SWSOLAR - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 2.8

📊 Financials: SWSOLAR has a market cap of ₹5,001 Cr. Current price is ₹214 with a 52-week high/low of ₹480/₹197. PAT this quarter is ₹54.9 Cr vs ₹78.4 Cr in the previous quarter, showing decline. ROCE at 13.5% and ROE at 11.2% reflect moderate efficiency. Debt-to-equity ratio of 2.60 indicates high leverage risk. EPS is reported at -₹100, highlighting stressed profitability.

💹 Valuation: Stock P/E is 16.5, slightly below industry PE of 18.8, suggesting fair valuation. Book value is ₹20.1, giving a P/B ratio of ~10.6, which is expensive relative to fundamentals. PEG ratio at 0.29 indicates growth support but earnings inconsistency weakens reliability. Dividend yield is 0.00%, offering no shareholder return.

🏭 Business Model: SWSOLAR operates in renewable energy, focusing on solar power generation and EPC projects. Competitive advantage lies in sector tailwinds from clean energy demand and government incentives. However, high debt and weak profitability limit overall health.

📈 Entry Zone: Technically, DMA 50 (₹228) and DMA 200 (₹287) are above current price, showing bearish trend. Entry is favorable near ₹200–₹215 if price consolidates. Current RSI at 42.6 indicates mildly oversold conditions, offering potential accumulation opportunity.

🕰️ Long-Term Holding: Renewable energy sector tailwinds support long-term potential, but high debt, weak EPS, and declining profits limit attractiveness. Investors should accumulate cautiously only on dips closer to intrinsic value zones.

Positive

• ✅ Sector tailwinds from renewable energy demand
• ✅ ROCE (13.5%) and ROE (11.2%) moderately healthy
• ✅ Strong trading volumes (21.7L vs avg 13.4L)

Limitation

• ⚠️ High debt-to-equity ratio (2.60)
• ⚠️ Negative EPS (-₹100)
• ⚠️ P/B ratio ~10.6 indicates premium valuation
• ⚠️ No dividend yield (0.00%)

Company Negative News

• 📉 FII holding reduced (-1.30%)
• 📉 DII holding reduced (-1.84%)
• 📉 Quarterly PAT decline (78.4 Cr → 54.9 Cr)
• 📉 Quarterly profit variation (-26.8%)

Company Positive News

• 📈 Sector supported by government incentives for renewable energy
• 📈 Moderate ROCE and ROE despite debt pressure

Industry

• 🏭 Renewable energy industry PE at 18.8 highlights fair sector valuation
• 🏭 Sector supported by clean energy demand and policy incentives

Conclusion

🔎 SWSOLAR is fundamentally weak with high debt, negative EPS, and declining profitability, despite sector tailwinds. Entry zone lies near ₹200–₹215. Long-term investors should accumulate cautiously on dips, while monitoring debt levels and earnings stability.

Would you like me to extend this with a peer benchmarking overlay comparing SWSOLAR against other renewable energy companies, or a sector scan to highlight undervalued clean energy players?