Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Nigam from Motilal Oswal Financial Services. Thank you, and over to you.
Yeah, thank you so much. Good evening, everyone, and welcome to the Q2 FY 2025 earnings call of Inox Wind Limited. For today's call, we have with us Mr. Devansh Jain, Executive Director, Inox Wind Group, Mr. Kailash Tarachandani, Group CEO, Inox Wind Limited, Mr. Akhil Jindal, Group CFO, Inox Wind Group, Mr. Rahul Lunia, CFO, Inox Wind, and other senior members of the management. I would now hand over to the management for their initial remarks, after which we will open the floor for the Q&A session. Thank you.
Sir, you're not audible. Management team, I believe you are on mute mode.
Audible?
Yes. Please go ahead.
Thanks a lot. Good evening, all. Thank you for joining today's conference call. I will take you through some of the key financials for the quarter. Inox Wind Limited announced its results at its board meeting held today, Friday, twenty-fifth October two thousand twenty-four. The results, along with the earnings presentation and press release, are available on the stock exchanges as well as on our website. For the quarter on consolidated basis, Inox Wind Limited has reported revenue of INR 742 crores in Q2 FY twenty-five versus INR 384 crores in Q2 FY twenty-four, an increase of 93% YOY. EBITDA of INR 189 crores in Q2 FY twenty-five versus INR 70 crores in Q2 FY twenty-four, an increase of 171% YOY.
Profit after tax of INR 90 crores in Q2 FY 2025 versus loss after tax of INR 27 crores in Q2 FY 2024. Cash profit of INR 138 crores in Q2 FY 2025 versus INR 1 crore in Q2 FY 2024. With Q2 financial performance being the highest in past 8 years, we are on course for achieving our financial targets for FY 2025. Further, I'm pleased to inform you that Inox Wind Limited has turned net cash as of 30 September 2024. You can refer to slide number 22 of our investor presentation for the detailed breakup.
While the interest expense has been reducing continuously over the past few quarters, I expect it to reduce substantially going ahead since the fundraised money came in into Inox Wind in the middle of the quarter gone by, and there were a few one-time expenses related to consortium formation, et cetera. Further, in H1 FY2025, Inox Wind Limited has delivered positive operational cash flows. In September, Inox Wind achieved another milestone as we signed a consortium agreement with banks for INR 2,200 crores, which are largely non-fund-based limits with BGs and LCs. These limits have been sanctioned on the financial strength of IWL's balance sheet and without the requirements of any corporate guarantees or any other support from Gujarat Fluorochemicals Limited. I would now like to hand over the floor to our CEO, Mr. Kailash Tarachandani, for his remarks. Thanks.
Thanks, Rahul. The quarter gone by has been yet another where we have continued our upward growth trajectory. Our profits have been to INR 90 crore for the quarter. I'm especially pleased that on the back of the tremendous effort put by our team over the past two years, our balance sheet has now become net cash, and we have delivered positive operational cash flow in H1 FY 2025, which is bound to significantly increase going ahead. We have been able to maintain our execution at 140 megawatts during this period, despite the typical seasonal monsoon challenges faced during the quarter. On the back of our strong performance in the first half of FY 2025, I believe we are on course to achieve our targets for the full financial year.
We are rapidly scaling up our execution, backed by our largest ever order book of 3.3 gigawatts, having added around 1.2 gigawatts of orders to date in the current financial year. Our order pipeline is extremely strong as we continue to engage in active negotiation and bids across multiple utilities, PSUs, and C&I customers, both new and existing. In fact, with a large current order book and a strong anticipated order inflows over the coming months, we expect our execution to be higher than our current guidance of 1,200 megawatts. However, we are currently maintaining our execution guidance. There are several aspects coming into play, factoring which, we expect our margins to be higher than our guidance of 15% in FY 2025.
