Motilal Oswal's research report on Inox Wind4QFY16 sales stood at INR18.3b (up 97% YoY) which was above our estimate of INR15.5b. Supplies during the quarter stood at 328MW which was up 67% YoY. EBITDA was at INR3.0b (+111% YoY) with EBIDTA margins at 16.4% (up 110bps YoY) and marginally above our estimate of 16.1%. Adj. PAT at INR1.98b (+124% YoY) was above our estimate of INR1.73b. A lower opening order book as of Q117 (-6% YoY), uncertainty of renewal of GBI post FY17, higher interest costs and a continued fall in wind tariffs would put downward pressure on execution and margins. We cut our earnings by 14%/10% respectively for FY17/18 and lower our target price to INR290; we apply a 10x multiple to get our target price of INR290. Key upside risks to our Neutral rating are a renewal of GBI by the government post FY17, slowdown in solar installations and a sharp improvement in the NWC cycle. 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.
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