Reliance Group Stock Reports 91% YoY Drop in Net Profits; Announces Strong Guidance

Synopsis: Sterling & Wilson reported a turnaround in Q3 FY26, with revenue rising 14% year-over-year to Rs 2,092 crore. However, profits remained subdued due to exceptional losses related to arbitration.

The shares of this reliance group company, engaged in end-to-end solar engineering, procurement, and construction (EPC) solutions provider globally, are in focus after it reported a turnaround on a QoQ basis. In this article, we will dive more into the details of it. 

As of September 2025, Reliance New Energy Limited holds a 32.49 percent stake in the company. However, Reliance New Energy’s stake in the company declined from 40 percent in December 2022.

With a market capitalisation of Rs 4,626 crore, the shares of Sterling & Wilson Renewable Energy Ltd closed at Rs 198.15 per share, down 2.2 percent from its previous day’s closing price of Rs 202.65 per share. Over the past five years, the stock has corrected by over 24 percent as compared to NIFTY 50’s positive return of 78 percent.

Q3 Financial Highlights

The revenue from operations for Sterling & Wilson stands at Rs 2,092 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 1,837 crores, up by 14 per cent YoY. Additionally, on a QoQ basis, it reported a growth of 20 percent from Rs 1,749 crore. 

Coming down to its profitability, the company’s net profit stood at Rs 1.55 crore in Q3 FY26, down from Rs 17.14 crore in Q3 FY25, which is a staggering decline of 91 percent YoY. However, on a QoQ basis, it reported a turnaround from a net loss of Rs 478 crore.

This loss stems from a major contract breach by one of its subcontractors. Earlier, in Q2FY26 reported that one of its wholly owned subsidiaries in the US, Sterling and Wilson Solar Solutions, Inc. (SWSS), had terminated a contract with a major subcontractor, based on delays and the subcontractor’s inability to meet contractual obligations. 

However, the case went to arbitration, where the Arbitral Tribunal rejected the subsidiary’s claim of Rs 485.64 crore that the company had expected to recover from the subcontractor. But instead of winning it, the tribunal decided in favour of the subcontractor and granted it a claim of Rs 57.85 crore plus interest.

Moreover, in the course of the quarter, the tribunal also issued a final order that granted additional legal costs, which led to an extra charge of Rs 30.84 crore being reported in Q3FY26. Overall, the company has recognised an exceptional loss of Rs 610.94 crore for the nine months ended December 31, 2025, and has classified it as an Exceptional Item.

On a YoY basis, the company’s EPC segment revenue increased from Rs 1,776 crore in Q3 FY25 to Rs 2,028 crore in Q3 FY26, marking a 14 percent growth. Additionally, the Operation & Maintenance (O&M) service revenue grew from Rs 60.65 crore in Q3 FY25 to Rs 63.25 crore in Q3 FY26, which is a slight growth of over 4 percent over the same period.

Order book

Sterling and Wilson Renewable Energy (SWREL) stated that it expects a stronger FY26 than before. The company has revised its FY26 order inflow guidance to more than Rs 11,000 crore due to solid order wins in Q3 and a strong pipeline for Q4. It booked new orders of Rs 3,086 crore only in Q3 FY26.

The company has experienced a strong momentum, which gave SWRELs unexecuted order value (UOV) a boost to around Rs 10,413 crore, supported by total order inflows of Rs 6,929 crore in the first 9 months of FY26. 

In Q3FY26, SWREL also entered into a 5-year framework agreement with Adani Green and received its first BOS order from them, which the company labelled as a key validation. The company also came through with its second South Africa order worth USD 147 million (Rs 1,287 crore), and added two more renewable projects in India, including a pure BESS order from a leading Indian power company.

Sterling and Wilson Renewable Energy Limited (SWREL) is a global pure-play, end-to-end renewable engineering, procurement, and construction (EPC) solutions provider. The company provides EPC services for utility-scale solar, floating solar, hybrid & energy storage and wind solutions and has a total portfolio of over 26.1 GWp (including projects commissioned and under various stages of construction). 

SWREL also manages an operation and maintenance (O&M) portfolio of 10.1 GWp solar power projects, including those constructed by third parties. Present in 28 countries today, Sterling and Wilson Renewable Energy Limited has operations in India, Southeast Asia, the Middle East, Africa, Europe, Australia, and the Americas.

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