Sterling & Wilson Renewable Energy secures ₹1,381 Cr Adani deal; traders eye 48% upside.

Sterling & Wilson Renewable Energy just landed its biggest domestic EPC contract of the year, yet the stock sits a mere ₹2.40 above its 52-week low. For traders, this disconnect screams opportunity and risk in equal measure.

The ₹1,381 crore Adani Green Energy partnership announced on December 1st should have been a breakout catalyst. Instead, SWSOLAR closed Friday at ₹220.85, down 52% year-to-date. Something isn’t adding up, and that mismatch is exactly where trading edges are forged.

What Happened

Sterling & Wilson Renewable Energy (SWREL) signed a five-year Strategic Partnership Framework Agreement with Adani Green Energy, India’s largest renewable energy developer. The deal inked on December 1st immediately yielded its first purchase order: a Balance of System (BOS) package for three solar projects at the massive Khavda Renewable Energy Park in Gujarat.

The ₹1,381 crore order covers equipment supply and on-site services. More importantly, it adds 1 GW to SWREL’s existing 6 GW execution pipeline at Khavda, with management confirming 5 GW will be completed this fiscal year alone. Chandra Kishore Thakur, Global CEO, called it their “biggest domestic EPC contract of the year,” strengthening collaboration between India’s renewable energy leader and a top-tier solar EPC player.

This single order pushed SWREL’s total order inflow for FY2025-26 past ₹6,450 crore, signaling robust demand despite the company’s recent operational hiccups. The partnership framework suggests more orders could flow from Adani over the next five years, providing a potentially steady revenue stream.

Stock Performance & Analyst View

At ₹220.85, SWSOLAR trades just 1.1% above its 52-week low of ₹218.45. The stock’s 52-week high stands at ₹525.95, with an all-time high of ₹828.00 reached in May 2024. From that peak, we’re looking at a 73% decline.

The recent daily price action shows persistent selling pressure. The stock peaked at ₹238.50 on the announcement day but couldn’t sustain momentum, gradually slipping back to current levels. Volume on December 5th was 10.12 lakh shares, 54.66% below average, indicating weak conviction on both sides.

Despite the downtrend, analyst sentiment remains surprisingly bullish. According to Nasdaq data from October 29, 2025, the average price target sits at ₹326.91, implying 48% upside from current levels. The target range spans from ₹257.55 to ₹405.30.

Multiple research firms maintain Buy ratings. Stockopedia reports a consensus “Buy” recommendation with a ₹320.50 target (45.1% upside), while Investing.com India shows a “Strong Buy” consensus based on two analysts with an average target of 320.5. Motilal Oswal identifies SWREL as the leading EPC player in solar projects with a positive outlook on global solar adoption.

However, Trendlyne’s December 3rd report adds a critical red flag: while revenue growth is forecast at 20% for FY26, profit growth is estimated at a devastating -163.5%. This divergence signals severe margin pressure or exceptional losses ahead.

What This Means for Traders

Stock Momentum Context: The technical picture remains firmly bearish. SWSOLAR is down 52% in 2025 and trading near structural support. However, the Adani partnership could mark a sentiment inflection point. The key is whether the stock can hold above ₹218.45 support. A break below could trigger accelerated selling toward ₹200 psychological support.

Entry/Exit Considerations: For aggressive traders, current levels near 52-week lows offer a high-risk, high-reward entry. The risk-reward ratio is attractive if you believe the Adani contract validates the business model. Position size must be kept small, with a hard stop-loss at ₹217, just below the 52-week low.

Conservative traders should wait for price confirmation. A close above ₹235-240 would signal potential trend reversal. The real test comes at ₹260-270, which was former support turned resistance. Only a sustained move above ₹270 would invalidate the bearish structure.

Sentiment Shift: The Adani partnership represents a vote of confidence from India’s largest renewable energy developer. This could counteract negative sentiment from Q2’s massive ₹478 crore loss. The market is weighing operational validation against financial distress.

Key Price Levels:

• Critical Support: ₹218.45 (52-week low) – must hold or risk breakdown
• Secondary Support: ₹200.00 (psychological level)
• Immediate Resistance: ₹235.00 (recent swing high)
• Major Resistance: ₹238.50 (announcement day peak)
• Trend Resistance: ₹260.00 (August breakdown level)

Next Catalysts:

1. Q3 FY26 Earnings (January 14-15, 2026): Will show if Q2’s loss was an aberration or trend
2. Khavda Project Commissioning: 5 GW slated for completion this fiscal year – track execution timelines
3. O&M Revenue Pickup: Management expects meaningful revenue acceleration from O&M segment in H2 FY26
4. Follow-on Adani Orders: This partnership framework could yield additional contracts
5. South Africa Project: 240 MW AC project worth $147 million diversifies geographic risk

Risk Factors:

• Debt Crisis: Debt-to-equity ratio of 259.7% and net debt-to-equity of 163.9% creates financial fragility
• Profitability Collapse: Q2 FY26 showed ₹478 crore loss due to ₹637 crore arbitration write-off
• Negative Growth Forecast: Trendlyne projects -163.5% profit growth for FY26
• Legal Overhang: Bombay High Court ordered ₹614 million deposit in Axis Bank suit
• Execution Risk: Khavda’s 5 GW target this fiscal is aggressive; any slippage will hammer sentiment
• Promoter Pledging: 27.6% of promoter shares are pledged, indicating potential liquidity stress

The Bigger Picture

India’s solar EPC market is booming, with a projected CAGR exceeding 15% through 2030, driven by the country’s 280 GW solar target. The Khavda Renewable Energy Park alone represents a 30 GW opportunity (26 GW solar, 4 GW wind) with total investment of INR 1.5 lakh crore. SWREL is positioned as a dominant EPC player, already executing 6 GW in this flagship park.

The December 2024 NTPC tender for 1,200 MW BOS packages at Khavda validates the massive opportunity in balance-of-system work. SWREL’s partnership with Adani gives it a preferred supplier status in the world’s largest renewable energy cluster. However, the company must navigate working capital challenges and margin pressure in an increasingly competitive market.

Trading Takeaway

For aggressive traders, SWSOLAR at ₹220.85 offers a contrarian play with defined risk. The 48% analyst upside target provides adequate reward potential if the stock can stabilize above ₹218.45 support. Position sizing should reflect the high-risk nature of a leveraged, loss-making EPC company.

Conservative traders should wait for the earnings turnaround story to materialize. A move above ₹250 with expanding volume would signal institutional buying returned. Until then, this remains a speculative bet on execution recovery rather than fundamental strength.

The Adani partnership validates SWREL’s technical capabilities, but the balance sheet remains the elephant in the room. Watch the debt levels and working capital management in the next earnings report. That will determine whether this is a genuine turnaround or a value trap at 52-week lows.

Disclaimer: This blog has been written exclusively for educational purposes and does not constitute investment advice or personal recommendations. The author is not SEBI-registered as an investment advisor. Recipients should conduct their own research and consult a qualified, SEBI-registered investment advisor before making any investment decisions. Investments in the securities market are subject to market risks; read all related documents carefully before investing.