What’s Fueling Inox Wind Share Price Growth?

Inox Wind share price has surged by 48% over the past year, significantly outperforming the market’s 8.6% return. 

Understanding Inox Wind’s Business

Inox Wind, part of the INOXGFL Group with a history of over 9 decades, focuses on chemicals and renewable energy. With 13 years of experience in the wind energy sector, the company provides end-to-end solutions, including equipment supply and operations and maintenance (O&M) for wind projects.

Inox Wind has a manufacturing capacity of over 2.5GW across four plants in Gujarat, Madhya Pradesh, and Himachal Pradesh. Its product lineup includes 2MW and 3MW Wind Turbine Generators (WTGs), and the company holds a license for 4MW WTGs as well. Currently, Inox Wind has a strong order book of over 3.3GW and a large pipeline of future orders.

The company operates two subsidiaries:

• Inox Green Energy Services Ltd. – The only listed wind O&M services company in India.
• Resco Global Wind Services Pvt. Ltd. – Provides EPC services for wind projects.

Inox Wind’s Growth in FY25 and FY26

For FY25, Inox Wind is targeting the execution of nearly 800MW, marking a 113% growth over FY24. This is supported by a robust order pipeline. For FY26, the execution target is over 1,200MW, a 50% increase from FY25, with further growth expected as the company launches its 4MW WTG platform.

Financial Performance

In Q3 FY25, Inox Wind reported a revenue of ₹994 crores, a 96% increase from Q3 FY24. Net profit for Q3 FY25 stood at ₹111.6 crores. Over the last 3 years, the company has reported a compounded sales growth of 35% and a profit growth of 24%.

The National Electricity Plan indicates an addition of 80GW of wind capacity over the next 8 years, creating a market worth ₹6 lakh crores for wind Original Equipment Manufacturers (OEMs) and O&M service providers.

Return on Capital Employed (ROCE)

Inox Wind’s ROCE improved to 4% in March 2024, up from -7% in March 2023, reflecting better operational efficiency. However, compared to its peers:

• Suzlon Energy: ROCE of 25% in March 2024.
• Adani Green Energy: ROCE of 10% in March 2024.

Though improving, Inox Wind’s return on equity (ROE) has been negative over the last 10 years, standing at -28% over the last 3 years.

Valuation and Shareholding

Inox Wind is currently trading at 8.6x its book value of ₹20.5, which is lower than peers:

• Suzlon Energy: Trading at 18.3x its book value.
• Adani Green Energy: Trading at 15.5x its book value.

As of December 2024, Inox Wind’s promoters hold 48.3% of the company, while foreign institutional investors (FIIs) have increased their stake to 15.3%.

Conclusion

Inox Wind has shown strong growth recently, and its future looks promising based on its strong order book, execution targets, and the increasing demand for wind energy. However, execution speed and project completion will be crucial in determining how much the company can grow in the coming years.

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