Inox Wind - The Perfect Pitch: ICICI Securities Initiates Coverage With A 'Buy' Rating

ICICI Securities Report

Inox Wind Ltd. is getting back on track, after facing a slowdown in conjunction with the wind energy industry. During this time, Inox Wind saw a substantial spike in debt.

The company has been deleveraging and we estimate its net debt to slim to ~Rs 4.7 billion by end-FY24. In addition, the industry is looking up and a revival led by a slew of policy actions is in the offing.

We initiate coverage on the stock with a 'Buy' recommendation. Our price/earning-based target price is Rs 425, valuing the wind business at 25 times FY26E earnings per share, owing to renewed focus on wind capacity addition and improved order outlook in the near and medium term and adjust it for NCRPS of Rs 18.7 billion.

We also add the value of the company’s stake in Inox Green (valued at market cap adjusted for holding company discount of 15%).

Key risks –

Delay in tendering activity, increase in competition and supply chain disrupting.

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