FIIs flocked to this green energy stock in Q3; shares hit upper circuit today

Shares of Sterling and Wilson Renewable Energy Ltd have risen 28% in the last six sessions after the firm announced its Q3 earnings. The rally in the stock comes amid disclosure of December 2023 quarter shareholding data, which show FIIs raised their stake by 8% from the previous quarter. FIIs owned 3.38% stake in the green energy stock in the September 2023 quarter.

They raised stake to 11.91%, buying 8.53% in the December 2023 quarter. Goldman Sachs Funds - Goldman Sachs India Equity Portfolio (1.22%), East Bridge Capital Master Fund I Ltd (1.24%) and Troo Capital Ltd (1.52%) bought stake in Sterling and Wilson Renewable Energy in the last quarter. In the September quarter, Societe Generale owned 1.14% stake in the green energy stock.

Sterling and Wilson Renewable Energy shares touched a record high, hitting upper circuit of 5% today. Sterling and Wilson stock rose 5% to a record high of Rs 576.30 against the previous close of Rs 548.90 on BSE. A total of 0.92 lakh shares of the firm changed hands amounting to a turnover of Rs 5.22 crore on BSE. Market cap of the firm rose to Rs 13,428 crore on BSE. It opened higher at Rs 564.95 today.

On January 18, the firm said consolidated net loss narrowed to Rs 62.39 crore in the December 2023 quarter from Rs 99.15 crore in the December 2022 quarter on the back of higher revenues. Total income rose 46% to Rs 610.31 crore against Rs 417.65 crore in the same period a year ago.

The share fell to a 52 week low of Rs 253.45 on October 19, 2023.

Nuvama has kept its target price unchanged at Rs 620 post Q3 earnings.

“Sterling and Wilson has substantially pared down net debt to Rs 27 million (Rs 21 bn as on Sep-23) using QIP/indemnity proceeds. We forecast a V-shaped earnings recovery from FY25, accelerating to a hockey stick curve on strong global outlook (Hockey stick curve). We keep estimates/target price unchanged at Rs 620 and assign a blue-sky value of Rs 1,499,” said Nuvama.

In terms of technicals, the relative strength index (RSI) of Sterling and Wilson stands at 82.4, signaling it's trading in the overbought territory. The stock has a beta of 0.2, indicating low volatility in a year. Shares of Sterling and Wilson are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The total order inflows climbed over Rs 2,400 crore leading to further strengthening of the order book. The company had raised Rs 1,500 crore through a QIP in December 2023.

"During Q3FY24, we have witnessed notable strides in advancing our renewable energy portfolio with four unique projects from India as well as our first significant overseas order in three years," said Amit Jain, Global CEO, Sterling and Wilson Renewable Energy.

Post the successful QIP, our balance sheet has significantly strengthened, and fully geared to pursue the fast growing solar engineering, procurement, and construction (EPC) markets in India and abroad, he stated. The unexecuted order book of the company stood at Rs 8,750 crore, he added.

Sterling and Wilson Renewable Energy is a global end-to-end renewable engineering, procurement, and construction (EPC) solutions provider. It provides EPC services primarily for utility-scale solar power projects with a focus on project design and engineering and manages all aspects of project execution from conceptualising to commissioning. It has a presence across 29 countries with operations in India, Southeast Asia, and others.

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