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4QFY25: Miss on execution; maintain BUY

Inox Wind (IWL) in 4QFY25 reported revenue of INR 12.8bn (2.4x YoY, 4% JMFe, -17% Cons) driven by increase in execution to 236MW in 4QFY25 vs. 129MW in 4QFY24 and blended realisation of INR 54mn/MW in 4QFY25 vs. INR 41mn/MW in 4QFY24. EBITDA margin stood at 20% vs. 19% in 4QFY24 and 23% JMFe. Adj PAT came in at INR 1.9bn in 4QFY25 (3x YoY, -6% JMFe, 3% Cons). Company reported execution of 705MW which was below management guidance of 800MW. We expect execution of wind projects by IWL to accelerate from 705MW in FY25 to 1,150MW/ 1,750MW in FY26/FY27, which will result in Revenue/ EBITDA/ Adj. PAT CAGR of 45%/ 46%/ 55% during FY25-28. We maintain BUY rating on the stock with SOTP-based TP of INR 216 on FY27E.

* Order book: IWL has reported order book of 3.2GW as of Mar’25 vs. 2.6GW in Mar’24. Order inflow in FY25 stands at 1.5GW from Hero Future Energies, Inox Neo Energies, Integrum Energy, Everrenew, Continuum & Serentica Renewables. Company’s 3.2 GW order book constitutes of 1.4 GW equipment supply orders and 1.8 GW of EPC orders.

* Execution: In 4QFY25, execution stood at 236MW vs. 129MW/ 140MW in 4QFY24/ 3QFY25. In FY25, management has guided for annual execution of 800MW whereas the actual execution was 705MW. 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 1,150MW/ 1,750MW in FY26/FY27.

* 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)

* Other highlights:

- New nacelle plant near Ahmedabad, Gujarat is at advanced stages of commissioning.

- Subsidiary Inox Green’s renewables O&M portfolio surges to ~ 5.1 GW, with foray into solar O&M segment.

- Inox Green’s revenue/ EBITDA in FY25 stood at INR 2.9bn/ INR 1.2bn.

- Inox Green targets portfolio of 10GW in next 2 years through mix of organic and inorganic growth.

- Net cash as on Mar’25 stood at INR 1.7bn.

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