- Inox India posted 29% YoY revenue growth to INR 4.3 bn, beating consensus estimates.
- EBITDA margin held steady at 22%, delivering INR 0.9 bn of EBITDA.
- PAT surged 35% YoY to INR 0.7 bn, powered by a more‑than‑2× jump in LNG revenue.
- Order book stands at INR 3.9 bn, with industrial‑gas contracts representing 60% of the pipeline.
- Analysts forecast an 18% earnings CAGR through FY27, justifying a 40× P/E target of INR 1,400.
You missed Inox India's latest earnings beat, and you could be leaving money on the table.
Why Inox India's Margin Stability Beats Sector Drag
While many Indian industrial players are grappling with input‑cost inflation, Inox managed to keep its EBITDA margin at a solid 22%. That stability stems from two key levers: a high‑margin LNG franchise and disciplined cost control in its industrial‑gas arm. By contrast, peers such as Tata Steel and Jindal Steel see margins wobble between 8% and 12% because of raw‑material volatility. Inox's ability to sustain a margin well above the sector average not only cushions earnings against macro headwinds but also provides a runway for upside when revenue accelerates.
How the LNG Boom Is Rewriting Inox's Growth Playbook
The LNG segment exploded, posting revenue of INR 1 bn—more than double the prior‑year figure. Globally, LNG demand is projected to grow at a CAGR of 5% through 2030, driven by the energy transition and stricter emissions standards. Inox, as a major supplier of LNG infrastructure and cryogenic equipment, is positioned to capture a slice of that tailwind. The company's contracts with major refineries and port authorities have already translated into higher utilization rates, and the revenue multiplier effect is evident: each 1% increase in LNG volume translates to roughly a 0.6% lift in total earnings.
Order Book Momentum: The Real Driver Behind FY25‑27 Earnings Forecast
Inox reported a fresh order intake of INR 3.9 bn, with industrial gas projects making up 60% of the pipeline. Historically, whenever the order book breaches the INR 4.5 bn threshold, the company has delivered double‑digit earnings growth in the following two quarters. The logic is straightforward: a robust order book ensures capacity utilization, spreads fixed costs over a larger revenue base, and reduces the volatility of quarterly earnings. The past five quarters show a pattern—two quarters fell short of the 4.5 bn mark and posted modest earnings, while the remaining quarters, buoyed by large contracts, outperformed consensus by 15%‑30%.
Technical Valuation: Is a 40× P/E Justified?
Analysts are applying a forward P/E multiple of 40× to Inox's FY27 earnings estimate, compared with an industry‑wide average of 30×. The premium reflects three factors: superior margin profile, a high‑growth LNG tailwind, and a relatively low share float that can sustain price appreciation. For context, a 40× P/E on an estimated FY27 EPS of INR 35 translates to a target price of INR 1,400—a 25% upside from the current market level. While the multiple appears lofty, it is anchored by the company's track record of >15% CAGR over FY20‑25 and the projected 18% earnings CAGR through FY27.
Investor Playbook: Bull vs. Bear Cases
- Bull Case: Continued LNG demand, order book > INR 4.5 bn, margin expansion to 24% → earnings CAGR 20% → share price climbs above INR 1,600.
- Bear Case: Slowing industrial‑gas demand, order book stalls below INR 4 bn, margin compression to 20% → earnings CAGR <10% → price pressure towards INR 1,200.
Bottom line: Inox India's blend of margin resilience, LNG‑driven top‑line acceleration, and a healthy order backlog creates a compelling risk‑adjusted upside. Investors seeking exposure to India's industrial gas and LNG infrastructure space should consider adding Inox to a diversified growth portfolio, keeping an eye on order‑book trends and global LNG pricing dynamics.