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ICICI Securities Report
Stocks to Buy: We maintain Buy on the stock with an SoTP-based target price of Rs 245/share, valuing the wind business at 35 times FY26E EPS.
Inox Wind Ltd. is benefitting from the improvement in industry prospects. Due to industry slowdown and low execution, Inox Wind saw a substantial spike in debt from FY17-FY23. The company has been deleveraging and its net debt reduced to ~Rs 6.5 billion by end-FY24.
In addition, the industry is looking up and a revival led by a slew of policy actions is in the offing along with strong bidding activity for RE projects with wind component of 10–12 GW in FY24.
Inox Wind has witnessed a sharp improvement in order inflow (at 2.3 GW in FY24). This inflow was largely driven by 1,500 MW of order from CESC, which may be executed over the next three–four years. This has improved execution growth visibility over the next three–four years and should substantially improve execution growth over the next one–two years.
Key risks:
Slowdown in order inflow; and
slowdown in RE project bidding.
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