Inox Wind Limited
Q1 FY26
Call date · September 01, 2025
1 · Management Commentary
Key Positives
- Successful rights issue oversubscribed 2.13x; promoters fully subscribed (INR 560 crores).
- Balance sheet strengthened; NCRPS eliminated post-merger and rights issue.
- Strong Q1 FY26 results: Revenue up 32% YoY to INR 863 crores, EBITDA up 39% YoY to INR 220 crores, PAT up 134% YoY to INR 97 crores.
- Executed 146 MW in Q1; diversified order book of 3.1 GW with marquee clients.
- Operationalization of new 1200 MW nacelle and hub plant near Ahmedabad, transformer facility, and deployment of own cranes.
- Margin guidance raised to 18–19% for FY26 (from 17–18%).
- Inox Green: Q1 income up 79% YoY to INR 98 crores, EBITDA up 61% YoY to INR 48 crores, PAT up 4.4x YoY to INR 22 crores; O&M portfolio at ~5.1 GW.
- Strategic move into solar O&M; added 1.6 GWp solar O&M contracts.
Key Negatives
- Q1 execution up only 4% YoY (146 MW vs 140 MW); management attributes to focus on complete sets and working capital efficiency.
- Receivables and inventory days remain high; net working capital days maintained at ~120.
Forward Guidance
- Capex: Expanding blade manufacturing with new facility in South India; ongoing investments in manufacturing and infra.
- New products/segments: Solar O&M scaling; backward integration in transformer manufacturing.
- Client wins/losses: Targeting both PSU and private IPPs; repeat and new marquee clients.
- Revenue/margin outlook: FY26 execution guidance of 1.2 GW; margin guidance raised to 18–19%.
- Strategic initiatives: Demerger of substation business from Inox Green into Inox Renewable Solutions (NCLT approval expected in 2–3 quarters); targeting O&M portfolio ramp-up from 5 GW to 17 GW in two years (wind majority).
- Industry: Positive regulatory tailwinds (ALMM for wind, CERC hybridization amendment, potential GST rate cut); strong sector outlook.
2 · Q&A Highlights
Q 1 (Composite): What is the status and rationale of demergers and potential listing of subsidiaries (Inox Green, Inox Renewable Solutions)?
A (Management):
• Demerger of substation business from Inox Green into Inox Renewable Solutions underway; NCLT process started, expected completion in 2–3 quarters.
• No current plans to demerge Inox Green or Inox Renewable Solutions to IWL shareholders; both remain integral to Inox Wind.
Q 2 (Composite): Q1 execution was up only 4% YoY; is full-year guidance of 1.2 GW still achievable?
A (Management):
• Q1 is seasonally weak (H1 typically 30–35% of annual execution); focus was on completing incomplete sets and improving working capital efficiency.
• Confident of achieving 1.2 GW FY26 guidance; ramp-up expected in H2.
Q 3 (Composite): Margin improvement in Q1—drivers and sustainability?
A (Management):
• Margin guidance raised to 18–19% for FY26, up from 17–18%; driven by operational efficiencies, new facilities, and product mix.
• If performance exceeds guidance, further upside possible.
Q 4 (Composite): Order book and inflow outlook; are there risks of opportunity loss due to being “sold out” for 2 years?
A (Management):
• Current order book at 3.1–3.2 GW, covering two years; pipeline includes multi-GW bids (PSU, SECI, C&I).
• Strategy is to maintain diversified client base and continue adding new marquee customers; not concerned about opportunity loss.
Q 5 (Composite): O&M business growth, solar O&M realizations/margins, and portfolio ramp-up plans?
A (Management):
• Wind O&M realization: INR 8–10 lakh/MW, margins 45–50%.
• Solar O&M realization: ~INR 2 lakh/MW, margins ~20%.
• O&M portfolio to scale from 5 GW to 17 GW in two years, majority wind; both organic and inorganic growth targeted.
Q 6 (Composite): Working capital, receivables/inventory days, and net working capital guidance?
A (Management):
• Net working capital days maintained at ~120; expected to decline as execution scales and payment terms are met.
Q 7 (Composite): Impact of recent CERC amendment (hybridization of transmission infra) and regulatory changes (ALMM, GST)?
A (Management):
• CERC amendment allows hybridization of existing infra (>50 MW), unlocking ~10 GW plug-and-play capacity for the group; expected to expedite execution and benefit all group companies.
• ALMM for wind and DCR positive for domestic manufacturers; GST rate cut (if implemented) would lower capex and boost sector investments.
Q 8 (Composite): Turnkey vs equipment supply mix—will increased equipment supply invite new EPC competition?
A (Management):
• Not reducing turnkey focus; expanding equipment supply to capture sector growth.
• Turnkey remains a core strength; new entrants face high barriers (technology, supply chain, capital).
3 · Other Key Numbers
- Inox Wind Q1 FY26 revenue: INR 863 crores (up 32% YoY)
- EBITDA: INR 220 crores (up 39% YoY)
- PAT: INR 97 crores (up 134% YoY)
- Cash profit: INR 186 crores (up 168% YoY)
- Q1 execution: 146 MW (vs 140 MW YoY)
- Order book: 3.1 GW
- New nacelle/hub plant capacity: 1200 MW
- Inox Green Q1 FY26 income: INR 98 crores (up 79% YoY)
- Inox Green EBITDA: INR 48 crores (up 61% YoY)
- Inox Green PAT: INR 22 crores (up 4.4x YoY)
- Inox Green cash PAT: INR 44 crores (up 140% YoY)
- Inox Green EBITDA margin: ~49%
- Machine availability (Inox Green): 95.6%
- Inox Green O&M portfolio: ~5.1 GW (including 1.6 GWp solar O&M added in April–May 2025)
- Agreement signed for 182 MW wind O&M with large conglomerate
- Planned O&M portfolio ramp-up: 5 GW → 17 GW in 2 years
- Substation business gross block to be demerged: INR 1,000 crores; annual depreciation eliminated: INR 50–55 crores
- Rights issue oversubscription: 2.13x; promoter subscription: INR 560 crores
- Inox Renewable Solutions fundraise: INR 175 crores at INR 7,400 crores valuation
- Net working capital days guidance: ~120 days
- Wind O&M realization: INR 8–10 lakh/MW; margin 45–50%
- Solar O&M realization: INR 2 lakh/MW; margin ~20%
- Industry wind capacity addition target: 5–6 GW in FY26, rising to 8–10 GW by 2030
- Group O&M portfolio (current): ~6 GW wind (including 2 GW via special situation fund), ~1.7 GW solar
- Execution guidance: 1.2 GW for FY26, 2 GW for FY27
- Margin guidance: 18–19% EBITDA for FY26 (up from 17–18%)
- Demerger NCLT approval expected: 2–3 quarters
- Plug-and-play infra unlocked by CERC amendment: ~10 GW