Our royalty payment for our 3 MW wind turbine will stop after FY 2025, resulting in immediate addition to our bottom line. Our backward integration activities, which includes in-house cranes and manufacturing of few critical components, will further add to our margins. We are also working on the launch of our 4.X MW turbine, as well as larger blades on our 3 MW turbine. Factoring in all the gains, we expect our margins to improve by around 200 basis points from 15% to 17%. Finally, a brief overview on the macro outlook, which continues to be highly favorable. In the current financial year, around 12 gigawatt of new wind hybrid FDRE tenders have been awarded. Tariff continues to be very competitive, ranging at around INR 3.3 per unit for wind solar hybrid.
... INR 3.6 - INR 3.68 per unit for plain vanilla wind, and INR 4.37 per unit for FDRE projects in the recent auction. Demand from the C&I segment, which is over and above these figures, has continued to gain pace. I would now like to open up the floor for the question and answers.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Hi. Good evening, sir, and congratulations on a very good set of numbers.
Sir, can you use your handset?
Yeah, I'm using the handset. Am I clear now?
Can you speak a bit louder, please? Yeah.
Yeah, yeah.
Thank you.
Good evening, sir, and congratulations on a very good set of numbers. My first question.
Thank you.
You just said the royalty will stop at three megawatt. Can you please quantify the impact? And, is it right to assume, is it fair to assume that this will start contributing from FY twenty-six, right? That's what I think you alluded.
Hello. Is your question do royalty stop now? Sorry, Mohit, can you just be a little louder, clearer?
Question that royalty will, royalty on GFL will stop for three megawatt turbines. Is it possible to quantify the impact?
I think it's going to be close to about, should be about INR 600,000 a megawatt from the coming financial year.
Six lakh, right?
Roughly six lakhs a megawatt from the coming financial year, increment to our profitability.
Understood, sir. My second question is on the order book, of course. We have a large order book. How are we ramping up? How are we shaping up to execute a very large-ish order execution in H2? I think our targets for H2, given that we have done 28 megawatt, is a very sizable number. So are we, do we have the capability? Have we been able to ramp up, build up the sites or, you know, work on or hire?
So I think, Mohit, it's fundamental to five functions. I think we spoke about that. We focused the past six quarters on setting right the balance sheet, the capital, getting our banking lines in shape. As you know, over the quarter, we've become net cash. As you know, over the quarter, all corporate guarantees have fallen off after seven years. The other two elements are supply chain. Our supply chain is currently ready for one gigawatts. We should be ready for two gigawatts by end of this year. In terms of sites, we have about two gigawatts of sites available on a plug-and-play basis. Naturally, in the monsoon period, we're not really going to be ramping up execution.
In fact, it's a great job done by the team that we've done about 140 megawatts in peak monsoon, when Gujarat has been really, really bad this year. So I think those are the four pieces. As you rightly mentioned, our order book is huge, as Kailash already mentioned. There are so many discussions going on, frankly, that the list is endless. So I think, if you look at it quarter on quarter, there's almost 25% growth in a peak monsoon quarter. Year on year, there's a 90% growth. I think our company is well geared for the mega ramp up or the mega play which we have. In fact, not just this, we're gearing up for 2 gigawatts in FY 2027.
My last question is on the... Can you help us with the timeline for RESCO business, when we can see a significant contribution, talking mainly about new businesses, you know, the cranes, the C&I customers, when-
I think that's going to play out over the course of the year. I would not share micro details at this point in time. I think we are sharing consolidated numbers at this point in time. I think that's more relevant. Even RESCO is part of Inox under this point in time. It will get demerged subject to board approval, sometime next year. So, you know, frankly speaking, at this point in time, we're simply guiding for consolidated margins. As Kailash already mentioned, and as Rahul mentioned, we've upped guidances from 15% to 17% on this call, with the caveat that there's further upside possible as we keep moving forward, quarter on quarter.
Understood. Thank you and all the best. Thank you.
Thank you, Mohit. Thank you.
Thank you. We'll take our next question from the line of Shweta Dikshit from Systematix Group. Please go ahead.
Hi, good evening. Is my audio clear?
Yes, please go ahead.
