Inox Wind

Inox Wind reported a blockbuster Q3 FY25 with revenue of ₹994 crores and EBITDA of ₹290 crores. While the reported EBITDA margin was an impressive 29.2%, management clarified that this included a ₹70 crore reversal of Expected Credit Loss (ECL) provisions due to improved business conditions. The normalized EBITDA of ₹220 crores still represents a massive jump from the ₹99 crores reported in the previous year. PAT turnaround to ₹112 crores marks the company's most profitable quarter in history, signaling a complete recovery from past financial stress.

The company has executed 469 MW in the first nine months of FY25 and remains steadfast in its 800 MW target for the full year, implying a massive 331 MW execution in Q4. Looking further ahead, management reiterated guidance of 1,200 MW+ for FY26 and approximately 2,000 MW for FY27. This growth is supported by a 3.3 GW order book that management describes as 'firm' and 'sold out' for the next two years, intentionally avoiding long-term 'paper MOUs' to focus on high-quality, remunerative contracts.

To protect and enhance margins, Inox Wind is aggressively pursuing backward integration. In Q4 FY25, the company will commission its own nacelle manufacturing unit, operationalize its initial fleet of cranes, and commence transformer manufacturing lines. These initiatives are expected to add 100-200 basis points to EBITDA margins in FY26. Management noted that while these won't necessarily increase revenue per MW, they will significantly reduce external costs and improve cash flow through deferred payments.

Management highlighted a strong macro outlook with 15.5 GW of wind-related tenders awarded in the current financial year. They emphasized their competitive edge in the 'turnkey' segment, which constitutes 40-50% of the Indian market and where MNCs and Chinese players struggle to compete due to land and evacuation complexities. Inox Wind's 'plug-and-play' infrastructure, including a 5 GW project pipeline and ready substations, acts as a significant moat against new entrants.

The merger of Inox Wind and Inox Wind Energy is in its final stages at the NCLT, with a hearing expected in early February. Similarly, the demerger of the substation business from Inox Green is underway. Financially, the company's profile has strengthened significantly, evidenced by credit rating upgrades to A+. Net interest expenses have stabilized at ₹24 crores per quarter (normalized), and the company expects to maintain a lean capex profile of ₹50-75 crores annually for the next two years.