Synopsis: A Reliance Group solar EPC player is turning a corner -order books are swelling, margins are beating estimates, debt is falling, and a battery storage push could redefine its growth story.
India’s renewable energy sector is graduating from basic solar deployment to something far more complex. Companies that can execute large end-to-end projects, manage volatile commodity cycles, and pivot into emerging verticals like battery storage are the ones drawing institutional attention. One Reliance Group-backed name appears to be doing exactly that. Nuvama has maintained a ‘Buy’ on Sterling and Wilson Renewable Energy with a target price of Rs 300, i.e., an upside of 44% from current levels.
A pipeline that stands on its own
Order momentum is broad-based and doesn’t rely on group support to look compelling. Management has guided for 15% growth in both revenue and order inflows for FY27. The unexecuted order book currently stands at around Rs 11,800 crore, expected to grow to Rs 14,000 crore by end-FY27. The bid pipeline running at 31GW holds up even after excluding potential large-ticket Reliance Industries orders -signalling that demand is coming from multiple independent directions, which meaningfully de-risks the growth outlook.
Margins do the heavy lifting despite a revenue miss
The latest quarter was uneven on the surface but impressive underneath. Revenue came in at around Rs 1,950 crore, missing estimates as some project supplies got deferred amid commodity price swings. But profitability told a different story -EBITDA landed around Rs 150 crore, well ahead of expectations, with PAT also posting a strong beat. Gross margins firmed up to 11.5% and EBITDA margins expanded to 7.5%, both ahead of the prior year. Easing raw material costs and tighter expense control were the key drivers -suggesting the improvement is structural rather than a one-quarter anomaly.
Balance sheet quietly getting stronger
Net debt fell sequentially to around Rs 630 crore, reflecting better cash generation and disciplined working capital management. The company has also secured fresh credit lines worth approximately Rs 2,800 crore. Lower debt combined with higher available credit gives it the financial headroom to bid aggressively on large projects – an increasingly important capability as project sizes in the sector continue to scale up.
Battery storage emerges as the next growth layer
The most forward-looking element of the thesis is the company’s push into battery energy storage systems. Around 20% of new order targets are now being directed toward BESS – moving the business beyond traditional solar construction into infrastructure that makes renewable power stable and dispatchable. Storage contracts tend to be more complex and potentially higher-margin than pure EPC work. With India’s grid integration challenges growing alongside capacity additions, demand for storage solutions is set to accelerate – giving the company an early mover edge in what could become a primary revenue vertical over the next few years.
Valuation gap leaves room for a re-rating
The stock trades at just 11x FY28 earnings after adjusting for the option value of a potential Reliance Industries order, which Nuvama pegs at Rs 48 per share. Peers trade at 18x – leaving a wide gap the brokerage believes will close as execution improves and new segment revenues start flowing in. With FY26 shaping up as a strong base year, Nuvama sees the conditions in place for an accelerating earnings trajectory driven by operational leverage and a swelling order book.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
The post Reliance Group Stock to Buy Now for 44% Upside Potential appeared first on Trade Brains.