Hi, congratulations on a good set of numbers. Could you throw some light on what has, you know, contributed to the EBITDA margins during the quarter? And what is... Like, I understand, the annual guidance increased by two hundred basis points. That's for FY twenty-six or this year?
So firstly, on your question on the margins, so our expectation of the two hundred basis points increase in the overall annual margin is for FY 2025, and it's slightly higher for FY 2026, but at this point of time, we are maintaining at 17%. Now, on your question on the higher EBITDA margins during the first half, specifically, is because it's been more of supplies of the turbines rather than the EPC work, which was a bit hampered due to the monsoon season being there in the second quarter. From second half onwards, you will see-
Okay.
The margin being a bit moderated, because we'll be doing a much larger EPC, and the revenues from that also will grow, which will be a lesser margin business compared to our supply of the turbine.
... So overall, our realizations can be better on the, in the next two quarters, but margins will moderately fall down. But still, I mean, what-
For the full year, we've upgraded guidance for margins. In any case, for the full year, we guided for about 15%. We are upgrading guidance to 17% for the full financial year.
Our execution guidance, is it maintained at 800 megawatts?
It remains at 800 megawatts, with the caveat that there's a further upside to the next year's guidance.
All right. Another question was on you, the management briefly spoke about adding larger winds, like along larger turbine blades to the three megawatt WTG. Could you please elaborate on that?
No, we are working on that, for the 4.X turbine, which we talked about. The engineering part is done. We have actually ordered some components of the prototype also. So we will be going ahead with all the certification, et cetera, early next year, and possibly starting the commercial production in the later half of FY twenty-five, twenty-six or beginning of calendar twenty-six.
Okay. If I would squeeze in one more last question, that would be around what's the composition of two megawatt turbines in the order book right now? Or is there any residual execution? Or are we completely have you com-
It's largely, right now, all the order book is mainly three megawatt, and very small portion of two megawatt is left, 7%-8% hardly. So rest is all three megawatt.
All right. That's it from my end. Thank you.
Thank you. Next question is from the line of Aniket Nikumbh from GFL Capital. Please go ahead.
Hello?
Mr. Nikumbh?
Hello.
Yeah. Please go ahead.
Yeah. Congratulations on a great set of numbers, sir. I just had one quick question. Can you give us an update on the merger between Inox Green and Inox Wind? I believe there was a final hearing or something scheduled today. If you can share what-
Yeah. So for today, actually, the meeting has been scheduled for the next one week. So maybe by eighth or ninth, again, the hearing will happen, and we'll be able to know the outcome of it. But we feel that within one month, you know, we should be able to get some good news.
Perfect. Thanks, and congratulations, and all the best.
Thank you. We have our next question from the line of Preet Nagarsheth from Wealth Finvisor. Please go ahead.
Yeah, hi. Congratulations, wonderful numbers and a fantastic execution. Just one question, a couple of questions, Devansh. One is on the order book. When do you see the PSU side of order flows back to start kicking in?
Hi. Thank you, sir, Preet. It's interesting you ask when we see more of the PSUs kicking in. The last year, the questions we were facing were, "We have only PSUs." We don't have them diversified across C&I. Having said that, you know, Kailash will give more insight. But we are, frankly, we are working with, you know. There are so many PSU vendors out there in which we are participating, will be participating. There are lots of C&I deals and larger IPP deals going on. You know, frankly speaking, we are now no longer fixated to any one category of customers. And I think there are at least ten or twelve very large discussions going on. So I think as we keep moving forward, we keep announcing deals across the spectrum.
Right. Okay. So, Devansh, what kind of order book addition do you anticipate from here till the end of the year? Is it possible to give any kind of guidance on that?
Look, I don't think we should get into that. I think we're very, what we've guided for is that FY 2027, we're targeting a two gigawatt play. And as I've said multiple times, what happens in the industry is, the peak order book you could have, which is executable, and I'm not talking of paper LOIs, unlike some of our peers who have multi-gigawatt orders with less than 10% executed on the ground. We believe in firm orders and credible companies and parties with whom you can Google, you can check up, you can look at the board of directors, their financing capabilities. And to that extent, I think 24 months would be peak. So I would expect that at that point in time, if you're doing a two gigawatt wave, a four gigawatt order book would be very large.
