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* As expected, Inox Wind revenue fell by 88.5% YoY in 3QFY18 to Rs909mn owing to ongoing transition to auction regime. Looking ahead, though we expect the slowdown to persist in 4QFY18 as well, we envisage normalisation to begin from 1QFY19E onwards, while the execution is expected to pick-up pace from 3QFY19E onwards.
* The stock price has corrected by ~70% in last 24 months owing to concerns over working capital and discontinuation of works on wind projects. Looking ahead, we expect the shift to auctioning route to increase the annual wind market from current 4-5GW to 9GW in FY19-20E.
* We believe FY19 would mark the beginning of a phase of robust growth for the wind industry. The Government has guided for 10GW auction in FY19 and FY20 each. We believe that INXW would be a major beneficiary of auctioning regime owing to its costcompetitive advantage for being the lowest cost producer of wind turbines globally.
* We maintain our BUY recommendation on the stock with a Target Price of Rs155.
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