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Rating: Subscribe

The valuation of Inox Green looks reasonable, considering the nature of its business and the comparative margin profiles. Inox green has much better EBITDA margins than its global peers, said KR Choksey Research.

"We are cautious on the company's order book as most of its contracts are from its parent. We are optimistic considering the consistent track record of the company, strong parentage, government initiatives to push the renewable sector and also expect the financials to improve with reducing debt on the books," it added with a 'subscribe' rating.

Rating: Subscribed with Caution

At a higher price band, the company is demanding an EV/Sales multiple of 13.6x (based on FY22 sales), which seems to be on the higher side considering the return ratios, said Choice Broking.

The macros of the wind energy segment are improving after the regime change and pandemic-led restrictions. With a massive capacity addition target over the next five years, the target market for the O&M services would expand, it added with a 'subscribe with caution' rating.

Rating: Subscribe for Long term

Inox Green has a 7% market share in O&M portfolios and has an opportunity for inorganic growth through the acquisitions of inactive players. The O&M contracts are long-term contracts with price clauses which provide long-term revenue visibility, said Arihant Capital.

"Inox green is expected to clear the debt which will reduce the interest cost substantially and improve bottom levels. The issue is valued at an EV/EBITDA of 22x based on FY22 EBITDA," it added with a 'subscribe for the Long term' rating.