Inox Wind Share Price Target at Rs 170: ICICI Securities
ICICI Securities has reiterated its BUY recommendation for Inox Wind, a stalwart of India’s wind energy segment and a strong competitor for Suzlon Energy. Backed by robust year-on-year financial improvement, strategic business restructuring, and favorable sector dynamics, the research house projects a substantial upside, pegging a revised target price of Rs170 per share. Investors should note a marked downgrade from the prior Rs230 price target, attributed to slower-than-expected order inflow and adjusted execution forecasts for the financial year ending March 2027. Despite the muted execution in the recent quarter, the stock remains poised to capitalize on the anticipated renewable energy revival, disciplined deleveraging, and margin enhancement initiatives.
Financial Performance Surges on Strong Realizations
Inox Wind delivered standout revenue growth, surging 30% year-on-year for Q1FY26, underscoring its operational resilience in the face of a challenging industry landscape. The execution numbers climbed a restrained 4% YoY, but realisations advanced an impressive 24%, lifting overall income. EBITDA margins for the quarter registered at 23.5%, a notable improvement of 220 basis points YoY, as the company commissioned a nacelle plant near Ahmedabad. Total revenue clocked at Rs8.2 billion, while EBITDA soared 43% YoY to Rs1.9 billion. Profits doubled from last year, hitting Rs1 billion as other income tripled and interest expenses declined by 24%.
Order Book Robust, but Fresh Inflows Disappoint
With a healthy order book of 3.1GW—up 7% year-on-year—Inox Wind maintains a book-to-bill ratio of 4.5x, providing visibility for growth until FY27. Nevertheless, order inflow in Q1FY26 arrived at a modest 51MW, well below expectations and raising questions about the pipeline’s sustainability. The company received its largest order in recent history, 1,500MW from CESC, enhancing visibility for execution and growth over the next 3–4 years.
Strategic Restructuring: Positioning for Future Synergies
Inox Wind is actively consolidating and streamlining its corporate structure to fortify its financial profile and operational focus. The merger with Inox Wind Energy has resulted in a liability reduction of Rs20 billion. Additionally, plans to transfer the substation business from Inox Green Energy to Inox Renewables Solutions (IRS), and subsequently demerge and list IRS, are underway. These steps are expected to bolster capital allocation and unlock intrinsic value for stakeholders.
Earnings Estimates Revised Down Amid Lower Execution Outlook
Market conditions necessitated a downward revision in FY27E execution targets, now at 1.5GW compared to 1.7GW previously, reflecting muted order inflows and sectoral headwinds. Consequently, revenue, EBITDA, and EPS projections for FY27E have been reduced by 16%, 18%, and 19%, respectively. The latest target price stands at Rs170, applying a 30x earnings multiple to the wind business, in alignment with the current market sentiment and anticipated earnings trajectory.
Quarterly Financial Snapshot: Sustained Margin Expansion
Recent quarters accentuate Inox Wind’s adaptability, with margins, EBITDA and profit figures showing a promising trend despite fluctuations in order inflow and execution.
| Quarter | Total Revenue (Rs mn) | EBITDA Margin (%) | EPS (Rs) | Execution (MW) | Order Inflow (MW) | Order Book (MW) |
|---|---|---|---|---|---|---|
| Q1FY25 | 6,388 | 21.3 | 2.8 | 140 | 611 | 2,917 |
| Q2FY25 | 7,322 | 23.1 | 2.8 | 140 | 589 | 3,328 |
| Q3FY25 | 9,112 | 23.8 | 3.9 | 189 | 200 | 3,286 |
| Q4FY25 | 12,748 | 19.9 | 5.8 | 236 | 100 | 3,203 |
| Q1FY26 | 8,262 | 23.5 | 0.6 | 146 | 51 | 3,108 |
Balance Sheet: Deleveraging Pays Off
After a period of industry-induced debt accumulation, Inox Wind is executing a decisive deleveraging strategy, reducing net debt to approximately Rs0.2 billion by the end of FY25. Improved cash flows and prudent financial management underpin the company’s enhanced capital structure and liquidity position. Free cash flow is projected to rebound sharply in FY26E after two years of negative flows.
Valuation Highlights: Room for Re-rating on Execution and Margins
At Rs137 CMP, ICICI Securities estimates Inox Wind trades at compelling valuation multiples—22.6x FY27E earnings and 13.8x EV/EBITDA, suggesting material upside potential underpinned by profitable growth and market recovery. The SoTP methodology assigns Rs159 per share for the wind business and Rs11 for its stake in Inox Green, leading to the new Rs170 target. The sustainability of margins and revitalization of order inflows will be the key re-rating catalysts.
Shareholding Patterns Indicate Changing Institutional Interest
Promoter holding decreased in recent quarters, while institutional investor and public stakes shifted, reflecting evolving perceptions and capital allocation strategies among market participants. As of June 2025, promoters own 44.2%, institutional investors 22.8%, mutual funds and others 7%, and FIIs 13.8%. Public ownership increased to 33%.
Key Risks to Investment Thesis
Principal risks include further slowing of order inflows, tepid renewable energy bidding activity, and persistent receivables days—currently at a stretched 270. Execution misses and margin compression would pose additional headwinds.
Bottomline
Inox Wind’s journey from debt-laden challenges to margin-led resurgence is emblematic of both its management’s resolve and emerging sector opportunities. Despite order inflow disappointments and a recalibrated forecast, ICICI Securities makes a compelling case for investors to BUY, banking on a Rs170 target over a 12-month horizon driven by capital discipline, strategic restructuring and anticipated renewable energy momentum.
