Shares of Inox Wind Ltd, a key player in the Indian wind energy sector, experienced a notable decline of 5.6% on Monday, hitting a low of Rs 73.57 apiece. The drop followed the company's announcement of its June quarter (Q1) financial results, which revealed a substantial fall in net profit and missed analyst expectations.
Q1 Profit Plunges, Sales Decline
For the first quarter, Inox Wind reported a net profit of Rs 64.10 crore, marking a 34.2% year-on-year decrease from Rs 97.3 crore in the corresponding period last year. Sales also saw a modest decline, falling 1.5% to Rs 814.10 crore compared to Rs 826.30 crore in the previous year's Q1.
Analysts from MOFSL highlighted significant misses across several key metrics. The brokerage noted that Inox Wind's revenue was 15% below its estimate, and its EBITDA came in 18% lower than anticipated. Adjusted PAT (Profit After Tax) was a considerable 48% below MOFSL's forecast, although the EBITDA margin of 19% was in line with expectations.
Analyst Outlook and Future Growth Trajectory
Following the results, analysts will be closely monitoring Inox Wind's ability to achieve its ambitious FY27 revenue growth guidance of 75% year-on-year, especially given that Q1 contributed only 8% towards this full-year target. The trajectory of new order inflows, particularly from third parties, and the company's execution ramp-up will also be key areas of focus.
MOFSL has set a target price of Rs 92 for Inox Wind's stock, while JM Financial has given an 'Add' rating with a target of Rs 88. These targets reflect a cautious optimism tempered by the recent performance.
Management's Strategy and Restructuring Efforts
Inox Wind's management attributed the moderation in performance to a temporary phase, citing a transition from Engineering, Procurement, and Construction (EPC) to an equipment supply model. They anticipate a recovery starting from the second half of FY27 and maintained their guidance for revenue growth at 70-75% year-on-year and an EBITDA margin of 20-22%.
The company is actively pursuing a corporate restructuring aimed at evolving into a vertically integrated renewable energy ecosystem. This involves optimizing individual business units and leveraging group synergies. Initiatives include launching the IPP platform (INO Neo) for power generation and separating power evacuation from services to bolster the EPC vertical (INOX Renewable Solutions).
Furthermore, Inox Wind is strategically de-risking its supply chain through in-house manufacturing of solar (INOX Solar) and wind (INOX Wind) equipment. The anticipated NCLT approval for the acquisition of Wind World India (4.5GW) is expected to unlock significant synergies, with integration projected to be complete by Q2FY27.