We already sit on a 3.3 gigawatt order book, so I think, I think we're very, very solidly placed on the order side.
Great. One other question, Devansh. One of your other peers, the international one, is coming up with a five megawatt platform for next year. What are your thoughts on that? And are you also planning to have a five megawatt follow-up, followed this, after the four one?
No, you know, what's important for us is cost of energy. We are not driven by nomenclature of turbines or six megawatt or eight megawatt or twenty megawatt and thirty megawatt turbines. India is a Class III site, a low wind site, and to that extent, if we can launch larger blades on our two megawatt product or our three megawatt product, that would be far more cost efficient than any other larger turbine. Having said that, the product which we have, which is 4.X, which is virtually four and a half, five megawatt turbine, it's got one of the largest rotor diameters in the industry, with the potential to add larger rotor diameters.
So to that extent, I see, I don't see a product above that which we need to launch in the near future, but yet we have access to enough technologies. As we feel it's appropriate, we will bring them to the market.
... Great! And any insights or updates on the cement business, any color on that that Inox may be going for it or something like that?
So I don't think I would like to talk about that publicly. What I've read in the news is there are some people looking at it. Yes, we have evaluated that. You know, but we have a very, very prudent capital allocation policy. No matter how much cash we have ability to raise, no matter how much cash we raise, we are not gonna stretch ourselves. We're gonna be very, very cautious. I think organically we can build this business out phenomenally on the manufacturing side. On the O&M side, we have created tremendous value in Inox Green. We've made a strategic investment in another potential acquisition. I think that's more important for us. We, you know, our financial metrics typically remain four to six times.
We are not competing with people to buy companies at thirty times, forty times, fifty times. That's not something which is the ethos of the Inox Wind Group, and I think we are on a very, very strong growth ticket, both in wind and green, and I think we should be able to create enough value across that.
You're right. Brilliant. Thank you so much, and wishing you guys all the very best.
Thank you, Sri.
Thank you. We'll take our next question from the line of Raj Kumar from Finvesta. Please go ahead.
So congratulations on the good set of numbers. So my question is, in one of the interview, I followed you on media, and in your last concall also, you said that, FY 2026 guidance of 200 megawatt will have a upside risk. So do you want to quantify that, upside potential?
No, we will not be quantifying that. We just said that we have an upside risk. What we've done at this point in time is we've upgraded guidance for this year from 15% to 17%.
Sure. And so next year, this year, what could be the realization per megawatt? I think six crore per megawatt was what was said in the last some con calls. So what I'm seeing in last two quarter results, that the realization per megawatt is slightly lower.
Yeah. So as we had explained in the previous participant question as well, that in the first half, there was more of supplies of the turbines rather than the EPC. So the realization of EPC did not happen, which will happen in the second half. So you will see our overall four megawatts realization moving closer to the 6.6 crore per megawatt which you have.
Okay, sir. And do you see any risk in achieving what you have guided for, sir, for this year or next year? Any risk?
No, we don't see yet as such any risk. You know, the way wind factor right now is going on is very positive. I think lots of customers are also getting ready with their own development. We are ready with our own development with the pipeline, as Himanshu also highlighted earlier. So don't see perhaps any risk and with respect to demand or with respect to execution.
Okay. Thank you. Thank you, sir.
Thank you. We have our next question from the line of Nidhi Shah from ICICI Securities. Please go ahead.
Hi. Thank you so much for taking-
We cannot hear you, ma'am.
Hello, am I audible now?
Yes, please go ahead.
Yes. Thank you so much for taking my question. I just had one on the lower interest that we're seeing this quarter. So is this something that we would see for the rest of the year as well?
Can you please repeat the question, Nidhi?
We are seeing a much lower interest payment this quarter as compared to the previous one. Is this something that we would expect for the year going forward as well-
Yeah.
for the remaining two quarters?
