Buy Sterling and Wilson; target of Rs 870: Anand Rathi

Anand Rathi's research report on Sterling and Wilson

Globally, renewable energy capacity added in CY23 was a record 507GW, up 50% y/y. The International Energy Agency estimates 3,178GW are likely to be added over CY24-28. In India, capacity is likely to be 500GW by 2030 (vs. 192GW at end -FY24), benefiting EPC companies. Sterling & Wilson is a pure-play global solar EPC and O&M service provider.

Outlook

We model solar EPC orders of ~Rs496bn over FY25-27 across markets. RIL’s plan to set up 100GW renewable energy capacity (predominantly solar and battery storage) by 2030 to meet its net-zero goal, could offer EPC opportunities of Rs1.1trn over FY26-31, ~Rs300bn for S&W, and O&M services of ~Rs24bn. We initiate coverage on S&W, at a DCFbased TP of Rs870.

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