INOXWIND Inox Wind Ltd · Other Q4 FY26 · concall

Pattern: inox renewable solutions top

Refused to commit on inox renewable solutions top.

Inox renewable solutions top — question deflected.
Working capital days status — answer hedged.
Value destruction over last — answer hedged.

4 deflections · 7 weak · 10 clean — pushback across 11 of 21 Q&A turns

Focused evidence 11 of 21

Prit Nagersheth · Wealth Finvisordeflection

Could we get a sense of the top line and EBITDA profile for the Inox Renewable business given that the demerger dates will be announced pretty soon?

We cannot say at this point in time. I think once that demerged, we'll elucidate more plans. At this point in time, it's part and parcel of Inox Wind. Once its demerged, we'll elucidate our plans on that.

Prateek Jain · ICICI Prudential Asset Managementweak

On working capital days - in the last concall after Q3 results, we were quite confident of achieving net working capital days of about 200 days. Where do we stand on that as of Q4 end? Also on execution - we started with 1,200-odd megawatts for the entire year of FY26. How much were we able to execute either in megawatt terms or in INR terms?

As we have communicated on the last call, we are not giving any megawatt-specific guidances. We are driven by the revenue. We have achieved INR4,500 crores of top line. We have given 75% of the guidance for the next year across all parameters, revenue, EBITDA as well as PAT numbers. In terms of the working capital cycle, there are various macro level issues which have happened, including our supply chain disruption, which has happened due to the ECS, which is one of the major components needs to come from outside, which has been delayed. Though we have covered up to a certain extent in quarter 1. In the overall scheme of things as against the guideline of INR5,000 crores, which we have given in the last call, we have achieved INR4,600 crores and this INR400 crores of makeover will happen in the quarter 1, quarter 2 time scale.

Prateek Giri · Subh Labh Researchweak

Devansh, I'm sure the value destruction that has happened in last 1 year is concernable. The strategy which you are alluding now I think would certainly work in the favor of minority shareholders.

I hope you do recognize that over the past 4 years, we've got a virtually zero value company to massive value. We've spun off Inox Green, which has created tremendous value. We're on the verge of demerging Inox Renewable Solutions, which we hope will create tremendous value. I am not too bothered about short-term aberrations in stock markets. We are here to create long-term value. Market cap going up down is not something which bothers me. The value creation we are doing at Inox Clean, where we've raised close to $750 million at a couple of billion dollars of valuation. Plus the might of Inox Clean, both on the IPP side and the solar side and GFCL EV in the BESS side. We're probably on track to be amongst the top three energy transition conglomerates in the country. That value, my friend, would be in billions. I beg to disagree. I think our entire renewable arm today is valued north of 10 billion.

Deepak Poddar · Sapphire Capitaldeflection

For FY26, what was our execution in terms of megawatt?

As we have given multiple times that we are not driven by the megawatt execution, megawatt supply. It is all about the revenue numbers being the kind of different kind of contract we are entering into, it doesn't make too much of a sense to tell specific megawatt it is. Hence, the revenue guidance which we have given, we are driven by revenue. That is the number that we have refrained from giving. That was stated policy last time. So probably we refrain it again. It's a revenue that we have been giving up both for historical as well forward.

Deepak Poddar · Sapphire Capitalweak

In terms of equipment supply, we have been transitioning from turnkey to equipment supply. What does that mean for margins? 70%, 80% of your order book is in equipment supply. So your margin will have an upward kicker because of that?

We have said that we have already given the guidance in presentation also that we are looking to go only North of around 20% or higher, not below that. So it's not actually impacting so much on the margin as we move on the equipment supply. It is more or less similar or higher only, not going too much higher because of that. In fact as O&M increases, O&M is 50% margin business for us. So to that extent, there will be a bias for a higher margin. There are pros and cons. When you do turnkey, EPC, yes, sometimes you get better price. But at the same time, risk slowly, some of those margins get eroded when your land cost goes up or ROW cost goes up. But equipment supply is a very firm kind of those things. You have today a lot of control with the steel prices being passed on many of those things. And at the same time, these are very simple on LC terms mostly so that you get the cash flow up front. So that's where margin doesn't get eroded with the delay in payments or with different kind of cost or risk which is coming up during the execution of EPC.

