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Buy Inox Wind; target of Rs 505: Angel Broking

Angel Broking is bullish on Inox Wind and has recommended buy rating on the stock with a target of Rs 505 in its October 27, 2015 research report.

October 29, 2015 / 16:11 IST
     
     
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    Angel Broking's report on Inox WindInox Wind (IWL) reported a strong set of numbers for 2QFY2016. Its top-line grew by 85.6% yoy to `1,008.2cr, led by 212MW of wind turbine generator (WTG) sales (increase of 86% yoy) during the quarter as against 114MW of WTGs supplied during 2QFY2015. The commissioning of the 140MW of WTG (increase of 367% yoy) during the quarter (as against 30MW in 2QFY2015) also contributed to the revenue. The EBITDA during the quarter came in at `137cr, an increase of 57.6% yoy; however, the same is lower than our estimate of `152.4cr. Its EBITDA margin fell by 242bp yoy to 13.6% and the same is below our estimate of 15.3%. The decline in the EBIDTA margin was largely due to increase in the share of commissioning revenue. The Net profit improved by 63.5% yoy to `89.1cr, during the quarter.Outlook and Valuation: We forecast IWL’s top-line to grow at a CAGR of 48.1% during FY2015-17 on the back of aggressive capacity expansion, strong order book, and large project sites. We expect EBITDA margin to improve to 17.5% by FY2017 on the basis of higher realization from larger rotor blades and no royalty payment burden from FY2016 onwards. The stock is currently trading at 12.4x its FY2017E EPS. Given the attractive valuation, we maintain our Buy rating on the stock. We have assigned a multiple of 16x to its FY2017 EPS of `31.6 to arrive at a target price of `505, says Angel Broking research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

    first published: Oct 29, 2015 04:11 pm

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