Inox Wind Limited (IWL) has seen its shares surge over 14% in morning trade after the wind turbine maker announced that it has secured a significant 279 MW order from a leading captive and industrial (C&I) segment player.
This latest order win highlights Inox Wind’s growing momentum in India’s flourishing wind energy market.
Overview of the 279 MW Order
IWL will supply, install, and maintain 279 MW of its advanced 3 MW wind turbine generators (WTGs) for the unnamed leading C&I client. The scope of the order is broken down as follows:
- End-to-end EPC for 99 MW capacity: Inox Wind will provide full engineering, procurement, and construction services to set up 99 MW of wind power capacity.
- Limited scope EPC for 180 MW: For the remaining 180 MW, IWL will handle equipment delivery and limited EPC work.
- Multi-year O&M contract: The order includes a long-term operations and maintenance agreement under which Inox Wind will maintain the 279 MW of WTGs post-commissioning.
The wind power project sites are located in the renewable energy hub states of Gujarat and Rajasthan. Inox Wind is expected to complete installation and commissioning of all 279 MW by June 2025.
Major Order Win Highlights Inox Wind’s Strong Market Position
This latest order win holds major significance for several reasons:
- It comes from an established leading C&I segment customer that has already awarded orders for approximately 325 MW of wind power projects to IWL in the past. Landing repeat large-scale orders from renowned customers demonstrates Inox Wind’s execution excellence and ability to foster long-lasting client relationships.
- At 279 MW, this is one of the largest orders bagged by IWL in recent years. It reflects the company’s growing status as a preferred wind energy solutions provider.
- This will expand Inox Wind’s order book and revenue visibility over the coming years as the company scales up executions to meet the mid-2025 project completion deadline.
Key Positive Implications
The major order win is set to deliver some tangible benefits:
- Topline growth – With Inox Wind’s order book position already solid, this 279 MW order will bolster its growth prospects. As execution ramps up, IWL’s sales and profitability are likely to receive a boost.
- Improved economies of scale – The deal will allow Inox Wind to drive better cost efficiencies across procurement, logistics, project execution, and O&M by consolidating its scale.
- Enhanced balance sheet – The order inflow is well-timed to strengthen Inox Wind’s balance sheet. The resulting growth in cash flows can aid the wind OEM to pursue debt reduction.
- Reaffirmation of technology edge – The 3 MW WTG platform continues to gain traction, reaffirming the technological superiority that Inox offers to wind farm owners and operators.
The positive news has come at the right time for Inox Wind investors, driving substantial share price gains as a result. For the company, this heralds a potential acceleration in order momentum.
Financial Overview
Inox Wind stands well-placed to capitalize on the fresh order win and continue its healthy financial run. Some key financial parameters are summarized below:
- Share price (as of December 26, 2023, 9:50 AM) – Rs 475 (up 14.05% on the day)
- Market Capitalization – Rs 15,265 cr
- TTM EPS – Strong uptrend over the years
- P/E – Well below 5-year average recently
- P/B – 8.80x (compares well historically)
- Dividend Yield – Nil
The financial position looks stable for Inox Wind to support its future growth plans. With strong technical capabilities and execution track record, the company looks geared to ride the immense Indian wind energy potential over the long term.
Growth Drivers for Inox Wind
Several underlying tailwinds should facilitate healthy volume and profitability growth for Inox Wind in the coming years:
- India aims to have 140 GW of installed wind energy capacity by 2030. This presents a vast opportunity, with current capacity just over 41 GW.
- Wind power tariffs have plunged below Rs 3 per unit, sparking greater uptake by C&I and utility customers.
- The shift towards higher efficiency, large-scale wind turbines plays to Inox’s strengths given its technologically advanced 3 MW WTG portfolio.
- Supportive policy push towards renewable energy for greening India’s power mix. Over 36% of installed power capacity is currently renewable.
- Inox Wind’s robust order book and execution capabilities positions it well to tap the exponential market growth ahead.
With these growth drivers buttressing its prospects, Inox Wind looks set to scale greater heights in the future. The latest order success represents one more step in that direction.
The Road Ahead for Inox Wind
The 279 MW contract marks the emergence of stronger order inflows for Inox Wind after a relatively muted period over the past 3 years. With its cutting-edge product portfolio and solid track record, Inox Wind now has an opportunity to regain higher market share.
However, competitive intensity in India’s wind energy market remains high. Dominant players such as Siemens Gamesa, Vestas and GE Renewable Energy have strong balance sheets and localization advantages that Inox needs to counter.
Nonetheless, Inox Wind’s technology DNA and loyal customer base point to a promising outlook. Investor sentiment has turned positive as evident in the stock’s 2023 price surge.
If Inox Wind can continue harnessing its capabilities to capitalize on India’s wind energy boom, there is potential for multi-bagger stock returns from current levels. Execution of the latest mega order will be the next key test as the company seeks to reaffirm its industry standing.