Rahul Kumar · Vaikarya Fundweak

Your revenue from operation in Green came down from INR82 crores to INR69 crores. What was the reason for that quarter-over-quarter?

In terms of Inox Green, it has, quarter-on-quarter plus minuses can happen a little bit of the amount. If you see the quarter 3 numbers is around INR78 crores vis-a-vis INR69 crores in the current quarter. So broadly INR8 crores, INR9 crores due to some value add services can happen on a quarter-on-quarter basis, but we need to see the annualized number, which is in line with our expectation and the guidance which we have given.

Rahul Kumar · Vaikarya Fundweak

This INR40 crore acquisition related income, if we exclude then our EBITDA would be much lower. Is there any cost associated with this INR40 crore acquisition-related income which you are incurring today? Then why our core profitability is so low? If I exclude the acquisition related income and profit, then our core margin looks lower. Why is that?

To be very frank. No as such INR40 crores is pure income net of the deferred tax. So in a PAT statement it is somewhere around INR25 crores, INR26-odd crores. So basically, it is not low. As far as the EBITDA margin is concerned, we are always 50%-odd which we have guided. It is about quarter-on-quarter, you are comparing quarter-on-quarter basis. Quarter-on-quarter basis, it can be low, a little bit high. But on an annualized basis, if you see out of INR426 crores of turnover which we have achieved, we have achieved INR210 crores of EBITDA margin, which is around 50%-odd. Devansh: It would be at about 45%. So we can't, I mean, broadly, we look at 50%. Otherwise, the treasury income, the capital line in the company would have been earning interest as well, which would be part of other income or would have been deployed in other measures to increase profitability. So INR600 crores of investments made to buy a company and say, let's exclude INR40 crores of earnings on that INR600 crores of investment.

Ujjwal · ANR Capitalweak

My main concern was that we have constantly been overcommitting and under delivering. First we guided on megawatts, then we changed the entire metric and said that we will be guiding on revenue terms. Then even that we have not been able to achieve. Quarter 4 performance had decline Y-o-Y. When I look at our peers, they are doing upwards of 40% growth. What is the reason for this?

I beg to disagree completely on the fact that we have failed miserably in achieving targets which we've been giving quarter-on-quarter. I think for 3 to 4 straight years, we've achieved every single target. Our EBITDA targets every quarter are beaten. Our revenue guidance's have been upgraded consistently over the past couple of years. Yes, over the course of this year, we faced certain challenges. Even when we shifted over to a revenue guidance and guided for INR5,000 crores in the last quarter, it was subject to force majeure. I don't think you or I would have known there would be a world war kind of a situation where ships don't come in, where ports don't clear materials, where customers hold back payments. We now have Inox Green, which is a multibillion dollar play where we have raised capital at billions of dollars. We are the fastest IPP in the country, the fastest-growing solar player globally. Inox Green itself has acquired two of the top five erstwhile wind players. Frankly, we're the only player in India who survived. We've also completely turned around the company by moving from 100% turnkey now to 25% turnkey within a period of 2 years.

Prit Nagarsheth · Wealth Finvisordeflection

I had one question regarding the dividend policy for Inox Green, given that the full year cash back was INR158 crores, and we are expecting INR600 crores of EBITDA or cash back for next year. Are we looking at some kind of policy to be put in place?

Let the consolidation of the two companies happen. Once that happens, I'm sure the Board in all its wisdom will put in place a dividend policy.

Utkarsh Somaiya · Eiko Quantum Solutions Private Limitedweak

What are you going to do with this INR600 crores of cash next year? How are you going to deploy it? Is it fair to assume that most of it will be used for acquisitions? What are the conversations going on with the Board? Is it buyback?

