Our recent discussions with various industry players, the ministry of new and renewable energy (MNRE) and wind IPPs reveal that wind capacity additions would remain strong, with FY16 likely at ~2.5-2.8GW. The government aims to augment the wind sector capacity (60GW by FY22, which implies ~5- 6GW/annum); to achieve the same, the incentives (generation-based incentives, accelerated depreciation) provided to the industry are likely to continue over the next few years.
A comparative analysis of features offered by the three biggest players in the industry highlights marginal differences in the WTG—Gamesa’s 2MW G97 WTG offers the best power curves and, in turn, the lowest cost per unit. We find a marginal difference in the power curves between Suzlon and Inox Wind (INXW).
We expect INXW to report 31% revenue CAGR over FY15-18E, largely supported by 22% volume growth, realization improvement of 6% and a jump in commissioning revenues (R8.9b, 3.4x of FY15). Our target price of R530 (15x FY18E EPS of R35) implies a 47% upside.