INOX Wind

Stock Opportunities Untested - but worth a good look
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On a broader look the operational metrics of wind industry has the following similarities with the airline industry.

  1. High capital expenditure requirement before even starting to get the revenues.

  2. High fixed costs due to idling of the investments.

  3. No pricing power as there is high competition for the cheapest supplier.

  4. Technology based , so any new technology developed by a competitor will leave its investment on technology redundant.

Apart from the mentioned facts following negatives also concern Wind Energy companies.

  1. Dependent on goverment policies and Electricity boards. http://economictimes.indiatimes.com/industry/energy/power/rs-4000-crore-investments-in-wind-energy-on-brink-of-becoming-npas/articleshow/51576997.cms

  2. It doesnt decrease carbon footprint as the material required for the windfarm itself and then running the windfarm on a reliable basis cause a lot of carbon emission.it is mentioned that due to the unreliable nature of wind energy, the traditional power plants cannot be run at lower capacities to save on carbon emissions. Hence going forward governmnet may actually discourage wind farms.

http://www.aweo.org/problemwithwind.html

Alll in all : Inox may be a good company but its in the wrong buisness. its just a matter of time before a company in this sector goes bankrupt.

On the positive side: indian OMC’s to invest in renewable energy.

However how much of these materialize remains to be seen.

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