So, let's look at that coming in first, and then we look at further acquisition opportunities. I'm sure you're aware, Inox Green has had almost 9 or 10 acquisitions in the past couple of months. Even in Inox Green, we went on to acquire 2 of the top 4 wind OEMs, which went bankrupt in India. So, I think let's get to that scale, and then we'll see how to deploy that capital. I don't think there are so many acquisition opportunities, obviously, in India. We've really consolidated the sector. Out of 5 players, 2 are allied, 3 are bankrupt. Out of the 3 which went bankrupt, 2 we've acquired. There's only one odd left who doesn't control common infra himself. So frankly speaking, there are limited acquisition opportunities now. I know, Mathu and the team have a couple of GWs lined up, which I don't think should cost us more than 10%, 20% of the free cash flow that we have. Not this point, but let us all assure to everyone that this will be done in the interest of shareholders.

Atul Jobi · Prosperity Wealth Managementdeflection

On Inox Wind, when I look into the expenses side, the EPC and operational maintenance expenses have seen a significant increase year-on-year, while the cost of materials have seen a decline year-on-year. Can you give more info on it?

No, it is not like, you know, the different components need to be seen differently, it is a kind of a consolidated numbers, because there is a certain change in inventory, certain EPC cost, purchase of stock material. So, it is a combination of that. So, COGS are calculated accordingly. So don't go by line by line, it needs to be seen in totality, and we are in line with our, over numbers our margins and numbers which we have guided for. And this is totally linked with the change in sales mix also. Earlier sales component was different now the sales is different. So that's why, we cannot match it one on one.

▸ Other Q&A (10)

Vikas Agarwal · Individual Investor

The assets which have been taken over by Inox Green as an investment, can the management guide on the EBITDA profile or the margin profile on the same? Secondly, one of our peers in the wind segment is diverting from equipment to more of a turnkey. Why is the management shifting from majorly turnkey to equipment supply? Any guidance for Inox Green for FY27? Also, the wind segment strength against solar plus BESS given battery prices and FDRE focus?

Mathu: Your questions on the two acquisitions, which will roughly contribute a 50% EBITDA margin, because both are all the previous OEMs with the substations and all those evacuation systems. So this gives a similar EBITDA margin, which is roughly 50%. For the projection of FY27, we have already guided it will be north of INR600 crores. Sanjeev: We are not moving out. One-third of our capacity is now being built up by our own group company, Inox Clean. 3+ GW is coming from our own INOX Clean. We will continue to do EPC for them. So with that large capacity being filled from Clean and some select few customers that we will decide, we will make a decision of EPC, but predominantly the strategy going forward would be to do an equipment supplier with majority of our capacity being reserved or available for either the jobs which are under execution or to INOX Clean, which gives us almost one-third of the capacity. Management: We still believe we are still quite capable and can do a lot of EPC projects. But it is just as a part of the strategy, what we see lots of IPPs are doing and it's part of risk mitigation. We focus more on selected EPC project and less IPPs. Sanjeev: Historically, it was imperative to do turnkey EPC. Over the past several years, we've realized the biggest pain point or the biggest working capital blockage happens by doing EPC and turnkey. We have now pivoted towards almost 75% to 80% of our order book now being equipment supply. 24 months ago, 100% of our order book was turnkey. We want to focus on large free cash flows.

Prit Nagersheth · Wealth Finvisor

On Inox Green's INR600 crores of EBITDA for FY27 - closing capacity for FY26 is around 3.5 GW. The acquisition of 4.5 GW is waiting for NCLT clearances and the additional 2 GW acquisition is also waiting. How are you getting to the INR600 crores run rate? Is that based on the Q4 number for FY27 or expecting this to start from Q1 itself?

