Inox Wind Stock Soars 394% in a Year: Is It Time to Buy? Experts Reveal Key Insights

Inox Wind (INOXWIND) has caught the attention of many investors due to its impressive performance. In the past year, the stock has surged by over 394%. Since the start of 2024, it has increased by 91%, delivering positive returns in five out of nine months.

In September alone, the stock went up by more than 12%, marking its third consecutive month of gains. It climbed by 20.4% in August and 29.4% in July. However, the stock experienced slight dips earlier this year, falling by 3.5% in June and 6.3% in May. Before that, the stock was quite volatile, with gains of 20.3% in April, a drop of 13.5% in March, a rise of 26.11% in February, and a 4.3% decline in January.

Recently, the stock reached a new high of ₹250.45 on September 11, 2024. It has surged by about 407% from its 52-week low of ₹47.06, recorded in September last year. With such a big rally behind it, the key question is: should you still buy it? Here’s what experts have to say about its technical and fundamental outlook.

Company Earnings

In the June quarter, Inox Wind Limited (IWL) reported a profit of ₹50 crore, reversing a loss of ₹65 crore from the previous year. The company’s revenue surged by 85% to ₹651 crore, up from ₹352 crore. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also more than quadrupled to ₹136.1 crore from ₹31.3 crore last year. The EBITDA margin rose to 21.3% from 9%, thanks to a better mix of sales. Analysts expect margins for the fiscal year to stay around 15-16%, with a chance for slight improvement.

Expert Opinions on Stock Performance

1. OM Mehra, Technical Analyst, SAMCO Securities:
   Inox Wind has recently broken out of a key trendline, showing a potential shift in momentum. The stock is gaining speed with higher trading volumes. It has strong support at the 20-day moving average, and the Relative Strength Index (RSI) remains above 70, indicating strong bullish momentum. Mehra suggests that with a solid base around ₹225-230, the stock could soon reach the ₹270-275 range.
2. Gaurav Bissa, VP, InCred Equities:
   Bissa notes that Inox Wind is in a strong upward trend, trading within an ascending channel on both daily and weekly charts. A recent breakout indicates the stock could hit the ₹275-280 levels. The stock is also approaching a bullish pennant pattern, which could further support this price target. Bissa advises existing investors to hold and encourages new investors to buy now for a potential 15% upside.
3. Rajesh Palviya, SVP – Technical and Derivatives Research, Axis Securities:
   Palviya highlights that the stock has recently broken above a consolidation range of ₹235-210, signaling a continuation of its previous uptrend. Inox Wind is trading above its 20, 50, 100, and 200-day simple moving averages (SMA), confirming a bullish trend. Increased trading volumes and positive RSI readings support this outlook. Palviya recommends buying and holding the stock, with an expected upside to ₹285-315. Short-term support is around ₹233-213.

Fundamental View

Axis Securities has maintained its ‘buy’ rating on Inox Wind and raised its price target to ₹270 (from ₹205), indicating a potential upside of over 13%. The brokerage highlighted that Inox Wind’s EPC projects arm, Resco Global, approved a ₹350 crore equity raise from key investors to take advantage of strong growth in India’s wind energy sector. This move could result in a stake dilution of 7-8% and value Resco at around ₹5,000 crore.

Additionally, the company’s substation assets, managed by Inox Green Energy, are expected to merge into Resco, unlocking more value. This will enhance the company’s ability to generate revenue from wind and solar power. Resco’s hybridization of these assets could boost Inox Wind’s profit by ₹75-100 crore annually, while crane services are expected to contribute an additional ₹50-60 crore in earnings, leading to a total increase in EBITDA of ₹150-175 crore by FY26.

Inox Wind has a strong order book and is well-prepared for growth, with guidance for 800 MW in FY25 and 1,200 MW in FY26. Axis Securities has also raised its revenue and profit estimates for FY26 and FY27, citing favorable conditions in the wind energy sector.

Conclusion

Inox Wind’s technical and fundamental outlook appears strong, with experts predicting further gains. With price targets ranging from ₹270 to ₹315, the stock looks set to continue its upward momentum. Investors and traders may want to keep a close watch on the stock, considering its bullish forecasts and market performance.