Inox Wind sees stronger second-half momentum despite weak first-quarter results

Investment View and Valuation

In its August 8, 2026 1QFY27 result update, Motilal Oswal Financial Services (MOFSL) reiterated its Buy rating on Inox Wind despite quarterly revenue, EBITDA and adjusted profit after tax falling below its expectations. MOFSL characterises the quarter as weak but expects stronger momentum in the second half of FY27, supported by attractive valuations, a sizeable order book and favourable wind-sector demand indicators.

The target price is Rs 92 per share, based on a valuation multiple of 20 times FY28E EPS of Rs 4.6.

1QFY27 Financial Performance

Inox Wind reported consolidated 1QFY27 revenue of Rs 8.1 billion, down 1 per cent year on year and 35 per cent quarter on quarter, which was 15 per cent below MOFSL's estimate. EBITDA was Rs 1.5 billion, down 17 per cent year on year and 24 per cent quarter on quarter, missing the broker estimate by 18 per cent. EBITDA margin was 19 per cent, in line with MOFSL's estimate, versus 22 per cent in 1QFY26 and 16 per cent in 4QFY26. Adjusted PAT was Rs 0.4 billion, down 58 per cent year on year and 52 per cent quarter on quarter, and 48 per cent below the broker's estimate.

Order Book and Execution Visibility

The order book stood at about 4.4 GW, including the Inox Clean Energy memorandum of understanding, and provides 24 to 36 months of execution visibility. It comprised about 2.6 GW, or 59 per cent, of equipment-supply orders and 1.8 GW, or 41 per cent, of turnkey projects. The composition cited for third-party orders excludes InoxGFL Group entity orders.

Inox Wind signed a 1.5 GW wind-turbine supply memorandum with Inox Clean Energy in June 2026. The initial 500 MW tranche has been converted into firm orders worth up to Rs 35 billion.

FY27 Guidance and Growth Drivers

Management retained its FY27 guidance of about 75 per cent year-on-year revenue growth and a 20 to 22 per cent EBITDA margin. Management expects Inox Clean Energy to add about 3 GW of renewable capacity annually, of which wind could account for 25 to 30 per cent. This represents a potential annual opportunity of 0.75 to 0.9 GW for Inox Wind equipment supply, Inox Green operations and maintenance, and IRSL EPC.

Management noted that the strategic shift towards equipment supply should lower working-capital intensity relative to turnkey EPC. Trade receivables declined in 1QFY27 and are expected to improve further as EPC's share reduces.

Wind Industry Environment and Product Development

Industry conditions were described as supportive. India's installed wind capacity was 57.4 GW as of June 2026, and management expects annual wind additions of about 8 to 10 GW in the next few years, aided by round-the-clock and hybrid renewable projects.

Of 9.3 GW of renewable capacity tender awards in 1QFY27, 2.35 GW, or about 25 per cent, was standalone wind. The 4X wind-turbine prototype was on track for installation in August 2026, with commercial launch targeted by FY26-end. IRSL was evaluating entry into higher-value manufacturing, including transformers and power electronics.

INOX Green Acquisition and Estimate Changes

INOX Green received NCLT approval to acquire Wind World India's approximately 4.5 GW wind operations and maintenance portfolio, with closure expected in 2QFY27. MOFSL expects meaningful synergies from this transaction and integration by 2QFY27.

MOFSL reduced FY27 and FY28 revenue estimates by 8 per cent and 10 per cent respectively, reflecting lower assumed deliveries of 1.1 GW in FY27 and 1.3 GW in FY28.

Key Monitorables

• Whether Inox Wind can achieve its 75 per cent FY27 growth guidance after 1QFY27 delivered only about 8 per cent of the full-year target.
• The pace of third-party order inflows.
• The ramp-up of execution.