- Inox Wind’s revenue rose 16% YoY but fell short of consensus, exposing execution risk.
- Suzlon’s top‑line surged 43% yet net profit lagged estimates due to a hefty tax charge.
- Both firms face grid‑connectivity and land‑acquisition bottlenecks that could throttle growth.
- Brokerages trim targets but keep ‘Buy’ ratings, betting on policy tailwinds.
- Sector valuation still attractive at ~24x FY26E P/E for Inox and 25x FY28 EPS for Suzlon.
You missed the warning signs in the latest wind‑energy earnings – and it could cost you.
Inox Wind Q3 Earnings: What the Numbers Really Mean
Inox Wind reported ₹1,207 crore in revenue for the December quarter, a 16% YoY increase. The headline looks positive, yet the figure missed analyst expectations because order execution lagged. Execution shortfall is not merely a bookkeeping glitch; it reflects real‑world delays in site readiness and turnkey contract commissioning. The impact is stark: while EBITDA jumped 38% to ₹281 crore, the top‑line miss forced the net profit to climb only 13% to ₹127 crore, still below forecasts.
The company had pledged a FY26 execution target of 1,200 MW. At nine months, only 600 MW have been installed, meaning a massive 600 MW acceleration is required in Q4. Management blamed customer‑side delays, especially in the EPC (Engineering‑Procurement‑Construction) share of contracts, which pushes back commissioning dates.
Why Suzlon Energy’s Revenue Surge Masks Underlying Risks
Suzlon posted ₹4,228 crore in revenue, up from ₹2,969 crore a year earlier, driven by deliveries of 617 MW. Net profit rose 15% to ₹445 crore, but the gain was dented by a ₹119 crore deferred tax charge. More concerning is the commissioning gap: over the past seven quarters Suzlon delivered 3,175 MW of equipment, yet only 778 MW have been commissioned. This discrepancy underscores persistent land‑acquisition, RoW (Right‑of‑Way), and grid‑connectivity hurdles.
Analysts trimmed FY27 and FY28 delivery forecasts, signaling that the pipeline may not sustain the current growth rate. Nonetheless, Suzlon remains a beneficiary of increasing FDRE (Fully Developed Renewable Energy) and hybrid tenders, especially in PSU‑led projects where its C&I (Commercial & Industrial) exposure sits at 51% of the order book.
Wind Power Sector Trends: Policy Tailwinds vs. Grid Bottlenecks
The Indian wind sector is buoyed by a rising C&I demand for clean power, expanding Central Transmission Utility (CTU) connectivity, and supportive policy measures such as accelerated auction timelines. However, the sector faces a plateau risk as solar‑plus‑BESS (Battery Energy Storage System) projects intensify competition. Analysts project the wind market to level off at 8–10 GW over the next 2–3 years, a modest increase compared with the aggressive pipelines of the early 2020s.
Key metrics to watch: order‑to‑delivery lag, grid curtailment ratios, and the ratio of EPC contracts (which tend to have higher margins) to pure equipment sales. A widening gap could compress margins even if revenue appears robust.
Competitor Landscape: How Tata Power and Adani Green React
Tata Power Renewable Energy has accelerated its offshore wind pursuits, leveraging stronger balance‑sheet flexibility to lock in long‑term PPAs (Power Purchase Agreements). Adani Green, meanwhile, is expanding its solar‑plus‑storage portfolio, which indirectly pressures wind developers by offering a lower‑cost alternative for large‑scale renewable procurement.
Both peers are less exposed to the EPC execution risk that haunts Inox and Suzlon, as they rely more on turnkey contracts with pre‑qualified EPC partners. This strategic difference may explain why brokerages keep a ‘Buy’ rating on the sector but remain cautious on the two lagging stocks.
Historical Execution Gaps: Lessons from Past Wind Rollouts
Historically, Indian wind manufacturers that missed execution targets—such as the 2018‑19 dip for ReNew Power—saw their valuations compress dramatically, only to recover when grid‑connectivity projects were completed. The pattern underscores a simple rule: a firm’s stock reacts more to the speed of commissioning than to headline revenue growth.
Investors who ignored these signals in prior cycles often faced 20–30% drawdowns before the market corrected. The current scenario mirrors those past cycles, making the execution metric a leading indicator of upside potential.
Investor Playbook: Bull vs. Bear Cases for Inox Wind and Suzlon
Bull Case – Inox Wind
- Policy incentives accelerate new wind capacity, creating a surge in EPC orders.
- Successful Q4 execution of the remaining 600 MW could lift FY26 revenue beyond ₹2,500 crore.
- EBITDA margin strength (over 30%) provides a cushion against temporary order‑flow dips.
- Valuation at ~24x FY26E P/E offers upside if execution improves.
Bear Case – Inox Wind
- Continued site‑readiness delays push the execution runway into FY27, eroding cash flows.
- Rising competition for EPC contracts could compress margins.
- Target price reductions from ₹190 to ₹130 and now ₹120 reflect growing skepticism.
Bull Case – Suzlon Energy
- Strong C&I order book positions Suzlon to capture a larger share of FDRE tenders.
- Improved grid connectivity in key states could accelerate commissioning.
- Buy rating with a FY28 EPS multiple of 25x suggests valuation upside if delivery targets are met.
Bear Case – Suzlon Energy
- Persistent land‑acquisition and RoW hurdles keep commissioning ratios low.
- Deferred tax charges may re‑emerge if profitability dips.
- Target price cut to ₹55 indicates limited upside without execution improvement.
Bottom line: The wind sector remains a compelling growth story, but the winners will be those who translate orders into commissioned megawatts quickly. Keep a close eye on execution metrics, grid‑connectivity developments, and policy shifts before committing capital.