Buy Inox Wind Ltd for the Target Rs. 158 by JM Financial Services Ltd
1QFY26 Earnings Call: All eyes only on execution
During today’s 1QFY26 earnings call, Inox Wind’s management raised its EBITDA margin guidance from 17–18% to 18–19%, while reiterating its execution guidance of 1,200MW for FY26 and 2,000MW for FY27. Execution is expected to pick up from 3Q onwards, supported by the recent CERC circular on hybridisation of existing transmission infrastructure and seasonality. The company has also successfully completed a rights issue of INR 12.5bn, which is expected to further strengthen its balance sheet. Based on our estimates, Revenue/EBITDA/Adj. PAT are projected to grow at a CAGR of 32%/31%/36% during FY25– 28. We maintain BUY rating on the stock with a revised SOTP-based target price of INR 158 (Earlier TP INR 154), rolling forward our valuation from Mar’27 to Sep’27 earnings.
* Execution: Inox Wind reported execution of 146MW in 1QFY26 vs. 140MW in 1QFY25. For FY26, the management reiterated its execution guidance of 1,200MW. 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. The recent CERC circular on hybridisation of existing transmission infrastructure is expected to further improve execution, providing the company access to nearly 10GW of plug-and-play infrastructure. (Restricted Access policy to accelerate RE addition)
* EBITDA margin: In 1QFY26, the company reported an EBITDA margin of 22% vs. 21% in 1QFY25. For FY26, the management has raised its guidance from 17–18% to 18–19% (vs. 21% in FY25; higher equipment supplies). During the call, it emphasised prioritising profitability over volume metrics.
* Order book: IWL reported an order book of 3.1GW as of Jun’25 vs. 2.9GW in Mar’24. Of the total 3.1GW, 1.4GW comprises equipment supply orders and 1.7GW 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.
* Other highlights: - The company successfully completed a rights issue of INR 12.5bn, which is expected to further strengthen its balance sheet. - Inox Renewable Solutions Ltd (Resco) will be listed under the automatic route following the demerger of connectivity and common infrastructure businesses from Inox Green to Resco. - The management has guided for Inox Green’s O&M portfolio to expand from 5GW currently to 17GW over the next 2 years, with a mix of both solar and wind assets.
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SEBI Registration Number is INM000010361
