Wind energy stock down 34% in 1 yr, but Nuvama says 'Buy' again; here's why

Nuvama on Inox Wind: Brokerage firm Nuvama Institutional Equities has reiterated its ‘Buy’ call on Inox Wind Ltd (IWL) stock with an unchanged target price of ₹190, citing stronger execution visibility, balance sheet improvements, and favorable sector reforms.

 

“We foresee revenue visibility till FY27 backed by a 3.1 GW order book and retain ‘Buy’ with a target price (TP) of ₹190 at 30x FY27E WTG EPS plus DCF of O&M (IGEL),” Nuvama analysts Subhadip Mitra, Vikram Datwani, and Mahir Moondra said in a note dated September 4.

 

On the bourses, however, the Inox Wind stock has remained weak, falling over 34 per cent in the past year and shedding more than 21 per cent in the last three months.

 

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Top reasons behind this move:

Restructuring strengthens business model

 

Nuvama analysts noted that the INOXGFL Group has undergone a meaningful restructuring process, leaving it better positioned as a leaner, more integrated renewable energy platform. 

 

Key changes include the merger of Inox Wind Energy Ltd (IWEL) into the WTG business, a rights issue aimed at deleveraging the balance sheet, and calibrated capacity expansion in wind. Subsidiaries, Inox Green Energy Services (IGESL) and Inox Renewable Solutions (IRSL), have also diversified operations, boosting long-term growth prospects.

Order book and execution guidance

 

Inox Wind’s wind turbine generator (WTG) business stands to benefit from the MNRE’s Approved List of Models and Manufacturers (ALMM) notification, effective July 31, 2025. The policy is expected to reduce import reliance and improve the competitive positioning of domestic players.

 

The company has eliminated preference shares and promoter debt, further strengthening its financials. Execution guidance stands at 1.2 GW in FY26 and 2 GW in FY27, though Nuvama conservatively factors in 1.1 GW and 1.8 GW, respectively. 

 

Margin guidance has been raised to 18-19 per cent, versus 17-18 per cent earlier. The robust 3.1 GW order book offers nearly two years of visibility, diversified across turnkey and equipment-supply contracts. Working capital is set to improve to around 120 days, while the recent GST rate cut on wind equipment from 18 per cent to 5 per cent could lower tariffs and spur demand for domestic OEMs.

Subsidiaries drive diversification

 

Inox Green Energy Services, the O&M arm, has expanded into solar O&M, taking its portfolio to 5.3 GW with a target of 17 GW by FY27. It has also invested in a 2 GW special-situation asset and awaits NCLT approval for transferring its substation business into IRSL. These steps position IGESL as an asset-light player with potential for improved returns.

 

Meanwhile, Inox Renewable Solutions has begun manufacturing transformers, launched crane services, and is preparing to integrate IGESL’s substation business. It recently raised ₹1.75 billion at a ₹74 billion valuation, with a public listing expected in the next few quarters.