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Solar EPC Biz at Waaree RTL, SWREL Takes a Hit; Others May Follow Photograph: (AI)
India’s solar engineering, procurement and construction (EPC) business is showing signs of strain, with Waaree Renewable Technologies reporting a sharp decline in solar EPC revenue and Sterling and Wilson Renewable Energy flagging delays in project execution and new order awards during the second quarter of FY27.
The two companies’ results point to different aspects of the pressure facing EPC contractors. Waaree Renewable’s solar power plant EPC revenue fell 42.2% year-on-year to ₹444.98 crore in Q2 FY27, from ₹769.19 crore. Sterling and Wilson, meanwhile, reported an 11.2% decline in consolidated revenue to ₹1,527 crore, although its domestic EPC revenue continued to grow during the first half.
The contrasting performances suggest that the emerging pressure is not necessarily a uniform decline in EPC revenue across the industry. Instead, project timing, the mix of domestic and international contracts, supply-chain constraints and pricing discipline are increasingly influencing individual companies’ results.
Waaree Renewable Technologies reported consolidated revenue from operations of ₹1,057.84 crore in Q2 FY27, up 36.5% from ₹774.78 crore a year earlier. However, the increase was supported by the addition of its transmission and distribution (T&D) business following the acquisition of a 55% stake in Associated Power Structures Pvt Ltd.
Revenue from solar power plant EPC contracts declined by ₹324.21 crore year-on-year to ₹444.98 crore. The solar EPC segment’s result fell by ₹50.38 crore, although its segment result margin improved to approximately 22.9% from 19.8% in the year-ago quarter.
The company’s reported results and management commentary point to expansion through T&D and diversification across the renewable energy value chain. CFO Manmohan Sharma said: “The growth during the quarter was driven by steady progress across our project portfolio, timely execution, and our expanding capabilities across the renewable energy value chain and T&D segment.”
He added that the acquisition of Associated Power Structures had strengthened the company’s position across the T&D infrastructure value chain. Sharma also said acquisition-related financing costs and the addition of a business with a different margin profile had influenced near-term profitability.
The company’s published commentary did not specifically attribute the 42.2% decline in solar EPC revenue to ALMM-II, delayed PPAs or aggressive bidding. Although the finer details through an investors call from the EPC arm of Waaree Group is still awaited. 
Sterling and Wilson Renewable Energy reported Q2 FY27 revenue from operations of ₹1,527 crore, down from ₹1,749 crore in Q2 FY26. First-half revenue declined to ₹3,118 crore from ₹3,510 crore. Its domestic EPC business, however, remained resilient. Domestic EPC revenue grew approximately 13% year-on-year to ₹2,768 crore in H1 FY27. The principal drag on consolidated revenue was international business, where revenue fell to ₹165 crore from ₹929 crore after four projects in South Africa, Spain and Italy were completed and replacement projects had yet to contribute significantly.
Global CEO C.J. Thakur described the first half as a “transition period”, with ongoing projects nearing completion while eight new projects—four in India and four overseas—were awaiting the start of execution. The delays affected projects associated with Coal India and NTPC, where pending PPAs and the absence of final notices to proceed held back execution. Overseas projects also faced delays linked to financing arrangements and other preparatory requirements.
Thakur rejected the suggestion that the company’s execution capabilities were responsible for the delays. “All the ongoing projects, all projects are on track. None of the projects is getting delayed because of our ability to execute the projects,” he said.
Management also identified structural challenges affecting new domestic solar awards. Under the domestic-content requirements associated with ALMM List-II for solar PV cells, applicable projects must use modules incorporating eligible domestically manufactured cells. Thakur said India had more than 200 GW of solar module manufacturing capacity but only around 35 GW of solar cell capacity.
The resulting supply-demand mismatch has made compliant modules scarce and costly. Management estimated that the higher costs could increase project costs by around 15–17%, prompting developers to reassess tariffs and postpone EPC awards.
The company also cited transmission constraints in Rajasthan and Gujarat, delayed PPAs and aggressive bidding. Thakur said Sterling and Wilson had avoided government tenders where prices fell below what it considered commercially viable levels.
The implementation of ALMM List-II for solar cells from June 1, 2026, has introduced another variable into the economics of Indian solar projects. The policy is intended to strengthen domestic manufacturing and reduce import dependence, but the transition has exposed the gap between module and cell manufacturing capacity.
CRISIL Ratings estimated that domestic solar cells could meet around half of India’s 60–65 GW demand in FY27, with imports supplying the balance. It also highlighted delayed PPA signings as a risk to solar module demand.
The consequences for EPC contractors extend beyond the price of cells. Higher equipment costs can force developers to revisit project tariffs, financing assumptions and returns. Projects may be delayed while developers renegotiate supply contracts or wait for better visibility on compliant equipment availability.
Transmission constraints add to the problem. Even where projects have been awarded, the absence of signed PPAs or adequate grid connectivity can delay the start of construction or the ability to evacuate power.
Competition presents a separate risk. Sterling and Wilson has warned that some bidders are quoting prices it considers unsustainable. Contractors accepting low tariffs may subsequently struggle with procurement costs, execution obligations and margins, while more disciplined bidders risk losing orders.
Other Indian solar EPC contractors could face similar pressure if delays in project awards and execution persist. However, the available Q2 FY27 disclosures do not yet establish that the entire sector is experiencing a decline in EPC revenue.
Waaree Renewable’s solar EPC revenue contracted sharply, while Sterling and Wilson’s domestic EPC business continued to expand. The distinction underlines the importance of examining individual business segments rather than relying solely on consolidated revenue.
The impact is likely to vary according to each contractor’s project pipeline, exposure to utility-scale solar, sourcing arrangements, access to domestic cells, pricing discipline and international business.
Companies with projects dependent on delayed PPAs, constrained transmission corridors or higher-cost compliant modules could see revenue recognition shift into subsequent quarters. Contractors that have secured orders at aggressive tariffs may face additional margin risks if equipment costs or execution expenses exceed their assumptions.
At the same time, domestic cell manufacturing capacity is expanding, and a stronger supply chain could gradually ease procurement constraints. Sterling and Wilson expects the market to stabilise as capacity increases and anticipates a stronger second half, supported by projects moving into execution.
The near-term outlook therefore hinges on whether new project awards and execution recover quickly enough to offset delays. For EPC contractors, a growing national solar market will not automatically translate into stronger quarterly revenue or profitability if project economics, grid readiness and equipment availability remain misaligned.
The key indicators to watch in the coming quarters are domestic solar EPC revenue, new order inflows, project commencement dates, segment margins, PPA signings and the availability and pricing of ALMM-II-compliant cells and modules. These will help determine whether Q2 FY27 represents a temporary execution bottleneck or the beginning of a more sustained period of pressure on solar EPC contractors.
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