Brokerages hike target for Inox Wind, expect strong execution; stock up 19%

Shares of Inox Wind surged up to 9 per cent at Rs 189.90 per share on the BSE in Monday's intraday trade

Shares of Inox Wind surged up to 19.40 per cent, hitting its 52-week high at Rs 208 per share on the BSE in Monday’s intraday trade. The stock price surged after the company reported its April-June quarter of financial year 2024-25 (Q1FY25).

The wind energy solutions provider's revenue from operations surged 83.18 per cent year-on-year (YoY) to Rs 638.81 crore for Q1FY25. The company reported a profit before tax of Rs 48.01 crore for Q1 FY25, reversing a loss before tax of Rs 63.49 crore in Q1FY24. 

Consolidated earnings before interest, tax, depreciation and amortisation (Ebitda) also saw a significant increase, reaching Rs 157 crore in Q1FY25, up from Rs 35 crore in the same quarter last year.

Inox Wind specialises in the manufacture and sale of wind turbine generators (WTGs). It also offers comprehensive services, including erection, procurement, and commissioning (EPC), operations and maintenance (O&M), as well as wind farm development and common infrastructure facilities for WTGs.

 

“We have commenced FY25 on a very strong note. With our manufacturing capacities and supply chain already in place, and backed by our large diversified order book of over 2.9 giga watts (GW), we are looking at a massive scale up in operations. We are receiving a very strong response from customers for our products. We have already won 611 mega watts (MWs) of orders in FY25, including repeat orders from marquee customers,” said Kailash Tarachandani, CEO of Inox Wind.

The management expects higher order execution from FY25 onwards, with a guidance of 800 MW and 1,200 MW for FY25 and FY26E, respectively, and a target of 2 GW of annual execution in the medium term. 

“It has the capability and supply chain readiness to execute higher MWs. The annual capex guidance for FY25/26 remains unchanged at Rs 50-75 crore, and the full-year working capital is at 90 days,” analysts at Axis Securities wrote in a note. 

The brokerage valued the stock at 30 times its FY26 earning per share and adjusted for promoter’s fund infusion and minority interest. Axis Securities gave a ‘Buy” call on the stock with a target price of Rs 205 per share.

Those at Nuvama Institutional Equities also remained positive on the heavy electrical equipment company, saying that turned net interest bearing-debt free following the latest infusion by promoters, which is a testament to the balance sheet clean-up undertaken. 

“INXW remains a key player in the C&I segment (85 per cent of OB) and benefits from a duopolistic market in wind EPC. Robust OI at 611 MW led to an OB of 2.9GW (execution over 24 months); it lends revenue visibility. We remain positive on the sector and tweak FY25–27E; inching up margins and accounting for lower realisation/MW, yielding a target price of Rs 201 at 30x FY27 earnings; ‘Buy’,” Subhadip Mitra, Vikram Datwani, and Vijay Bhasin of Nuvama wrote in a report. 

At 01:57 PM; the stock price of the company was trading 17.11 per cent higher at Rs 204 per share on the BSE. By comparison the BSE Sensex surged by 0.27 per cent at 79,918 levels.