3:1 Bonus Issue: Energy Stock Trades Ex-Bonus, Record Date Tomorrow, Stock Soars 475% In 12 Months

The shares of Inox Wind Ltd, a leading wind turbine manufacturer, surged by 10% on Friday, marking the second consecutive day of gains. The stock is now trading on an ex-bonus basis following a 3:1 bonus share issue, which means three new shares were issued for every one held. This upward trajectory highlights confidence in the company's recent financial performance and initiatives.

The recent rally saw Inox Wind's stock price nearly 10% higher at Rs 165.80, turning positive for May. This comes on the back of a 20% rise in April and a 26% increase in February. The stock has been on a robust upward trend, surging almost 475% over the past year and delivering an impressive 800% return over the last three years. Year-to-date, the stock has gained 33%, reflecting strong investor sentiment and market optimism.

The company recently posted a net profit of Rs 20.3 crore for the latest quarter, a contrast to the net loss of Rs 1.8 crore in the same period last year. The company's consolidated net profit of Rs 36.72 crore for the March 2024 quarter, reversing a net loss of Rs 119.04 crore in the corresponding quarter of the previous year. The total income for the quarter surged to Rs 563.07 crore from Rs 193.83 crore, demonstrating a robust increase in business activity.

The company's expenses also rose to Rs 512.50 crore for the March 2024 quarter from Rs 312.43 crore a year ago, reflecting increased operational activity and growth investments. Kailash Tarachandani, CEO of Inox Wind, highlighted that the company has successfully transitioned to supplying 3 MW wind turbine generators (WTGs) from the earlier 2 MW WTGs. He also noted a significant reduction in debt levels, with expectations to be net debt-free within the first half of FY25.

Inox Wind's positioning in the market has been bolstered by order wins. The company secured a major order from Hero Future Energies for the supply of 210 MW of WTGs. Additionally, Inox Wind bagged its largest single wind project order of 1,500 MW from a renowned power utility, boosting its order book to a robust 2.7 GW (excluding letters of intent), with a revenue potential of Rs 18,000 crore. The total order book now stands at approximately 2.6 GW, providing strong revenue growth visibility.

On the technical front, Inox Wind's stock is showing promising signals. The Relative Strength Index (RSI) is at 66, indicating the stock is nearing the overbought territory, which starts at an RSI of 70. This suggests strong buying interest but also hints at potential profit-taking in the near term.

The company's shares have demonstrated healthy performance metrics over various time frames. The 52-week high for Inox Wind was Rs 663.00 per share, achieved on April 26, 2024, while the 52-week low was Rs 111.10 per share, recorded on May 23, 2023. Despite a 4.50% decline over the last two weeks, the long-term growth trajectory remains strong, with returns of 563% over two years and 697% over three years. Over the past five years, the stock has soared by 941%.

Inox Wind is part of the $8-billion INOXGFL Group, which has a long-standing legacy in chemicals and renewable energy. The company operates four state-of-the-art manufacturing plants in Gujarat, Himachal Pradesh, and Madhya Pradesh, producing blades, tubular towers, hubs, and nacelles.

Shareholder value has been a key focus for Inox Wind. The company declared a 3:1 bonus issue, enhancing shareholder value and broadening the investor base. The revised record date for the bonus issue is set for May 25, 2024, ensuring shareholders holding the stock before this date are eligible for the bonus shares.

Inox Wind's market capitalization stands at Rs 21,669.06 crore, reflecting its substantial market presence and investor confidence. Despite the high valuations indicated by a PE ratio of -84.87 and a negative return on equity (ROE) of -11.02, the company's strong order book, improving financial performance, and growth initiatives suggest a positive outlook.

Inox Wind's recent performance and moves position it well for future growth. The company's ability to secure large orders, transition to higher-capacity WTGs, and reduce debt levels indicate a strong operational and financial trajectory. As renewable energy continues to gain momentum globally, Inox Wind is well-placed to capitalize on this trend, driving long-term value for shareholders and contributing to sustainable energy solutions.