Inox Wind Ltd Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mohit Kumar - ICICI Securities - Analyst : Congratulations on a very good set of numbers. My first question is on the -- you just said the royalty you'll stop 3 megawatts. Can you please quantify the impact. And is it right to assume -- is it fair to resume that this will start contributing from F '26, right? That's what I think you alluded.

Question: Mohit Kumar - ICICI Securities - Analyst : Sir, the royalty on each year will stop for 3-megawatt turbines. Is it possible to quantify the impact?

Question: Mohit Kumar - ICICI Securities - Analyst : INR600,000, right? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 11:30AM, INWN.NS - Q2 2025 Inox Wind Ltd Earnings Call

Question: Mohit Kumar - ICICI Securities - Analyst : Understood, sir. My second question is on the -- of course, we have a large order book. How are you ramping up? How are you shaping up to execute a very largish order execution in H2? I think our targets to H2, given that we have done 280 megawatts, it's a very sizable number. So are we -- do we have the capability? Have we been able to ramp up build up the sites or worked on...

Question: Mohit Kumar - ICICI Securities - Analyst : My last question is on the -- can you help us with the time line for Resco business, when we can see a significant contribution? I'm talking mainly about new businesses, the cranes, (inaudible).

Question: Shweta Dikshit - Systematix Group - Analyst : Congratulations on a good set of numbers. Could you throw some light on what has contributed to the EBITDA margins during the quarter? And like I understand the annual guidance increased by 200 basis points. That's for FY26 or this year?

Question: Shweta Dikshit - Systematix Group - Analyst : Overall, our realizations can be better in the next two quarters, but margins will moderately fall down. But still, I mean --

Question: Shweta Dikshit - Systematix Group - Analyst : And our execution guidance is maintained at 800 megawatts?

Question: Shweta Dikshit - Systematix Group - Analyst : All right. Another question was on the management briefly spoke about adding larger wind -- a larger turbine blades to the 3-megawatt WP. Could you please elaborate on that?

Question: Shweta Dikshit - Systematix Group - Analyst : Okay. If I would squeeze in one more last question that would be around what's the composition of 2-megawatt turbines in the order book right now? Or is there any residual execution? Or are we completely --

Question: Aniket Nikumb - AFL Capital - Analyst : Yes. Congratulations on a great set of numbers, sir. I just had one quick question. Can you give us an update on the merger between IWEL and Inox Wind. I believe there was a final hearing or something scheduled today. If you can share --

Question: Prit Nagersheth - Wealth Finvisor - Analyst : Congratulations. Wonderful numbers and fantastic execution. Just a couple of questions, Devansh. One is on the order book. When do you see the PSU side of order flows that would start kicking in?

Question: Prit Nagersheth - Wealth Finvisor - Analyst : Right. Okay. So Devansh, what kind of order book addition do you anticipate from here to the end of the year? Is it possible to give any kind of guidance on that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 11:30AM, INWN.NS - Q2 2025 Inox Wind Ltd Earnings Call

Question: Prit Nagersheth - Wealth Finvisor - Analyst : Great. One other question, Devansh was that one of your other peers, the international one is coming up with a 5-megawatt platform for next year.

Question: Prit Nagersheth - Wealth Finvisor - Analyst : Great. And any insights or updates on the Siemens business? Any color on that, that Inox may be going for it or something like that?

Question: Raj Kumar - Finvestors - Analyst : Sir, congratulations on a good set of numbers. Sir, my question is, in one of the interviews I followed you on media and in your last con call also, you said that FY26 guidance of 1,200 megawatts will have an upside risk. So do you want to quantify that upside potential?

Question: Raj Kumar - Finvestors - Analyst : Sure. And sir, next, sir, this year, what could be the realization per megawatt? I think INR6 crores per megawatt was what was said in the last some con calls. So what I'm seeing in last twoquarter results that the realization per megawatt is slightly lower.

Question: Raj Kumar - Finvestors - Analyst : Okay, sir. And do you see any risk in achieving what we have guided for, for this year or next year? Any risk?

Question: Nidhi Shah - ICICI Securities - Analyst : I just had one on the lower interest that we're seeing this quarter. So is this something that we would see for the rest of the year as well?

Question: Nidhi Shah - ICICI Securities - Analyst : So we're seeing a much lower interest payment this quarter as compared to the previous one. Is this something that we could expect for the year going forward as well for the remaining two quarters?

Question: Abhishek Nigam - Motilal Oswal - Analyst : Just wanted to check how are you thinking for beyond FY27? And now that you are net cash, (inaudible). So what is the plan for excess cash? So that is my first question.

Question: Abhishek Nigam - Motilal Oswal - Analyst : Fair enough. And how should we factor in the interest expense going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 11:30AM, INWN.NS - Q2 2025 Inox Wind Ltd Earnings Call

Question: Abhishek Nigam - Motilal Oswal - Analyst : Fair enough. Just one last one for me. So you talked about the consortium. So how does that help in terms of working capital and other charges? So any color on that will be really helpful.

