Co bags 70 MW order from Adani Enterprises: Inox Wind

Inox Wind has bagged orders from Adani Enterprises to install windmills, confirms Devansh Jain, executive director of Inox Wind in an interview to CNBC-TV18. It will be Adani's foray into wind energy. Inox will install 50 MW windmills in Andhra Pradesh and 20 MW in Madhya Pradesh. The wind energy major had commissioned 800 MW in FY16 as compared to 500 MW in FY15, and it hopes to perform even better in FY17, Jain adds.Below is the verbatim transcript of Devansh Jain's interview with Reema Tendulkar & Surabhi Upadhyay on CNBC-TV18.Surabhi: Run us through the contours of this order. How the margins for this particular order are going to stack up against your overall earnings before interest, taxes, depreciation and amortisation (EBITDA) margins, the blended margins?A: We have won two orders from Adani Enterprises. It is a company called Adani Green Energy, which is a subsidiary of the Adani Enterprises Ltd. It is Adani’s first foray into wind energy. It is not a very large order, but it is a big deal for us in the sense that Adani has chosen us as their partner for their foray into the wind energy sector. The two orders, which we won at this point in time are 20 megawatt order in Madhya Pradesh and a 50 megawatt order in Andhra Pradesh. These would be for two megawatt turbines with 10 rotor diameter blades.So, the margin should be fairly attractive. From an overall margin perspective, while we have been maintaining more than 16 percent margins as a company, it will be hard to give exact numbers of this order, but it should be around that number or slightly higher than that number.From an order value perspective, I suppose it is pretty common knowledge now that per megawatt cost is approximately Rs six crore. So, broadly, the contract value would be more than Rs 420 crore.Reema: This is the maiden order from Adani Enterprises. Are you their preferred choice, if they have to come out with more such orders and any indication from Adani Enterprises, whether they want to scale up their wind portfolio business?A: Certainly, they have got a very ambitious target for the wind vertical. We are in discussions with them for a very sizeable amount of additional orders. Obviously, till that fructifies, we cannot talk about that, but this is just the tip of the ice-berg.Surabhi: If you could give us some sense of total order book as of now and how you would ideally be capping off the entire year and whether the growth in the order book is going to be as robust in FY17 or whether you might expect a bit of a tapering off. The reason I am asking you this is there is an overall concern also that one hears of, whether the increasing thrust on Solar Power is actually going to eat in to the wind pie. So, tell us if those concerns are well placed and justified or not?A: There are very few industries, which are showing any positive growth, forget growth itself. It is now official, Ministry of New and Renewable Energy (MNRE) has taken out details about what the wind energy sector has done in the financial year which just concluded. We have done about 3,450 odd megawatts as an industry, which is the highest ever wind installation in India from inception.Last year the sector did about 2,300 megawatts. So, that is an almost more than 50 percent growth. So, there is this unfounded concern about wind eating into solar or solar eating into wind. It is utter rubbish, makes no sense whatsoever.Secondly, as you may have seen recently in a lot of the recent solar bids which have taken place in the past 3-4 months, solar tariffs have ranged from about 4.5 up till 5.5. If you look at majority of the wind states in India today, the wind tariffs, which prevail for multiple years today are about 4.5 to 4.7.So, from a cost of energy perspective also, wind is the lowest.Surabhi: From a tariff point of view, wind is still winning over solar. Then leave us with some idea about FY17, either revenue targets, if you can give us some guidance on the order book growth that you are expecting.A: As Inox Wind this year, the MNRE data shows we have commissioned close to 800 odd megawatt. Last year, we had done about 500 megawatts of sales. So, that is almost a 60-70 percent growth for us this year based on the data which MNRE has taken out. Obviously, I cannot give you exact financials given that results will be announced sooner or later, but for the industry as a whole, the coming financial year, we should see at least a 20 percent growth for the entire sector. Inox Wind has been growing faster than the entire sector so, hopefully this should be another record year for us.