Inox Wind: Nuvama cuts stock price target post Q1 results, retains Buy

Nuvama Institutional Equities has retained its ‘Buy’ rating on Inox Wind Ltd (INXW) with a revised target price of Rs 190, down from Rs 236 earlier, implying an upside from current levels. The brokerage cited “robust Q1FY26 margins” and long-term revenue visibility from a healthy order backlog, but factored in lower execution guidance and EPS dilution from the ongoing rights issue.

“INXW posted modest Q1FY26 execution at 146 MW (consensus estimate: 180 MW). However, muted revenue at Rs 830 crore was offset by higher OPM at 22.2 per cent on a product-heavy mix, leading to 7 per cent beat on consensus EBITDA. Adjusted PAT at Rs 110 crore came in 11 per cent ahead of consensus even as it booked a non-cash deferred tax charge of Rs 40 crore,” Nuvama said.

The brokerage noted that order inflow was “soft at 51MW, taking order book to 3.1GW (execution over 24 months)”. INXW remains “among only two wind-EPC suppliers in India, riding tailwinds of RTC, FDRE and C&I demand”.

On margins, Nuvama said, “EBITDA margin is a healthy 22.2 per cent (versus 21 per cent in Q1FY25) potentially aided by a greater mix of WTG supply while EPC-related installation costs will spill over to end-FY26/FY27. We reckon full-year FY26E and FY27E EBITDA margins shall be 18 per cent-plus aided by execution ramp-up-led operating leverage, especially in H2.”

The brokerage has cut its FY26E/27E execution forecast to 1.1GW/1.8GW (from 1.2GW/2GW) and factored in EPS dilution of 6.5 per cent from the Rs 1250 crore rights issue, while noting that repayment of promoter debt “aids sum-of-the-parts valuation by Rs 5/share”.

In Q1, INXW operationalised its nacelle plant and completed IWEL’s merger. “Management has maintained execution guidance of 1,200MW/2,000MW for FY26E/27E and we are conservatively cutting execution and baking in 1,100MW/1,800MW,” Nuvama said.