Devansh: With respect to entity one, the order is reserved in the next couple of weeks. Once that order is out, all the accruals of that company from the date of taking over that asset belong to us. Whether it gets affected in Q1 or Q2, all the revenues, all the profitability of that company will accrue over the course of the full financial year. With respect to the second entity, it's in the final phases of EOIs and submissions. Over the next 60 to 90 days, that would also see light of day. Effectively over FY27, both these entities will be part of Inox Green and the revenues and the profitability of these entities from 1st April '26 will be reflected in the consolidated results of Inox Green. Management: Inox Wind has approximately 3.5 gigawatts and 4.5 from one of the company and 2 from another company. And organically, we are adding 1.5 gigawatt. So that puts more than 11 gigawatt. And this makes EBITDA more than 600 along with 2, 3 GW of solar and a few acquisitions also in the place. Other than that, it is not only per MW thing. We have value-added services, which gives a lot of extra EBITDA margins. So that will make us to the north of 600 comfortably.

Prateek Jain · ICICI Prudential Asset Management

So this was due to external factors not on our end. Whatever steps we have taken to improve - everything is to improve the working capital cycle. Would you see it reflect in the next numbers that we publish and these numbers fall off sharply from here on?

The geopolitical issues created a bit of a setback for us in the quarter. The main component, which has to come from outside of India, ECS that got delayed. It has to come through a ship. Then we have issues on commodity going up. So those things impacted our overall revenue, but these are things of the past. We would see -- we expect that the guidance given now on a 70% to 75% increase from the year just completed is under control and we should be able to meet that. We also mentioned about a PSU contract, which created a bit of a issue in terms of revenue. So that is also over now, full steam ahead on that project as well.

Prateek Giri · Subh Labh Research

On execution of order book - for the past two-three quarters, we have been listening about challenges like right of way, grid connectivity, etc., for execution rather the erection of the turbines. How are things looking now? Is it addressed to an extent or are we still facing those challenges?

Just to give you a sense, we are pivoting towards equipment supplies. More and more the backlog today, I would say 50% is the backlog today with equipment supply. And this would going forward, maybe going up to even more than 75%. Coming to the jobs in execution, we hope with the present execution strategy that we have by H1, majority of our EPC projects would be over. Other than one leading job in execution, majority of our EPCs would be closed, completed waiting for statutory compliances to get into commissioning mode.

Deepak Poddar · Sapphire Capital

What's your O&M revenue mix and this year order inflow target?

The revenue mix right now broadly is about 10% was O&M, 90% was Inox Wind. Going forward, as the entire consolidated might of the 2 acquisitions comes through, O&M will possibly be moving towards about 20%, 18% to 20%. I don't think we have order inflow targets, like I said, and like Sanjeev said, we're already sitting on a 3.1 GW platform. There's a very large visibility from Inox Green. So frankly speaking, if our revenue guidance is 75% growth on 4,500, which takes you to about INR7,500 crores. I think we are sold out for the next 2.5 years in terms of what our overall ambitions are.

Rahul Kumar · Vaikarya Fund

Can you explain this other income in the Green of INR60.8 crores. How much of that is related to the assets you're going to acquire? How much of income is there from treasury because you have a lot of cash and equivalent also on your balance sheet? And how much of it is from these value-added services, which you consider as a part of core income?

Majority of the other income which you are seeing in our P&L statement related to the two strategic, related to the debt which we have acquired for our two strategic acquisitions. They are steady in value addition services as well, which we used to classify as other income under Ind AS. But treasury income is a small component. So in a quarterly basis, I give you a broad breakup of 61, it is around INR40 crores, which is coming from the two strategic acquisitions which we are going to do broadly INR10 crores from the value addition services and INR10 crores is broadly towards the treasury income which we have earned.

Ujjwal · ANR Capital

How optimistic is our guidance for FY27 when we are looking at 75% growth that we are saying right now? Is it on like a very optimistic side that we are targeting it? Or we are saying this on a conservative basis given the fact of a few of the quarters that we have not done well, which side are we on when we are guiding 75% growth?

I think we were on the side of conservatism while doing this. Having said that, if there's a world war or if there's a COVID lockdown, then don't hold us responsible for it.

