Inox Wind stock surges nearly 20% on best-ever Q1 earnings

Shares of Inox Wind, a fully integrated wind energy solutions provider, surged 19.6% to reach a new record high of ₹209 per share today following the company's stellar June quarter results.

On Friday, the company reported a net profit of ₹50 crore for the June quarter (Q1FY25), a significant turnaround from the ₹65 crore net loss reported in the same period of the previous financial year. 

Total revenue for the quarter soared by 85% to ₹651 crore, compared to ₹352 crore in the previous year. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margins jumped by 1200 basis points on YoY basis to 21%. This stellar performance was the best Q1 financial performance in Inox Wind’s history, according to the company's earnings filing. 

Largest ever order book

The company’s order book is at its highest level ever, totaling 2.9 GW as of June 30, 2024, with projects scheduled for completion over the next 2.5 years. This order book includes a diverse range of customers, including public sector undertakings (PSUs), independent power producers (IPPs), and the commercial and industrial (C&I) market, with a healthy mix of turnkey projects and equipment supplies.

The company said it has received a strong response from customers. It has already won 611 MW of orders in FY25, including repeat orders from marquee customers. Further, active discussions across multiple IPPs, PSUs, and C&I customers provides it a large order inflow visibility.

The company has increased its manufacturing capacity for 3 MW wind turbines, transitioning from the previous 2 MW models, and has secured a license for a new 4.X MW wind turbine platform. This new turbine, designed for low-wind sites with a larger rotor diameter, is expected to be a game-changer in India.

Recent promoter investments of ₹900 crore have made the company's net cash positive, significantly reducing interest payments and boosting profitability.

Integrated approach

The company is a fully integrated wind energy player, providing comprehensive end-to-end solutions from conception to commissioning and ongoing operations and maintenance (O&M). With a strong operational track record spanning approximately 13 years and a manufacturing capacity exceeding 2.5 GW across four facilities, it stands out among the select few wind OEMs in India offering plug-and-play turnkey solutions and post-commissioning O&M services.

The company's product portfolio includes 2MW and 3MW wind turbine generators (WTGs) currently in production, with a license secured for 4MW WTGs.

It boasts a robust order book of around 2.9 GW, supported by a substantial pipeline of upcoming orders. Additionally, its subsidiary, Inox Green, is one of India's leading wind O&M service providers, with a portfolio of 3.35 GW.

'Well-Positioned'

The company is well-positioned to capture a significant market share in India's rapidly growing wind sector. According to the National Electricity Plan, India is set to add 80 GW of wind capacity over the next eight years, creating a substantial visibility of over ₹6 trillion for wind OEMs and offering a large multi-year opportunity for O&M service providers.

Wind power remains one of the most cost-effective sources of electricity, competitively priced against Indian solar power and significantly lower than the average power purchase cost (APPC). Recent auction tariffs for wind-solar hybrid projects have ranged from ₹3.4–3.5 per unit, while plain wind projects have seen rates of ₹2.68–3.6 per unit.

The growing demand from commercial and industrial (C&I) players for renewable energy, driven by its environmental benefits and favorable price differences compared to grid-based or merchant power, further supports the sector's growth.

Additionally, the draft proposal by NITI Aayog for domestic content requirements in wind turbines could lead to increased consolidation among suppliers in the domestic market. Furthermore, India's ambitious green hydrogen targets of 5 million metric tons per year will necessitate an additional 125 GW of renewable energy capacity, encompassing both solar and wind power.

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