SWSOLAR - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.5

☀️ Fundamental Analysis: Sterling and Wilson Renewable Energy (SWSOLAR)

Strengths

ROCE (16.0%): Decent capital efficiency for a renewable EPC player.

Debt-to-Equity (0.93): Manageable leverage for a project-heavy business.

Quarterly PAT Surge (663%): Strong rebound, though sustainability is uncertain.

Sector Tailwinds: Long-term demand for solar infrastructure is robust.

Weaknesses

ROE (8.24%): Below ideal for long-term compounding.

High P/E (62.2) vs Industry P/E (23.8): Valuation is stretched.

PEG Ratio (2.23): Indicates overvaluation relative to earnings growth.

Zero Dividend Yield: Not attractive for income investors.

Decline in DII Holding (-2.48%): Institutional sentiment weakening.

📉 Technical & Trend Analysis

RSI (37.9): Near oversold zone, potential for short-term bounce.

MACD (-4.94): Bearish momentum persists.

Price below 50 DMA (₹307) and 200 DMA (₹365): Long-term downtrend confirmed.

Volume: Slightly below average, indicating weak participation.

💰 Ideal Entry Price Zone

Accumulation Zone: ₹250–₹275

This range aligns with technical support and offers a better risk-reward ratio.

Price near ₹250 coincides with Fibonacci retracement and wedge breakout zone

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🧭 Exit Strategy / Holding Period

If you already hold SWSOLAR

Hold for 3–5 years only if you believe in the solar EPC growth story and expect margin expansion.

Exit partially if price rebounds to ₹420–₹460 and valuation remains expensive.

Reassess if ROE stays below 10% or debt levels rise sharply.

Long-Term Outlook

2026 Target Range: ₹684–₹705

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2030 Target Range: ₹513–₹521

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Risks: Execution delays, regulatory changes, and promoter credibility issues

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🧠 Summary

SWSOLAR is a high-risk, high-reward play in the renewable energy space. It’s not a classic compounding stock but could deliver strong returns if execution improves and global solar demand accelerates. Ideal for tactical investors with a long horizon and appetite for volatility.

Would you like a comparison with Adani Green or Tata Power to assess sector alternatives?

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