Stock Price Movement and Market Context
On 23 Jan 2026, Sterling & Wilson Renewable Energy Ltd's shares touched an intraday low of Rs.184.7, representing a decline of 2.99% on the day and underperforming its sector by 1.35%. This new low is a notable drop from its 52-week high of Rs.395.3, reflecting a 53.2% decrease over the past year. The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum.
The broader market environment has also been challenging. The Sensex, after opening flat with a marginal gain of 28.57 points, fell sharply by 718.90 points to close at 81,617.04, a decline of 0.84%. The Sensex is trading below its 50-day moving average, although the 50DMA remains above the 200DMA, indicating mixed medium-term market signals. Additionally, the NIFTY REALTY index also hit a new 52-week low on the same day, highlighting sectoral pressures within construction-related stocks.
Financial Performance and Fundamental Metrics
Sterling & Wilson Renewable Energy Ltd's financial indicators have contributed to the subdued market sentiment. The company’s long-term fundamental strength is considered weak, with an average Return on Capital Employed (ROCE) of 5.08%, which is below industry expectations. Over the last five years, net sales have grown at a modest annual rate of 7.05%, indicating limited expansion in revenue streams.
Recent quarterly results further underline the challenges faced. Profit Before Tax (PBT) excluding other income for the quarter stood at Rs.16.65 crore, a sharp decline of 56.8% compared to the average of the previous four quarters. Net Profit After Tax (PAT) for the quarter was Rs.8.12 crore, down 84.5% relative to the prior four-quarter average. These figures reflect a contraction in profitability and earnings quality.
The company’s debt profile also raises concerns. The Debt-to-Equity ratio at the half-year mark is elevated at 2.61 times, indicating a high leverage position. Moreover, the Debt to EBITDA ratio is at -1.00 times, suggesting difficulties in servicing debt obligations efficiently. Such leverage levels can exert pressure on financial flexibility and investor confidence.
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Shareholding and Market Sentiment Factors
Another factor influencing the stock’s performance is the high proportion of promoter shares pledged, which stands at 27.62%. In declining markets, such a level of pledged shares can add downward pressure on the stock price, as forced selling or margin calls may occur if share prices continue to fall.
Over the last year, Sterling & Wilson Renewable Energy Ltd has generated a negative return of 48.25%, significantly underperforming the Sensex, which posted a positive return of 6.66% over the same period. The stock has also lagged behind the BSE500 index in the last three years, one year, and three months, indicating persistent underperformance relative to broader market benchmarks.
Valuation and Comparative Metrics
Despite the challenges, the company’s valuation metrics present some points of interest. Sterling & Wilson Renewable Energy Ltd has an Enterprise Value to Capital Employed ratio of 4.2, which is considered attractive relative to its peers. The company’s ROCE of 22.4% in certain assessments suggests pockets of operational efficiency, although this contrasts with the longer-term average of 5.08%.
Profitability has shown some improvement in absolute terms, with profits rising by 635.6% over the past year, despite the stock’s negative price performance. The Price/Earnings to Growth (PEG) ratio is reported as zero, reflecting the complex interplay between earnings growth and valuation in the current context.
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Mojo Score and Rating Update
The company’s Mojo Score currently stands at 23.0, with a Mojo Grade of Strong Sell as of 12 Jan 2026, an update from the previous Sell rating. This downgrade reflects the deteriorating fundamentals and market performance. The Market Cap Grade is rated at 3, indicating a relatively modest market capitalisation compared to peers.
Summary of Key Metrics
To summarise, Sterling & Wilson Renewable Energy Ltd’s stock has reached a new 52-week low of Rs.184.7, amid a 48.25% decline over the past year. The company faces challenges including subdued revenue growth, declining profitability, high leverage, and significant promoter share pledging. These factors have contributed to the stock’s underperformance relative to the Sensex and sector indices. While valuation metrics show some relative attractiveness, the overall financial and market indicators have led to a Strong Sell rating by MarketsMOJO.
Investors and market participants will continue to monitor the stock’s price action and financial disclosures closely as the company navigates these conditions.
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