

 

On the basis of these international orders, he says, “Indian solar EPC is globally competitive.”

 

Low margins

 

Building solar power plants for companies that would own them is not quite everybody’s cup of tea, says Ogra, noting that Sterling And Wilson has the advantage of being part of a group that has been in the project construction business for close to a century.

 

The group’s resources, such as manpower, comes in handy for solar plant construction, where the margins are very low.

 

Two years back, solar EPC (engineering, procurement, construction) jobs used to be picked up for Rs 8.5 crore a MW, observes Ogra. Today, the EPC company gets between Rs 5 and Rs 5.5 crore.

 

“It is a ‘fast turnaround’ business,” he says, where the wafer-thin margins can make a meaningful contribution to profits only by doing more jobs in a year.

 

However, while building solar plants is not highly profitable, it is a “negative capital employed, positive cash flow” business, says Ogra. Sterling And Wilson expects its turnover for the current year to be around Rs 4,500 crore, including international operations.

 

The company is hungry for more international jobs. It wants overseas orders to account for half the revenues in the next three years.

 

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