Posted on June 2, 2025, by Niftynews
Inox Wind share price received a positive outlook from Nuvama Institutional Equities, which upgraded its target price to ₹236, up from ₹223 earlier. The revision follows the company’s Q4FY25 results, showcasing a strong operational performance and execution pipeline, even as realisations per megawatt dipped.
The report also factors in the recent merger of Inox Wind Energy Ltd (IWEL) with Inox Wind Ltd, which will dilute EPS due to a 25% increase in share count. Yet, the consolidation has strategic benefits, particularly in reducing liabilities and strengthening the balance sheet.
🧾 Q4FY25 Key Financial Highlights
In its March quarter results, Inox Wind reported:
- Commissioned capacity: 236MW (up 83% YoY)
- Revenue: ₹1,270 crore (lower due to reduced realisation per MW)
- Operating Profit Margin (OPM): 19.9%
- EBITDA: In line with estimates, supported by a product-heavy sales mix
- Profit After Tax (PAT): Around ₹190 crore (in line with forecast)
This performance was deemed robust, particularly in an industry where execution delays and margin pressures are common. The lower revenue was offset by superior margins driven by improved efficiency and strategic product deployment.
🏗️ Full-Year FY25 Execution vs Guidance
- Total FY25 execution: 705MW
- Original guidance: 800MW
- Shortfall reason: Slight delays in EPC timelines and lower MW realisations
Despite the shortfall, Inox Wind retained its forward-looking execution guidance, reflecting management’s confidence in the pipeline and execution capabilities.
🔮 FY26 & FY27 Projections
Nuvama Revised Execution Guidance:
| Fiscal Year | Projected Capacity Execution |
|---|---|
| FY26E | 1,200MW |
| FY27E | 2,000MW (revised up from 1.8GW) |
Nuvama noted that while order inflows (OI) remained modest at 153MW in Q4, the total order book now stands at 3.2GW, which offers solid revenue visibility over the next 24 months.
This order book primarily includes wind turbine generators (WTGs) and EPC contracts, placing Inox Wind in a strong position within a duopolistic market landscape dominated by just two players — Inox Wind and Suzlon Energy.
🔍 EPS Dilution from Amalgamation: Strategic Trade-Off?
One of the most significant developments recently is the NCLT-approved amalgamation of Inox Wind Energy Ltd with Inox Wind Ltd. The merger increases the company’s share count by 25%, thereby diluting EPS.
However, this is balanced by significant financial advantages:
✔️ Benefits of the Merger:
- Eliminates liabilities such as NCRPS (Non-convertible redeemable preference shares) worth ₹2,000 crore
- Simplifies the corporate structure
- Strengthens the company’s equity base
- Positions the company for better debt/equity ratios in future fund-raising
“The merger benefits Inox Wind by leading to a reduction of liabilities (NCRPS of ₹2,000 crore), which was previously a negative value in our SoTP,” said Nuvama.
Despite the EPS dilution, the structural gains in balance sheet health and long-term solvency were viewed positively by analysts.
📊 Inox Wind Valuation vs Suzlon Energy
Inox Wind is often benchmarked against its peer Suzlon Energy, given their duopoly in India’s wind EPC and WTG sector.
| Metric | Inox Wind | Suzlon Energy |
|---|---|---|
| FY27E P/E Multiple | 24.4x | 31.8x |
This indicates that Inox Wind remains relatively undervalued compared to Suzlon, presenting a potential value opportunity for long-term investors.
Nuvama applied a 30x multiple on FY27E WTG EPS, along with a discounted cash flow (DCF) valuation on its O&M business, to arrive at the revised target of ₹236.
📈 Market Outlook: What’s Driving Inox Wind Share Price?
Several factors continue to support a positive long-term outlook for Inox Wind share price:
🔹 1. Government Push for Renewables
India’s aggressive targets for clean energy generation, including 500 GW by 2030, put wind energy front and center. Inox Wind, with its established supply chain and EPC expertise, stands to gain from upcoming central and state projects.
🔹 2. Duopolistic Advantage
Operating in a duopolistic market with Suzlon Energy means higher pricing power, lower competitive pressures, and greater project control.
🔹 3. Cost Efficiencies and Margin Gains
The shift to a product-heavy mix in Q4FY25 has helped improve margins. Inox Wind’s focus on operational efficiency is expected to keep margins stable even with moderate realisation dips.
🧠 Analyst Perspective: Is Inox Wind a Buy?
According to Nuvama, Inox Wind continues to be a “Buy” despite:
- The slight FY25 execution shortfall
- EPS dilution from merger
This call is backed by:
- Strong EBITDA margins
- Long-term order book of 3.2GW
- Reasonable valuation (lower than Suzlon)
- Balance sheet improvements post-amalgamation
Risks to Watch:
- Slower-than-expected execution
- Volatility in raw material prices (especially steel and logistics)
- Delays in regulatory or project clearances
- Subdued order inflow if policy tailwinds stall
📝 Final Take: Inox Wind Share Price Set for Long-Term Upside
While the Inox Wind share price may experience short-term consolidation due to merger-related EPS dilution and macro headwinds, the long-term narrative remains strong.
With a visible project pipeline, a restructured financial position, and increasing capacity targets, Inox Wind is poised for continued growth in India’s renewable energy sector.
The revised target of ₹236 by Nuvama offers decent upside from current levels, especially for investors with a medium to long-term horizon.