Pradeep Motwani · Motwanis

I wanted to know approximately how long the upcoming demerger of Inox Green Energy will take; in the last quarter, you mentioned that it would be completed in about three to four months. Will it create unlocking value for shareholders, minor shareholders?

So, demerger has already been approved by the NCLT. Now you know the kind of administrative process is going forward. So, demerger has been approved. Now the NCLT has an administrative process that is going on. So broadly in the next 1-2 months, it will get completed. It should get completed depending upon the administrative approvals if required.

Utkarsh Somaiya · Eiko Quantum Solutions Private Limited

From this INR600 crores EBITDA that you expect to generate, how much of that will convert into operating cash flow?

Out of INR600 crore fees, broadly everything will be converted into the operating cash flow. As such, there will be no depreciation, no finance cost, and we have a tax shield up to INR700 crore of losses. So, next financial year, this is all cash flows which will be generated for Inox Green shareholders. Operating cash profit.

▸ Prepared remarks (5 blocks)

Good evening, everyone, and welcome to the Q4 FY '26 Earnings Call of Inox Wind and Inox Green Energy. As many of you may know already, I have recently joined Inox Wind as Head of Investor Relations. Let me introduce the management team on the call with us. So we have Mr. Devansh Jain, Executive Director, INOXGFL Group; Mr. Kailash Tarachandani, Group CEO, Renewables business, INOXGFL Group; Mr. Sanjeev Agarwal, who is the CEO Inox Wind; Mr. S. K. Mathusudhana, CEO Inox Green; and Mr. Akhil Jindal CFO INOXGFL group, and we have other senior members of the management along with us. Kailash Tarachandani: Thanks, Sweta. Good evening, everyone, and thank you for joining the Q4 FY '26 earnings conference call of Inox Wind Limited and Inox Green Energy Services Limited. As you are aware, FY '26 saw the highest ever wind power generation capacity addition of 6 GW. Going forward, we expect to see strong annual wind capacity addition of 8 to 10 GW over the next few years driven by RTC, FDRE and hybrid capacity additions, as we see renewable power generation move structurally from being a source of infirm power to firm power. The ongoing geopolitical tensions have provided further tailwinds to the entire ecosystem for the renewable energy sector, right from equipment manufacturing to renewable power generation capacity. As you are aware, there is a strong push from the government to increase domestic manufacturing and reduce import dependencies. INOXGFL is extremely well placed to benefit from and contribute towards achieving these goals. We are one of the most integrated players in energy transition in the country today.

Given our strong presence in the entire value chain right from manufacturing of wind turbines, solar cells and modules and transformers, EPC, including development of evacuation infrastructure, RE IPP and renewable energy O&M, we are also further backward integrating into power electronics in a big way. INOXGFL Renewable adopts 'ONE INTEGRATED' strategy where a virtuous cycle of interplay within group entities will add execution and revenues and the group synergies and businesses would help secure large growth and insulate from market cycles. We are pivoting Inox Wind to a new avatar that would address the challenges as well as put us on a path for a major transformation that 2/3 of the annual execution for the next 4 to 5 years will be from Inox Clean and CESC, and the remaining 1/3 from other marquee customers. This would address the twin challenges of working capital cycle and revenue certainty. Our Group Company, Inox Clean Energy, has large capacity addition plan with a targeted capacity addition of 14 GW by FY'29. It plans to add almost 3 GW plus capacity annually over the next few years. Out of this, about 20% to 30% is expected to be wind. This is expected to provide a virtuous cycle of continuous order inflows to the entire value chain of Inox Wind, IRSL and Inox Green over the next few years in addition to order flows in the regular course of business. We believe INOXGFL Group's renewable business is on the cusp of multiyear multifold growth with the benefit of group synergies and businesses that secure large growth and insulate from market cycles.

