Inox Wind shares gain over 8% on robust Q4 results, should you buy?


Inox Wind shares surged over 8 per cent intrday on Monday after the wind power solutions company on Friday reported a 77.5 per cent rise in consolidated net profit at Rs 209.2 crore for the quarter ended March 2016. It has had posted a net profit of Rs 117.8 crore in the same period a year ago.

At 11.41 am, shares of Inox Wind were trading 4.47 per cent up at Rs 252.60. The scrip opened at Rs 251.90 and has touched a high and low of Rs 261.75 and Rs 247, respectively, in trade so far. Sensex was up 360.03 points, or 1.43 per cent, at 25,588.53.

Gross sales of the company jumped 96.85 per cent year-on-year (yoy) to Rs 1,827.73 crore.

EBITDA margins for the fourth quarter of 2015-16 stood at 18.3 per cent.

Devansh Jain, executive director, Inox Wind in a release said, “The year gone by has been a momentous year for Inox Wind and the wind industry. We are delighted to maintain our position as the country’s fostest growing wind energy solutions provider. With more than 2,000 MW of sales to date, the projects installed by Inox Wind will aid in curtailing over 2.5 million tonnes of carbon emissions annually.”

For the financial year ended March 2016, debt-to-equity ratio of Inox Wind stood at 0.80. The ratio was at 0.85 last year.

Brokerage house Motilal Oswal downgraded Inox Wind shares to ‘Neutral’ post Q4 results. The brokerage house in a research note said, “A lower opening order book as of Q1 2017 (-6% YoY), higher interest costs and a continued fall in wind tariffs would put downward pressure on execution and margins. We cut our earning estimates by 14 per cent and 10 per cent respectively for 2016-17 and 2017-18 and lower our target price to Rs 290. Key upside risks to our Neutral rating are a renewal of generation-based incentives by the government post FY17, slowdown in solar installations and a sharp improvement in the net working capital cycle.”

However, Angel Broking has ‘Buy’ recommendation on Inox Wind with a target price of Rs 458.