Buy Inox Wind Ltd For Target Rs. 172 By JM Financial Services Ltd
2QFY26: Earnings miss; FY26 guidance maintained
Inox Wind (IWL) reported revenue of INR 11.2bn (53% YoY, -4% JMFe, -11% Cons) in 2QFY26 driven by execution of 202MW in 2QFY26 vs. 140MW in 2QFY25 and a corresponding increase in blended realisation to INR 55mn/MW from INR 52mn/MW. However, EBITDA margin declined to 20% vs. 23% in 2QFY25 due to increase in other expense and EPC cost. Adj PAT came in at INR 1.2bn in 2QFY26 (43% YoY, - 15% JMFe, -1% Cons). Company bagged order of 400MW in H1FY26. We expect IWL’s execution to accelerate from 705 MW in FY25 to 1,050 MW / 1500MW in FY26/ FY27 (vs. guidance of 1200MW/ 2000MW). As per our estimates, Revenue/ EBITDA/ Adj. PAT will grow with CAGR of 35%/ 34%/ 42% during FY25-28E. We maintain BUY rating on the stock with SOTP-based TP of INR 172 (earlier INR 154) as we roll forward to Sep’27 earnings.
* Execution: Inox Wind reported execution of 202MW in 2QFY26 vs. 140MW in 2QFY25. A pickup in execution is expected from 3Q onwards, as execution typically accounts for 30–35% of annual volume in 1H and 65–70% in 2H. Going ahead, management had guided for execution of 1200MW/ 2000MW in FY26/ FY27. We expect execution of wind projects by IWL to accelerate from 705MW in FY25 to 1,050MW / 1,500MW/ 1,600 MW in FY26/ FY27/ FY28.
* EBITDA margin: In 2QFY26, the company reported an EBITDA margin of 20% vs. 23% in 2QFY25 due to increase in other exp by INR 483mn (63% YoY) and EPC cost by INR 486mn (2.3x YoY). In earlier ConCall, the management has raised its guidance from 17–18% to 18–19% (vs. 21% in FY25; higher equipment supplies). Management has emphasised prioritising profitability over volume metrics.
* Order book: IWL reported an order book of 3.2GW as of Sep’25 vs. 3.3GW in Sep’24. Of the total 3.2GW, 1.4GW comprises equipment supply orders and 1.8GW comprises EPC orders. The company currently has a multi-GW pipeline and expects to convert a substantial portion into firm orders over the coming quarters. The order mix is gradually shifting towards a 50:50 split between turnkey and equipment supply contracts. The existing order book provides visibility for around 2 years of production. Additionally, company’s group IPP is expected to provide visibility for 500-700MW annual orders in upcoming years.
* Amalgamation of IWEL and IWL: Inox Wind Energy Ltd (IWEL) is amalgamated into Inox Wind Ltd. to streamline the group’s organisational structure and enhance operational efficiencies with a swap ratio of 632 IWL/ 10 IWEL. Prior to the merger, the shareholding structure of IWL consisted of a 48% promoter stake and a 52% non-promoter stake. Following the merger, the total number of shares will increase to 1,624.1 mn (+24.5%), resulting in a dilution of the promoter stake to 44% and an increase in the non-promoter stake to 56%. Due to this merger liability on IWL’s balance sheet reduces by INR 20.5bn. (Amalgamation of Inox Wind Energy into Inox Wind)
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SEBI Registration Number is INM000010361