Thanks, Kailash. Good evening, everyone. I will first brief you on the financial and operational achievements of Inox Wind for the quarter under review, as well as other key developments and future road map before handing over to my colleague, Mathu, for his briefing on the development at Inox Green. We are pleased to inform you that we have been able to deliver a strong quarter, despite the prevailing geopolitical tensions. This has also led us to take certain strategic decisions to address these challenges, and we have now pivoted the company on a much stronger footing. Coming to the order book, we continue to have a large and very well-diversified order book of 3.1 GW, I repeat again, 3.1 GW, having added almost 600 MW in this financial year, including orders from customers like Aditya Birla, Gentari / Amplus, Jakson Green, First Energy and Leap Green. I mean these are a few of them from a large order book. We expect to further add to this order book given that multiple customer negotiations are nearing closure. This provides us execution visibility of more than 24 months. Further, as mentioned earlier on this call, we expect to receive large recurring order inflows from our Group Company, Inox Clean Energy, over the next few years. Our Group Company, Inox Clean Energy plans to add 3 GW plus capacity annually over the next few years. Out of this, about 20% to 30% is expected to be wind. This would translate into almost 1/3 of our annual execution targets, also helping to improve the working capital cycle. As our base order book has large visibility, we are very selective in taking new external orders. The pivot towards taking orders from marquee customers and the increased shares of equipment supply in the overall order mix would help to significantly improve the working capital cycle. Inox Wind is well placed to benefit from the continued macro push through towards renewables, as well as from the interplay of group company synergies.

The launch of our new 4.4-MW turbine is on-track, and we expect to receive all approvals and subsequently commercial launch -- launching the product within this calendar year. This is expected to help us penetrate deeper, as well as lead to margin improvements. On the receivable front, there has been some challenges, especially in our PSU contracts, where we have seen payment delays. However, we expect the receivables cycle to see significant improvement going forward, given our strategic pivot towards equipment supply orders going forward, as well as from an increase in the proportion of orders from group companies in the overall order book. Our order book has changed substantially over the past few years from being largely turnkey to now 50:50 turnkey and equipment supply currently, which we plan to further increase to 75% going forward. On Inox Green, our O&M subsidiary continues its strong growth trajectory, reaching more than 13+ GWp of wind and solar portfolio pan-India. With this strong growth prospects, Inox Green will be the largest renewable O&M company in India in the near future and is well placed to become one of the largest, globally by 2030. Further, the scheme of demerger of Inox Green, evacuation infrastructure business and its merger into Inox Renewable Solutions has been approved by the Honorable NCLT, Ahmedabad. IRSL will be automatically listed on the stock exchange post receipt of all the approvals. Additionally, as discussed earlier in the call, we expect Inox Green to be a huge beneficiary from the rapid growth across the RE IPP and solar manufacturing under Inox Clean Energy, our group company, which has a large-scale expansion plan. In terms of the guidance for FY26-27, we expect our consolidated revenue to grow by around 75% over FY26 with EBITDA margin to be 20% to 20%.

Good evening, everyone. I will first brief you on the financial achievements of Inox Green during the quarter before moving to other aspects. Machine availability for the entire portfolio averaged approximately <strong>96.5%</strong>. As we have maintained a significant part of our profitability is currently being reported as per the income, as per the accounting norms. However, please note that these are operating in nature. Inox Green portfolio stands at 13 + GWp comprising of approximately 10.5 GW of wind assets and the balance being solar assets. This also includes the investment made to acquire 6.5 gigawatts of operational wind O&M assets of 2 companies. We expect to complete the acquisition soon, consequent to which the consolidation of financials into Inox Green will result in a multifold increase in consol EBITDA and PAT for FY27 over FY26. We believe Inox Green will be one of the biggest beneficiaries of the multidimensional growth coming from the annual capacity additions of 3 GW+ at our group company, Inox Clean, external projects executed by Inox Wind along with inorganic growth. This is expected to establish Inox Green into one of the largest renewable O&M companies globally. With all our investments formally folding into Inox Green's balance sheet, along with organic growth, we maintain our FY27 EBITDA guidance to be upwards of INR600 crores.

Watch next

Next concall: does management commit on inox renewable solutions top?
Whether the working capital days status hedge tightens to a number.
Whether the value destruction over last hedge tightens to a number.