AMSC
That’s the view even I’m having. AMSC is a proxy for INOX with 63% of its revenue coming from there, as of now!
Gujarat Fluorochemicals Limited
Guj Fluorochemicals has not moved an inch over the same period even though 70% of its market capitalisation is due to INOX Wind.
Do you think Suzlon can gain an advantage over rivals in winning bids through their idea of a Hybrid Farm (Wind+Solar)? Or the contract parameters/weather requirements for Wind and Solar are too different to combine at one place?
Does anyone have any idea as to why Q1 results aren’t out yet? Almost a month behind last year’s schedule. In my experience, delayed news is always bad news…
Since from this Quarter it has been mandated for companies to shift their accounting policies to IND-AS. The deadline has been extended to 15th september , applicable only for this quarter.
Annual Report Quick Analysis…
30% Compounded Annual Growth in Capacity Addition likely till 2022…
(60GW total wind energy target in India (26 is already accomplished… 34GW to be added in next 5 years and actually it would be 50GW because year by year commissioning is more than targets in Renewable energy sector…)
Assumption: 30% Market Share…in Wind Energy Segment…on an Average (which is right now 23%)…'t .
It is natural the day hybrid policy does come in; we simply need to import solar panels and put them up on the same sites, which we control the common infrastructure for.
Let’s hope he isn’t underestimating the optimization required for effective installation of Solar Panels.
Sorry to be asking a very stupid question this late in the discussion. But what is the business model of Inox. Does it work like a project execution (EPC) company where it sets up the wind farm and gets paid for the wind turbines and the installation part and then hands it over to other companies to run. Or does it actually continue to own wind farms and generate electricity and sell it to the government based on the current price. Also what are the different revenue streams in case it is the former:
Project execution and installation
Repair and Maintenance (AMC)?
Asking this to understand if there are continuous revenue streams post the project has been executed or just one time payment!
Thanks for your help in clarifying such trivial issues!
Navneet
P.S: Very small exposure as of now (< 1% of the product portfolio) but looking to add more at these valuations.
In this model, Inox takes care of all the aspects related to development of wind power project from concept to commissioning including operation and maintenance . This includes wind studies, energy assessment, land acquisition, site infrastructure development, power evacuation, statutory approvals, supply of WTG, erection and commissioning and long term operation and maintenance of the wind farms.
Equipment Supply Model
In this model, Inox supplies the WTG and other associated equipments to customers for erection on sites owned by them. The rest of the project development work, which includes wind studies, energy assessment, land acquisition, site infrastructure development, power evacuation, statutory approvals, etc. is in the customers’ scope. Erection and commissioning and long term operation and maintenance of the wind farms remains in Inox’s scope. Civil works could either be in Inox’s scope or the customers’ scope, on a case to case basis.
However, order book of the company is very high - The company had an order book of 1.24 gigawatt as of June 2016. - which is very high. Looks like the company will sustain for next 4 years without getting any extra orders.
The company is consistently receiving many recurring order which is something good for the long-term sustainability of business.
The company is getting complex day by day. Many positivities with many negativities.
Employee expenses rose 54 percent in the quarter, and finance costs climbed by 75 percent. Costs are rising leading to low margins.
But this increment is good if it occurs due to growth. And looks like same is the case with INOX WIND.
Infrastructure Services Ltd (Inox subsidiary) did an aquitision of an investment firm.
One thing which I think is good for Inox Wind is that the management keeps updating about their operations to media time to time.
Might be company will be having deflated price in the short run. Long term looks bright to me.
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.
Point 4 on receivables is scary. I’m assuming you listened to the concall (I don’t see the transcript on the website). How did the management sound? Confident or hesitant while answering the analysts’ questions?
Ideally, companies should live-stream the concalls like a podcast for the benefit of investors. Not that difficult/expensive.
I would suggest anyone interested in Inox to go through Dr. Vijay Malik’s blog and read about self-sustainable Growth Rate concept. I felt SSGR should be a key criteria for long term investments and this is a sector which does not seem to be fit in that regard as SSGR would be questionable in long term. My view is only from long term financial sustainability of business on its own cashflows.
In the AGM notice, Special Business no.4 - re-appointment of Shri Rajeev Gupta as Whole-time Director, Remuneration (pending shareholder approval) is up-to Rs.80 lakh per annum. Is that a fair remuneration by Industry Standards?
