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Mumbai: India’s leading wind energy solutions provider, Inox Wind Limited, has seen a challenging quarter, with its Q4 Profit After Tax (PAT) falling 45% from ₹192 crore in Q4FY25 to ₹106 crore this time. This is despite its revenues remaining relatively flat at ₹1,306 crore from Rs. 1,316 crore recorded during the same quarter last year, the company revealed in a regulatory filing.
The company has faced challenges with its legacy EPC vertical as well as geopolitical component friction, which has seen the wind giant shift away from site development to insulate future revenues.
The Reasons: Geopolitical Friction & Working Capital Gaps
The Wind energy sector remains highly seasonal, with the final quarter serving as the peak period to commission grid connections. However, Inox Wind couldn’t meet its obligations due to:
- Component Supply Issues: Geopolitical disruptions have resulted in steep hikes in maritime freight rates and prolonged the delivery timelines for specialized bearing and electrical sub-components.
- Payment delays from State Discoms: Payment backlogs from various state-level distribution companies (discoms) have trapped working capital, forcing Inox Wind to seek short-term bridge loans.
- EPC Friction: The company has faced various delays with its end-to-end Engineering, Procurement, and Construction (EPC) projects, with land acquisition delays, pending Right of Way clearances, and complexities in civil engineering for remote high altitude locations.
Transitioning into a Pure-Play Manufacturer
To address these concerns, Inox Wind is now looking to transition to a pure play manufacturer of wind energy equipment, aiming to get 75% of its revenues from the wind energy sector. It is aiming to supply advanced 3 MW wind turbine generators (WTGs) to independent power producers(IPPs) and commercial giants, as the company looks to collect payments faster and focus entirely on factory floor engineering efficiencies.
Long-Term Order Moat
Despite the weak financials, Inox Wind is staring at a large multi-gigawatt institutional order backlog of about 600 MW for customers like Aditya Birla, Gentari, Jakson, and Leap Green, along with a 2 GW order from group company Inox Clean.
Despite the stock losing 50% of its value in the last year, many analysts have expressed confidence in the stock as it has almost wiped out its debts and has seen its revenues grow consistently on a quarter-on-quarter (QoQ) basis. Moving ahead, investors are expecting a turnaround, and how this will be done remains to be seen.
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