Target: ₹212
CMP: ₹169.25
The change in structure of RE projects to hybrid with integration of solar, wind and storage to maintain grid stability is giving much-needed push to wind energy. Inox Wind Ltd (IWL) is an integrated wind energy player offering manufacturing of wind turbine generators (IWL) and EPC (Inox Renewable Sol) to O&M (Inox Green Energy Ser). Today, wind is seen as a key enabler for RE-RTC (RE– round the clock) power in future because of its seasonal, spatial and diurnal complementarities with solar power.
Hence, Discoms increasingly prefer more dispatchable power (hybrid projects), which is compatible with their demand profile.
With a manufacturing capacity/order book of 2.5GW/3.3 GW, group is turning itself into a total green energy solution provider by expanding its footprints as an RE-IPP and setting up a solar value chain.
Along with its growing O&M fleet, we expect execution of wind projects by IWL to accelerate from 376 MW in FY24 to 720 MW/1,800 MW in FY25/FY27, which will result in Revenue/EBITDA CAGR of 77/84 per cent during FY24-27.
We initiate coverage on the stock with a Buy rating and an SOTP-based TP of ₹212 implying 24x P/E on FY27E.
Delay in signing of PPAs and execution of projects, competition from Chinese players and concerns on\service quality remain key risks.