INOXWIND - Inox Wind Limited Share Price

Management Outlook and Key Points:

Outlook:

• Growth & Execution: Management is confident in achieving FY25 guidance of 800 MW execution, with acceleration expected from Q4 FY25. FY26 guidance remains 1.2+ GW, supported by a 3.3 GW order book.
• Margins: FY25 EBITDA margin guidance maintained at 17%+, with potential upgrades. Initiatives (nacelle manufacturing, crane/transformer in-sourcing) could add 100"“200 bps margin improvement in FY26.
• Solar Synergy: Inox Solar's entry enables hybrid project bids, opening new revenue streams for EPC (Inox Renewable) and O&M (Inox Green).

Major Highlights:

1. Operational Progress:

   • Q3 FY25 execution: 189 MW (total 469 MW in 9M FY25).
   • Nacelle manufacturing, cranes, and transformer lines to be operational in Q4 FY25.
   • 200 MW turbines ready for commissioning (delays due to approvals).

2. Order Book & Demand:

   • 3.3 GW order book (25"“30% equipment supply, balance EPC).
   • Strong tender pipeline: 15.5 GW awarded in FY25 (hybrid/RTC/FDRE dominate). C&I demand seen at 3"“4 GW/year.

3. Macro Environment:

   • Tariffs: ~INR 3.2"“3.3/unit for hybrid, INR 4.25"“4.56/unit for FDRE.
   • Hybrid/RTC projects driving sector growth; battery storage costs declining but remain high.

4. Strategic Initiatives:

   • Demerger of Inox Green's substation business on track (6"“9 months).
   • Backward integration (cranes, transformers) to reduce costs and boost margins.
   • 4 MW turbine commercialization targeted for H2 FY26.

Challenges: Land/evacuation delays persist but are manageable. Focus remains on selective, profitable orders with financially strong clients.

Question 1: Vishal Singh (Finvestors)
Are you still guiding for 800 MW for this fiscal year, and what about EBITDA margins?
Answer: Inox Wind maintains FY25 guidance of 800 MW execution and 17% EBITDA margins, with potential upgrades. Demerger of the substation business is on track, awaiting regulatory approvals.

Question 2: Aniket Nikumb (ABN Capital)
Have margin initiatives started impacting results, and how are order book dynamics managed?
Answer: Margin initiatives (cranes, nacelle/transformer manufacturing) will reflect from Q4. The 3.3 GW order book covers ~2 years; new bids and negotiations are ongoing for incremental orders.

Question 3: Praharsh (Arjav Partners)
Who are international competitors, and will U.S. exiting the Paris Accord impact India's renewables?
Answer: Competitors include Chinese players and MNCs, but Inox's turnkey advantage and India's focus on hybrids mitigate risks. No immediate impact from U.S. policy changes.

Question 4: Pradyumna Choudhary (JM Financial)
Is FY26 guidance still 1,200 MW, and what's the demerger timeline?
Answer: FY26 guidance of 1,200+ MW remains. Demerger approvals from exchanges expected in weeks, with NCLT process likely concluding in 6"“9 months.

Question 5: Ketan Jain (Avendus Spark)
What is India's annual wind market size, and C&I segment contribution?
Answer: Government targets 10 GW annual wind tenders; C&I demand is 3"“4 GW/year. Market share isn't segmented; focus is on diversified orders across PSUs, C&I, and IPPs.

Question 6: Shweta Dikshit (Systematix Group)
Breakdown of Rs.70 Cr other income, margin outlook, and realization trends?
Answer: Other income includes Rs.70 Cr ECL reversals from improved business. FY25 EBITDA guidance remains 17%+. Realization (Rs.4.5-4.6 Cr/MW) will rise with EPC revenue in Q4.

Question 7: Akash Mehta (Canara HSB Life)
Will falling battery prices affect wind demand?
Answer: Hybrid projects (wind+solar+storage) will grow, but battery costs remain high. Wind's evening generation complements solar, ensuring sustained demand.

Question 8: Nikhil Abhyankar (UTI MF)
Execution vs. supply gap and order book split?
Answer: ~200 MW is ready for commissioning, with typical 1-2 quarter lag. Order book: 25-30% equipment sales, balance EPC.

Question 9: Hansal Thacker (Lalkar Securities)
Deferred tax impact due to carry-forward losses?
Answer: Deferred tax charge is a one-time adjustment from shifting to the new tax regime; non-cash and unrelated to operations.

Question 10: Prit Nagersheth (Wealth Finvisor)
Why lower external order wins despite high tendering?
Answer: Order book (3.3 GW) focuses on credible, executable projects over long-term MOUs. Group orders (captive renewables) are prioritized but market-priced.

Question 11: Rohan Vora (Envision Capital)
How do plug-and-play projects aid execution, and will Q4 margins dip?
Answer: Pre-developed projects reduce execution risks. FY25 EBITDA margins will exceed 17%; quarterly fluctuations (EPC mix) won't affect full-year guidance.

Question 12: Nikhil (Kizuna Wealth)
What are on-ground execution challenges?
Answer: Typical hurdles (land/evacuation) persist but are manageable. Execution improved with regulatory easing and infrastructure investments.

Question 13: Kapil Malhotra (Individual Investor)
Status of Inox Wind-IWEL merger?
Answer: Awaiting final NCLT hearing (Feb 2025). All approvals secured; delays are procedural. Expected completion by March-April 2025.

Question 14: Vimox Shah (GoyamLabdhi Fintech)
Revenue impact from crane/transformer ventures?
Answer: Backward integration (cranes/transformers) boosts margins and cash flows, not revenue. Focus remains on cost optimization and execution efficiency.

Question 15: Prateek Giri (Subh Labh Research)
Update on 4 MW turbines and order selectivity?
Answer: 4 MW turbines (commercial production by H2 FY26) will enhance profitability. Order strategy prioritizes financially strong clients and diversified portfolios (equipment vs. turnkey).