Sterling and Wilson Renewable Energy (SWREL) is leveraging its partnership with Reliance Industries to grow its solar energy portfolio in India while consolidating its position in international markets, especially Australia, where it is the number one player in solar EPC (engineering, procurement, construction) contracts.
It is bidding for big solar EPC projects in Australia to further increase its market share. In India, the company targets order bookings of 3-4 GW in solar energy.
The company, which became a part of Reliance Industries in 2022, plans to add 2 GW capacity in battery storage and green hydrogen every year.
SWREL came under the RIL group through Reliance New Energy, which holds a 40 per cent stake in it.
In the FY23 annual report, SWREL Chairman Khurshed Daruvala said that the partnership with RIL, which underwrites its contracts, gave it strong revenue visibility and a favourable position in the market.
“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 per cent of its revenue, followed by India at 31 per cent. The company maintained its leadership position in Australia despite the headwinds the EPC segment faces with an increase in labour costs and loss of productivity, which hit the company’s margins.
Daruvala said the company is already working on some of the biggest solar projects in Australia, including a 400 MW solar farmin southern Queensland. “We are also bidding and are hopeful of maintaining a large market share, which will help us take our margins back to normalised levels in the near future,” he said.
The company sees plenty of opportunities to grow its business in India, given the government’s thrust on renewable energy. With RIL as a major stakeholder, the company aims to capture a significant share of the renewables market.
It currently has a 14.7-GW global EPC portfolio, while its bid pipeline for FY24 is 21.6 GW, with over half expected from India.
The global market for solar EPC is seen growing 14-15 per cent annually.
In FY23, SWREL’s loss widened to Rs 1,175 crore from Rs 915.8 crore a year ago, while revenue fell 61 per cent to Rs 2,015 crore. Profitability was hit by high prices of solar modules, sourced mainly from China, and supply chain issues. Revenue was hit by cost provisions made during the year and lower contributions from ongoing EPC projects.