Sterling & Wilson: Riding the Green Hydrogen Wave

Sterling & Wilson Renewable (SWREL) is a leading solar EPC player now stepping firmly into India’s green‑hydrogen push. With Reliance Industries holding a 40 percent stake, the company gains strong financial backing, strategic alignment with large‑scale renewables, and access to one of the biggest domestic clean‑energy ecosystems. This gives shareholders a leveraged play on both solar and the emerging hydrogen value chain. From a shareholder view, the move is largely constructive but comes with execution and margin risk. The company booked a record revenue of around ₹7,500 crore in FY26, driven by robust solar EPC demand and a healthy order backlog of over ₹11,000 crore. Management has guided for about 15 percent growth in both revenue and new orders in FY27, which should support top‑line stability and potential earnings de‑leveraging if margins normalise. However, FY26 also showed a net loss due to a large exceptional charge, reminding investors that project‑execution hiccups, regulatory changes, and working‑capital pressure can weigh on near‑term profits. The real value for shareholders will depend on how well SWREL converts its solar‑deployment strength into profitable electrolyser and hydrogen‑infrastructure execution. If it secures repeat orders from Reliance and other large developers, shareholders stand to benefit from scale, recurring revenue, and higher‑quality order book instead of one‑off, low‑margin projects. On balance, the green‑hydrogen pivot is a positive strategic bet but not a guaranteed upside. For existing shareholders, the key positives are policy tailwinds, Reliance backing, and a strong project pipeline; the main risks are execution risk, margin pressure, and the usual volatility in order flow and project timelines.