Anil Singhvi picks Sterling and Wilson Solar as ‘SIP STOCK’ for investors today; Know WHY

Zee Business Managing Editor Anil Singhvi said that he had recommended Avoid when Sterling and Wilson Solar IPO hit the markets. Since then, the share price of Sterling and Wilson Solar has fallen sharply from the issue price. Singhvi said due to higher valuations and Debt, he had recommended Avoid on the IPO. He said now these negative points have become positives. The valuations are attractive, the company has a strong orderbook, It has business in countries where margins are attractive and also, debt is nil now.  Singhvi said it is a Global company and will do EPS of 30 – 35. Singhvi said that the stock could see a target of Rs 450. It is a strong turnaround story and investors should buy this stock. It is from Shapoorji Pallonji Group. A Company which has presence in 25 countries , with more than 245 solar projects Globally, with more than 40 projects under construction .

Singhvi said that there has been a major turnaround in Debt of the company. The company significantly reduced debt levels from highs of Rs 2228 cr as on 31 Mar 2019 to 790 cr as on latest presentation as on February 2021. Interestingly, out of 790 cr around 700 cr is Intercompany Deposits (ICDs) so outside debt is just 90 cr. So, virtually, Sterling and Wilson Solar is a Zero Debt company. This will improve the profitability of the company going forward as there will be no interest burden on it.

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Sterling and Wilson Solar Limited commenced operations in 2011 and was subsequently demerged in 2017. Sterling and Wilson Solar strategically focuses on markets that have conducive solar power policies and high solar resources as well as invests in geographies with long-term solar opportunities.

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Ashish said that currently, company's unexecuted order book is as high as 9674 cr which is around 1.7 times of FY20 Revenue. Market cap of the company is 5000 cr and the company is valued at ROCE 23%. FII holds 6.6% and DII 4.4% in the company.

Ashish highlighted that the company has made many strategic changes. Company is now focussing on India, US and Australia. 75% of Business comes from these countries as the company is seeing higher growth opportunities here. Fundamentals of the company will improve further and it will be a huge rerating candidate. Valuations are extremely attractive at current levels.