Inox Wind: Spinning Profits or Hot Air?

Inox Wind: Spinning Profits or Hot Air?

At a Glance
Inox Wind Energy has morphed from perennial losses to a ₹425 Cr profit in FY25, riding a 5-year sales CAGR of 81%. Debt down by ₹578 Cr, merger shuffle with Inox Wind Ltd, and valuations at 86× trailing EPS raise eyebrows. KMP include Bhavesh Ganatra (CEO) and Debashish Roy (CFO).


1. Introduction with Hook

  • Five years ago, Inox Wind Energy (IWEL) was bleeding cash like a leaky turbine.
  • Today? It’s posting profits and commanding a P/E of 86.7× – more dizzying than its blades.
  • Is this a genuine turnaround or just market hype blowing in the wind? Let’s dissect.

2. Business Model (WTF Do They Even Do?)

  • Wind farm EPC: Design, procurement, erection, and commissioning of on-shore wind farms.
  • Turbine Manufacturing: In-house production of blades, towers, nacelles under INOXGFL Group.
  • After-sales Services: Operations & maintenance (O&M) contracts, spares supply.
  • Strategic Stake: Post-merger, IWEL merges into Inox Wind Ltd to consolidate manufacturing, EPC, and O&M.

3. Financials Overview – Profit, Margins, ROE, Growth

MetricFY21FY22FY23FY24FY25
Sales (₹ Cr)7165987301,7463,557
Net Profit (₹ Cr)–331–332–706–91425
OPM (%)–33%–62%–41%15%21%
ROE (%)–156%–109%–331%–56%116%
  • Sales Growth: From ₹716 Cr in FY21 to ₹3,557 Cr in FY25 – a torrid 4× surge (5-year CAGR ≈ 81%).
  • Profit Turnaround: FY23’s –₹706 Cr loss flipped to +₹425 Cr in FY25.
  • Margins: Operating margin swung from –41% in FY23 to a healthy 21% in FY25.
  • ROE Swing: Negative ROEs gave way to an eye-watering 116% in FY25 (thanks to a small equity base).

4. Valuation – Is It Cheap, Meh, or Crack?

  • Current P/E: 86.7× trailing EPS of ₹55.88 (Q1 TTM).
  • Price/BV: 4.06× book value of ₹2,537.
  • Fair Value Range:
    • Assuming a conservative P/E of 20–25× FY25E EPS (~₹116.30), fair value lies at ₹2,326–₹2,907 per share.
    • At the current ₹10,293, the stock trades at 4× this upper band – talk about wind in its sails.
  • Rationale Transparency:
    • Industrial peers average P/E ≈ 59× median ; renewable peers average lower.
    • Extraordinary one-offs (merger benefits, tax credits) may have inflated FY25 earnings.

5. What’s Cooking – News, Triggers, Drama

  • Scheme of Arrangement: Effective 13 June 2025, IWEL merges into Inox Wind Ltd at 632:10 share ratio, cutting liabilities by ₹2,050 Cr .
  • Debt Reduction: Borrowings down from ₹2,078 Cr (FY24) to ₹1,500 Cr (FY25).
  • Order Book: New EPC orders from developers in Tamil Nadu and Gujarat could add ₹1,500 Cr over FY26–27.
  • Government Push: Accelerated Growth Incentive Scheme for wind projects may boost margins 200–300 bps next two years.

6. Balance Sheet – How Much Debt, How Many Dreams?

  • Total Liabilities: ₹8,795 Cr in FY25 vs. ₹6,886 Cr in FY24 (merger goodwill inflates total).
  • Borrowings: ₹1,500 Cr (down ₹578 Cr YoY).
  • Reserves: Swelled to ₹3,032 Cr from ₹1,840 Cr.
  • Fixed Assets: ₹2,291 Cr (capex on new blade-making line).
  • Net Debt/Equity: ~0.49× post-merger – manageable for a capital-intensive EPC outfit.

7. Cash Flow – Sab Number Game Hai

  • Operating Cash Flow: +₹138 Cr in FY25 vs. –₹367 Cr in FY24.
  • Investing Cash Flow: –₹406 Cr (capex for 1.5 GW blade capacity).
  • Financing Cash Flow: +₹277 Cr (primarily net debt repayments and merger restructuring).
  • Net Cash: +₹9 Cr – from near zero to positive.

8. Ratios – Sexy or Stressy?

RatioFY23FY24FY25
Debtor Days414238276
Inventory Days238
Payable Days188
Cash Conversion Cycle414238326
ROCE (%)–9%4%11%
  • Debtor Days: Flickering around 276 days – working capital hog alert.
  • Cash Cycle: 326 days – tightrope walking between receivables and payables.
  • ROCE Jump: From negative in FY23 to 11% in FY25 – respectable for an EPC provider.

9. P&L Breakdown – Show Me the Money

  • Revenue Mix FY25:
    • EPC Services: 65%
    • Turbine Sales: 25%
    • O&M & Spares: 10%
  • Cost Structure:
    • Raw Materials & Purchased Components: ~70% of sales.
    • Employee Expenses: 8%.
    • Other Overheads: 15%.

10. Peer Comparison – Who Else in the Game?

CompanyCMP (₹)P/EMar Cap (₹ Cr)ROCE (%)
Suzlon Energy65.9243.289,57632.4
ABB India5,756.564.6122,03038.7
BHEL258.7168.890,0984.5
Inox Wind Energy10,29386.712,40011.4
  • Takeaway: IWEL’s P/E is top-quartile among peers, yet its market cap is a fraction of ABB or BHEL – a valuation paradox.

11. Miscellaneous – Shareholding, Promoters

  • Promoter Holding: 69.5% (steady since Mar 2024).
  • FIIs: 3.7% (down from 5.2%).
  • DIIs: 2.5% (up from 0.8%).
  • Public Float: ~24.3%.
  • KMP:
    • Bhavesh Ganatra – WTD & CEO
    • Debashish Roy – CFO

12. EduInvesting Verdict™

  • Verdict Tone: Neutral wit, zero buy/sell nudges.
  • Summary: Inox Wind Energy has executed a textbook turnaround in FY25, delivering profit, margin expansion, and debt reduction. However, the stock’s sky-high valuation (86× P/E) and extended working capital cycle warrant caution. The merger shuffle and government incentives provide near-term tailwinds, but long-term growth hinges on order execution and capital discipline.

✍️ Written by Prashant | 📅 July 12, 2025

Leave a Comment

Popular News

error: Content is protected !!
Scroll to Top