Yes, and so we have already, you know, like we mentioned, that we have become the net cash company now. So going forward, you know, we'll have, like, only BG insurance charges or the LC insurance charges kind of expenses in our profit and loss, and firstly there will be finance cost, but not the interest expenses, and that also will be offset by our interest earnings from the investment and our surplus cash. So drastically reduced. Yeah. Interest cost is drastically reduced every quarter. So we make our further interest earning. Yeah.
Okay. Okay. Thank you so much.
Thank you. We'll take our next question from the line of Abhishek Nigam from Motilal Oswal. Please go ahead.
Yeah, hi. Thank you so much. Just wanted to check, you know, how are you thinking for, you know, beyond FY 2027, and now that you are net cash, there is more cash getting generated. So, you know, what is the plan for excess cash? So that is my first question.
Abhishek, yeah, just that, as I said publicly, or I've said in many of the investor meetings, we will be very cautious. We are growing massively, so while it's caution, but we're growing massively. So we've gone from four hundred to eight hundred to twelve hundred to say, two gigawatt. Let's see how the market plays out. If it's gonna be a ten gigawatt market, we're gonna be far larger than two gigawatt. So we're not holding back on two gigawatt, number one. Number two, we would carry cash at all points in time equivalent to at least a quarter of outflows for us. So let's create that. Let's be there. Once we have that, we would have a dividend policy in place.
We have that across most of our group companies, and I'm sure the board of Inox Wind will also, at the appropriate time, decide a dividend policy. As you may notice, we are also strategically backward integrating into low-hanging fruits, high-margin businesses regarding to cranes. We're doing value addition through platforms and other similar measures. But we are very prudent in capital allocation. Some of the new plants we are building now are on lease. It's cheaper to lease them than build, and the interest saving is more than just leasing them. You know, we would like to be in a position where there's a lot of cash on the balance sheet. I think that's what we're looking forward to, and then we'll see what needs to be done thereafter.
How should we factor in the interest expense going forward?
I think that's gonna come down drastically, and it's come down drastically every quarter. Q3 should be sharply down from even Q2, and I would assume by Q4 should be virtually zero if not net, net, net earnings.
Right. Just one last one from me. So, you know, you talked about the consortium. So how does that help in terms of working capital and, you know, other charges? Any color on that would be helpful.
Ladies and gentlemen, we've lost the management connection. Please stay connected while we reconnect them. Ladies and gentlemen, we have the management team back on call.
Yeah, I think the question was with respect to the consortium formation. So as you have, you must have noted in our press release, the consortium is all there without any corporate guarantee, without any collateral from any of our group company. And to that extent, it means that the company has been, you know, well accepted in the banking community now. And, as and when the, as KT mentioned, there would be more and more business coming up, we keep on adding more and more limits and more and more banks in this relationship. So to that extent, the need of the company for efficient working capital management will be always maintained. And to that extent, you know, we'll all of course bring down the working capital cycle as efficiently as possible.
And, naturally it will also help us in interest and banking charges reduction.
Yeah, that, that's very helpful. Very clear. Thank you so much.
Thank you.
Thank you. We'll take our next question from the line of Harshal Sethia from Edelweiss Investment. Please go ahead.
So what kind of CapEx are you planning in FY 2025 and 2026?
So the CapEx will primarily be on the molds, which we are purchasing for our larger grades. That's around 50-75 crores for both the years.
So both years included is INR 75 crores?
So for annual.
For annual and maintenance CapEx?
That's roughly around 10 odd crores. It's included in this number.
Okay, included in this number. Okay, thank you.
Thank you. We have our next question from the line of Chandan Mishra from Finvesta. Please go ahead.
First of all, I want to congratulate you on your good set of numbers, sir. Most of my questions have been answered, sir.
Thank you. Thank you.
Thank you. We'll take our next question from the line of Utkarsh Somaiya from India. Please go ahead.
