INOXWIND - Inox Wind Limited Share Price

The management of Inox Wind Limited provided an optimistic outlook during the Q3 FY '26 earnings conference call, projecting a consolidated revenue of over INR 5,000 crore for FY '26, indicating a growth of over 35% year-on-year. They have significantly upgraded their EBITDA margin guidance to a range of 20-22%, compared to the previous expectation of 18-19%. For FY '27, they anticipate a revenue growth of approximately 75% over FY '26, while maintaining the EBITDA margin in the same 20-22% range.

Management highlighted a robust order book of 3.2 GW, with nearly 600 MW added in the current financial year, including orders from prominent customers like Aditya Birla and Amplus. They expect to add further to this order book, citing ongoing negotiations with multiple clients, which are nearing closure.

A key highlight is the launch of their new turbine model, the 4X 4.45 MW, with expectations for commercial launch within the calendar year, pending approval. The O&M subsidiary, Inox Green, reported strong growth, reaching a portfolio of 13.3 GWp across India, and aims to become the largest renewable O&M company in the country. The management expects that with acquisitions and growth, Inox Green's EBITDA for FY '27 will exceed INR 600 crore.

In terms of working capital, the company targets approximately 200 days by the end of FY '26, with an aim to bring it down to around 150 days by FY '27. The management emphasized their strategic focus on transitioning revenue guidance from megawatt to financial metrics, providing clearer visibility for future performance, and reducing external uncertainties inherent to project execution.

Question 1: "Since you have withdrawn the guidance in megawatt terms, how are we looking at Q4? Are we seeing any recovery in terms of the fact that as you mentioned there were delays? Are the issues in the project getting sorted out?"

Answer 1: We have provided revenue guidance for FY '26 and FY '27, with FY '27 aiming for 75% growth. While you can infer Q4 revenue based on the past figures, delays at customer sites are an industry-wide issue and not solely ours. Many customers aren't ready at the planned timelines, affecting projects' momentum. Thus, focusing on revenue, as opposed to megawatts, allows for a clearer outlook given our current landscape.

Question 2: "At how many days of working capital are we currently? And what are some of the things that we are doing to reduce this further?"

Answer 2: By Q3 FY '26, we're targeting 200 days of working capital. Initially, we aimed for 120 days, but due to execution challenges and revenue growth, it has shifted. We anticipate normalizing this to around 150 days by FY '27. The increase reflects our ramp-up and execution scale, which led to a temporary rise in working capital days.

Question 3: "What is your current gross debt level as of 3Q? And how do we see the debt level in the next 1-2 years?"

Answer 3: At the end of H1, we remained a net cash company and will confirm specific gross debt levels in the next quarter. For now, managing capital effectively remains our focus, and we'll provide clarity on our cash status at FY end.

Question 4: "Is your INR 600 crores EBITDA guidance for FY '27 based on the entire portfolio of 13.3 gigawatts?"

Answer 4: Yes, the INR 600 crores EBITDA guidance for FY '27 encompasses our entire portfolio"”10 GW in wind and 3.3 GW in solar. These figures consider growth strategies and upcoming synergies from recent acquisitions, significantly enhancing our profitability.

Question 5: "With the 2 gigawatt execution guidance, can we assume that post FY '27, growth will be sustainable, or should we expect tapering?"

Answer 5: We aim for 2 gigawatts of execution, and we don't foresee challenges in this regard. Transitioning to revenue guidance enhances our outlook's stability. While there may be variations in precise execution timing, revenue and profitability growth should remain robust beyond FY '27.

Question 6: "What is the timeline expected for the demerger of Inox Renewable Solutions?"

Answer 6: We're currently in the final stages at NCLT and expect to receive approval within about a month. Post-approval, the listing process will typically take 1 to 1.5 months, making it likely that the entire demerger process completes within the next 2 to 3 months, assuming all goes well.

Question 7: "Can you explain why realizations have dropped both Q-o-Q and Y-o-Y?"

Answer 7: Realization drops stem from project delays and complex contract variations, especially during this quarter. Transitioning to revenue guidance reflects the divergent nature of our contracts, offering clarity amid these fluctuations. Increased execution rates typically yield lower project-level revenues.

This covers the prominent questions and respective responses from the Q&A section of the earnings call. Each response maintains a concise and informative style while staying under the character limit.