Buy Inox Wind Ltd for the Target Rs. 154 by JM Financial Services Ltd
Inox Wind (IWL) reported revenue of INR 8.3bn (29% YoY, -5% JMFe, -10% Cons) in 1QFY26 driven by an increase in blended realisation to INR 57mn/MW in 1QFY26 up from INR 46mn/MW in 1QFY25. Execution during 1QFY26 stood at 146MW vs. 140MW in 1QFY25. EBITDA margin improved to 22% vs. 21% in 1QFY25. Adj PAT came in at INR 973mn in 1QFY26 (2.5x YoY, -4% JMFe, 2% Cons). Company bagged a modest order of 51 MW. We expect IWL’s execution to accelerate from 705 MW in FY25 to 1,150 MW in FY26. However, due to muted order inflows and increasingly challenging execution, we have revised our execution numbers downwards from 1,750 MW/ 2,000 MW to 1,400MW/ 1,500 MW in FY27/FY28. As per our estimates, Revenue/ EBITDA/ Adj. PAT will grow with CAGR of 32%/ 31%/ 36% during FY25-28. We maintain BUY rating on the stock with SOTP-based TP of INR 154 (earlier INR 216) on FY27E.
* Order book: IWL has reported order book of 3.1GW as of Jun’25 vs. 2.9GW in Mar’24. The Company has received 51MW of new order during the quarter. Of the total 3.1GW order book, 1.4GW comprises equipment supply orders and 1.7GW comprises EPC orders. Major customers include CESC (1.5GW) and Inox Neo Energies (750MW).
* Execution: In 1QFY26, execution stood at 146MW vs. 140MW/ 246MW in 1QFY25/ 4QFY25. In FY25, management had 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/ 1,400MW/ 1,500 MW in FY26/FY27/FY28.
* 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.
* Other highlights:
- New nacelle plant near Ahmedabad, Gujarat has been operationalized.
- Subsidiary Inox Green’s renewables O&M portfolio surges to c. 5.1 GW (3.5GW wind/ 1.6GW Solar).
- Inox Green’s revenue/ EBITDA in 1QFY26 stood at INR 900mn/ INR 400mn vs. INR 550mn/ INR 300mn in 1QFY25.
- Inox Green targets portfolio of 10GW in next 2 years through mix of organic and inorganic growth.
- Management has conference call on 1 Sept’25.
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SEBI Registration Number is INM000010361
