Company background: Inox Wind Ltd (IWL), incorporated in 2009 and a part of the Inox Group, is one of the leading manufacturers of wind turbine generators (WTG’s) in India. The company also provides turnkey solutions, and operation and maintenance services for wind power projects. Currently, IWL has an installed capacity of 550 nacelles and hubs, 256 rotor blade sets and a capacity of 150 towers. The company is setting up a new integrated capacity which would take the total nacelles and hubs capacity to 950 units, rotor blades capacity to 800 sets and tower capacity to 600 units.
Strong order book: IWL has shown a strong growth during FY2014 and 9MFY2015 periods, wherein it sold 330MW and 380MW of WTGs during the period; plus, it also has a strong order book (as of December 2014). Currently IWL has an order book of 1,136MW, as against Suzlon’s order book
of 1,148MW, and Gamesa India Pvt Ltd’s order inflow of 850MW (as of
December 2014). These provide strong revenue visibility for FY2016.
IWL has access to wind project sites which have been acquired or are under the acquisition process by its group companies – GFL and IRL – and its subsidiary IWISL. Currently the wind sites acquired have an aggregate power project capacity of 2,130MW, while the wind sites which are under the acquisition process have a power project capacity of 1,922MW. Thus, it provides healthy revenue visibility for IWL in the medium term.
Government focus on renewable energy: The government has set a target of installed wind power capacity of 60,000MW till FY2022 from the current capacity of 21,150MW. This will create a huge opportunity for the company in the upcoming period. Hence we expect order inflow to increase at a faster pace during the next few years. We expect industry order flow to come in at the run rate of 5,000-6,000MW per annum as against the current run rate of 2,000MW per annum. The government has provided various incentives and framed several rules and regulations to increase demand for renewable energy.
Outlook and Valuation: On EV/sales, the company is valued at 3.3x (at the upper end of the price band) on the basis of 9MFY2015 annualized numbers. Looking at the strong order book of the company and government focus on the sector, we recommend a Subscribe on the issue.

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