Inox Wind Ltd, a prominent player in the wind energy sector, reported a significant increase in revenue for the June quarter, nearly doubling from the same period last year. This remarkable performance was attributed to several key factors: expanded profit margins, enhanced operational execution, and a healthier and more robust order book. Notably, the company experienced a significant turnaround in its financial performance, returning to profitability after a loss in the previous year.
Despite this positive development, Inox Wind’s shares experienced a decline of over 3% on Wednesday, following a substantial rally in the previous trading session. The rally was driven by the company’s strong quarterly results and the positive sentiment surrounding its future prospects.
A major highlight of Inox Wind’s recent performance is the elimination of its external debt, a result of a fresh capital infusion from its promoters. This development has bolstered analyst optimism about the company’s future. However, some analysts caution that the stock price may already reflect much of the positive news, raising concerns about its current valuation.
Axis Securities has set a target price of Rs 205 per share for Inox Wind, based on a price-to-earnings (P/E) multiple of 30 times its estimated earnings per share (EPS) for FY26. The stock, which recently traded at Rs 215.80, has already exceeded this target and reflects an impressive 329% increase over the past year. Despite this, Axis Securities suggests that the stock might be overvalued at its current price.
Nuvama, while acknowledging the company’s strong performance in Q1FY25 with an operating margin of 21.3% (above the estimated 15%), has revised its margin estimates downward for FY25–27. The brokerage’s target price of Rs 201 is below the stock’s recent trading levels. Nuvama anticipates that margins will normalize to 16-17% as engineering, procurement, and construction (EPC) costs are recognized later in the year.
In contrast, ICICI Securities has a more bullish outlook on Inox Wind. The brokerage highlights the company’s reduced debt and record-high order book of 2.9 GW. ICICI Securities expects Inox Wind to execute 0.75GW in FY25 and 1.2GW in FY26, supported by robust order inflows. Consequently, ICICI Securities has raised its target price to Rs 240 from Rs 180 and has reiterated its 'BUY' rating on the stock.
For retail investors, the outlook for Inox Wind remains generally positive, reflecting the company's strong fundamentals and promising growth trajectory. However, investors should be mindful of the recent sharp price movements, which may have already incorporated much of the anticipated positive developments. Brokerages recommend that investors remain informed and exercise caution, given the potential for continued volatility and the stock's recent performance.
Overall, while Inox Wind has demonstrated impressive growth and operational improvements, the current stock price may be subject to fluctuations based on future performance and market conditions. Investors should consider both the company’s strong financial fundamentals and the recent volatility when making investment decisions.
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