Inox Wind: Hoping for a comeback, will it work?

26 Sep 2023 , 12:32 PM

• Inox Wind (INOX) is part of the US$5bn INOXGFL group promoted by the Jain family. It is engaged in manufacturing and commissioning of wind turbine generators (WTGs). Through its 61% subsidiary Inox Green, it offers O&M services to 3.2GW WTG installations across India.
• Due to a change in govt. policy (feed-in-tariffs to reverse auction), WTG installations in India suffered through FY18-23. Since July’22, govt. has done away with the onerous policy, which as per INOX, should benefit the industry to add 4-5GW capacity p.a. from FY24/25.
• During the lean industry patch, INOX sustained operations due to financial support from promoters and group entities. It focussed on reining costs, improving efficiency, and enhancing product portfolio. It soon plans to launch 3MW turbines that are 30-35% more efficient vs 2MW turbines, in terms of PLF and lower the LCOE substantially. Turnaround in the industry, clubbed with the launch of new series of machines + O&M services, make INOX upbeat on fast outpacing the industry. It plans to execute 500MW in FY24 and higher going forward.
• Its revenue model is asset light (manufactures towers + blades, and assembles nacelles), for which INOX sees Ebitda breakeven at 100MW vs existing order book of 1.3GW. Analysts of IIFL Capital Services keenly monitor how INOX executes and rebuilds its order book, manages working capital, and pares down debt (Rs27bn) and remains an interesting play.