Question: Harshil Shethia - - Analyst : Sir, what kind of CapEx are you planning in FY25 and '26.

Question: Harshil Shethia - - Analyst : Both the years included INR75 crores?

Question: Harshil Shethia - - Analyst : Per annum. And maintenance CapEx?

Question: Harshil Shethia - - Analyst : Okay, included in this number.

Question: Chandan Mishra - Finvestors - Analyst : First of all, I want to congratulate you on your good set of numbers, sir. And my all questions have answered, sir.

Question: Utkarsh Somaiya - Aditya Birla Group - Analyst : I just wanted to ask you about your tax rate. So I think you mentioned earlier that it's going to be nil for FY25 and '26. Can you please confirm that?

Question: Utkarsh Somaiya - Aditya Birla Group - Analyst : And for FY27? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 11:30AM, INWN.NS - Q2 2025 Inox Wind Ltd Earnings Call

Question: Utkarsh Somaiya - Aditya Birla Group - Analyst : For FY27. Okay. And just to confirm, sorry, to be repetitive, that for FY26, you plan to execute 1,200 megawatt at INR6 crores per megawatt, with a 17% EBITDA margin, is that right?

Question: Utkarsh Somaiya - Aditya Birla Group - Analyst : And net of other income and interest will have zero outflow, right?

Question: Alisha Mahawla - Envision Capital - Analyst : I hope this is audible. And congratulations on a great set of numbers. Just would like some color on the competitive intensity because we -- what we're reading is that some Chinese players are becoming competitive again and maybe setting up more capacity while we do understand that there is ample demand and work for everybody, very soon it can turn into maybe aggressive pricing and impact on margins. So your thoughts on that would be helpful.

Question: Alisha Mahawla - Envision Capital - Analyst : And are we seeing in large corporates may be thinking of setting up own capacity just to -- and then just outsourcing the turnkey working in that case --

Question: Alisha Mahawla - Envision Capital - Analyst : Understood. And is it right to assume that 100% of our supply chain is domestic?

Question: Alisha Mahawla - Envision Capital - Analyst : Understood. And just one last question on your balance sheet. In your opening comments, it was mentioned that you just spent last 6 quarters in strengthening the balance sheet and repaying debt and strengthening the cash flows. Where should we see the cash conversion cycle going from here? Is there scope for any improvement? Is there an ideal target that we want in terms of inventory or debtors? Is there -- what would be the road map for that?

Question: Alisha Mahawla - Envision Capital - Analyst : Sorry. My question was not on cash flows on the cash conversion cycle, your working capital cycle.

Question: Anuj Upadhyay - Investec - Analyst : Congrats on a good set of numbers. My question is basically relates to the restructuring across the Resco. When would the asset would get transferred to the Resco, that is the substations. And when do we plan to procure the cranes and put to the commercial use?

Question: Anuj Upadhyay - Investec - Analyst : Okay. Any broad number which you can share? How much crane we plan to procure and how much contribution would it have at the top line and at a margin or EBITDA level at the consol entity?

Question: Anuj Upadhyay - Investec - Analyst : Got it. And this could be used for the third party as well, right? It's not purely for a captive product?

Question: Prateek Giri - Subh Labh Research - Analyst : So my question is to Kailash. Kailash, I just wanted to understand regarding our top line profile and margin profile. So what I can see is in H1 FY25, we have done around INR1,370 crores of revenue with 23% EBITDA margin. Now when we say that in next two quarters, we'll be increasing the EPC revenue, which is actually high margin than turbine supply business -- turbine supply revenue. So I'm --

Question: Prateek Giri - Subh Labh Research - Analyst : Got it. Got it. And in terms of top line, it's bulkier than turbine supply, is it? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 25, 2024 / 11:30AM, INWN.NS - Q2 2025 Inox Wind Ltd Earnings Call

Question: Prateek Giri - Subh Labh Research - Analyst : So I mean, in next half, we'll be executing around 500 megawatts of business. And as per the (inaudible) INR6 crores per megawatt, we will be getting around INR4,500 crores, INR4,800 crores of revenue. Is that understanding correct?

Question: Prateek Giri - Subh Labh Research - Analyst : Okay. So going ahead, realization per megawatt would increase and margins should also -- realization per megawatt would increase and margins should decrease, correct?

Question: Prateek Giri - Subh Labh Research - Analyst : Understandable, understandable. I have one request to make. Devansh ji, if you can share the order pipeline.

Question: Krupa Desai - Electrum Capital - Analyst : Firstly, congratulations on a good set of numbers. Sir, my question was -- so currently, India is lagging behind the power evacuation infrastructure because of mainly transmission delays. I know we have a very good order book. But do you think because of this issue, newer capacity executions could delay or impacted.