Inox Wind shares fall over 8%. What brokerages didn't like in Q3 results

Inox Wind shares crashed 8% to a 52-week low of Rs 97.50 on Monday after the wind turbine manufacturer reported a dismal quarter marked by sluggish execution and a sharp earnings miss that prompted brokerages to slash price targets and cut growth forecasts.

The company delivered just 252 megawatts in the third quarter, well below expectations, while consolidated revenue of Rs 1,207.5 crore missed estimates by a stunning 34%. Adjusted profit of Rs 117 crore came in 35% below forecasts, weighed down by surging interest costs and minority interest outflows.

Nomura led the downgrades, slashing its target price to Rs 155 from Rs 200 and cutting its valuation multiple to 20 times from 30 times "on weak management guidance." The brokerage also trimmed execution estimates across the board, now expecting 1 gigawatt in fiscal 2026, 1.6GW in fiscal 2027, and 2GW in fiscal 2028, down from previous forecasts of 1.1GW, 1.8GW, and 2.1GW, respectively.

"On-ground challenges on execution persist," Nomura said, maintaining a 'BUY' rating despite the steep cuts.

Motilal Oswal was similarly bearish, slashing its price target to Rs 150 from an earlier level and cutting its valuation multiple to 20 times from 24 times. The firm cited "weaker sentiment in the wider market as well as in the power/renewables sector," along with "a modest cut to earnings, and a slower-than-expected pace of new orders."

The brokerage cut fiscal 2026 and 2027 profit estimates by 10% and 5%, respectively, after adjusting deliveries and realisations lower. It maintained a 'BUY' rating, noting the revised target price implies 42% upside.

The quarter's EBITDA margin of 23.3% came in lower than the 22.4% posted a year earlier, "potentially aided by a better mix of WTG supply while EPC-related installation costs are likely to spill over to Q4FY26/FY27," Nomura said.

EBITDA missed estimates by roughly 3% due to weaker-than-expected revenue growth, while profit fell short by 35% due to minority interest outflow from strong performance at Inox Green Energy Services, a 56% owned operations and maintenance subsidiary, and a sharp jump in interest costs.

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Interest expense surged 46% year-over-year, nearly double Nomura's estimate, adding to margin pressure.

In a notable shift, management "has refrained from giving execution guidance now onwards," Nomura said, instead providing revenue guidance of more than Rs 5000 crore for fiscal 2026 and top-line growth of 75% in fiscal 2027.

The company posted third-quarter order intake of 202MW with an order book of approximately 3.2GW to be executed over roughly 24 months, providing long-term revenue visibility. Realisation per megawatt stood at roughly Rs 46 million.

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Nomura expects full-year fiscal 2026, 2027, and 2028 EBITDA margins above 20%, "aided by execution ramp-up-led operating leverage," though the weak third-quarter performance has clearly shaken confidence in the company's near-term delivery capabilities.

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