Detailed Narrative
Strong Q3 FY25 Financial Performance
Inox Green Energy Services delivered robust financial results for Q3 FY25, with revenue increasing by 22% year-on-year to INR 74 crores. EBITDA grew by 23% to INR 29 crores, and Cash PAT saw a significant jump of 76% to INR 23 crores. This strong performance was underpinned by an improved machine availability of 96.2% for the quarter and 96.3% for the nine months ended December 2024, reflecting continuous operational improvements.
Ambitious Portfolio Growth Targets
The company is pursuing an aggressive growth strategy, aiming to expand its O&M portfolio to 10 gigawatts within the next 3 to 4 years. This target comprises both organic additions, projected to reach approximately 7.2 gigawatts, and strategic inorganic acquisitions, expected to contribute 2 to 3 gigawatts within the next 12 to 18 months. By the end of FY25, the organic portfolio is anticipated to reach around 4 gigawatts.
Strategic Inorganic Expansion via NCLT Route
Inox Green is actively engaged in inorganic growth, having invested in the debt of a large company currently undergoing the NCLT process. Management expressed confidence due to their control over the Committee of Creditors and anticipates the acquisition to be completed and consolidated within 6 to 9 months. Approximately INR 300 crores from the recent fundraise have been allocated for this acquisition, which is expected to significantly boost the O&M portfolio.
Resco Demerger and Shareholder Value Creation
The demerger of the Resco business, encompassing substation and global operations, is in progress, awaiting regulatory approvals from BSE and NSE, with the NCLT process expected to take 6-9 months. This strategic move is projected to benefit Inox Green shareholders by providing them with shares in the new Resco entity (20% of Resco for IGESL shareholders) and by transforming Inox Green into an asset-light company, thereby removing depreciation charges and improving its PAT and PBT.
Entry into Solar O&M and Hybridization
Inox Green is expanding its service offerings into new business areas, including solar and hybrid project O&M, with execution expected to commence in the next fiscal year. While solar O&M margins are typically lower than wind, the company aims to achieve higher-than-industry-average margins through hybridization solutions and by leveraging synergies with its existing technical expertise and resources.
Capital Allocation and Fund Utilization
The company successfully raised INR 1,050 crores, with INR 550 crores already received and the balance callable. Of the received funds, approximately INR 300 crores have been utilized for the ongoing NCLT acquisition, and INR 70-80 crores have been used for debt reduction. Management plans to deploy an additional INR 200-250 crores over the next 2 to 3 months, further strengthening the balance sheet and funding growth initiatives.