Hi. Thank you for the opportunity. I just wanted to ask you about your tax rate. So I think you mentioned earlier that it's going to be nil for FY 2025 and 2026. Can you please confirm that?
Yeah. It would be nil for FY 2025 and FY 2026 jointly.
Sorry, sir, you are not clearly audible. Can you repeat please?
That's correct. That's correct. Your understanding is correct, sir.
For FY 2027?
The tax rate would be 25%.
For FY 2027. Okay. And just to confirm, and sorry to be repetitive, that for FY 2026, you plan to execute 1,200 megawatts at six crore per megawatt, with a 17% EBITDA margin. Is that right?
Roughly. That's right.
Roughly.
six crores, approximately. That's right.
Net of other income and interest will have zero outflow, right?
Yes.
On the tax side, yes.
Okay. Thank you so much, and good luck with the execution.
Thank you.
Thank you. Before we take the next question, we'd like to remind participants to press Star and One to ask a question. Next question is from the line of Alisha Mahawla from Envision Capital. Please go ahead.
Hi, sir. Good evening. Thank you for-
Ma'am, we can't hear you. Please use your handset mode.
Am I audible now?
A little better. Can you use your handset mode, please, and speak a bit louder?
Sure. I hope this is audible.
Yes. Please go ahead.
Great. Yeah. Thank you for the opportunity, and congratulations on the great set of numbers. Just would like some color on, the competitive intensity, because we, what we are reading is that some Chinese players are becoming competitive again and maybe setting up more capacity. While we do understand that there is ample demand and work for everybody, very soon it can turn into, maybe aggressive pricing and impact on margins. So your thoughts on that will be helpful.
Look, let's try and understand. First and foremost, there's space for at least five large players. Currently, we're down to two or three players in the Indian market. Having said that, more than 50% of the Indian market requires turnkey. The Europeans, the Chinese are not party to that. They don't have the execution capability, they don't have access to sites, they don't have land banks, they don't have connectivity, so they're effectively out of that. That's really a duopoly in that market, 50% of the Indian market. The remaining 50% is equipment supply. Now, in equipment supply, effectively, currently we have, we've had umpteen Chinese come in, so far, less than 1% of market share.
We've had a new player come up two, three, four years ago who's executed about 1,200 on the ground today, which would be about 3% of the market. I mean, from what we understand in terms of pricing, we're as competitive, probably more competitive than him. You know, people may announce newer products, newer plants, doesn't matter. We are bringing out the right products which are relevant for the Indian market, where the cost of energy is the least. There's no point taking out a 5-megawatt turbine with a 160 rotor, where on a 4-megawatt you can take out a 180 rotor. That's gonna be lower in terms of cost of energy, number one. Number two, setting up new capacities is the least of issues. We have a 2.5-gigawatt pipeline manufacturing capacity, I apologize.
We're setting up new plants together for more growth, for non-uniform growth. We're locating plants strategically to reduce our cost of logistics, and I think to that extent, we are very solidly placed. Don't forget, we also have domestic content requirements kicking in, in the wind industry, thanks to the guidance from NITI Aayog, so effectively, what's happening is we're going to be competing on A-grade quality, then we are on par or far better than anybody else. We are not really looking at competing for C-grade quality orders or C-grade customers, and to that extent, you know, certain players are more than welcome to pick those orders up.
Are we seeing, say, large corporates maybe thinking of setting up own capacity just to and then just outsourcing the turnkey work? In that case, will-
I don't think so. Barring one or two corporates, you know, I don't think anybody's doing that. We're in discussions with most of the large corporates. It's a very complex business. This is not a solar module manufacturing business where you can set it up in six months. We're doing that in the group as well for our captive requirements. Wind is complex. The supply chain is rocket science, if I may say so. Certification processes are two years. So, you know, it sounds very easy. One of the large guys in India did announce this in two thousand and nineteen. They, in fact, launched their turbine in two thousand and twenty-three. Another guy announced, supposedly announced, a very large Wind 4 in 2018, did not move until 2023.
It's probably going to be two years out before they move, and the product they plan to launch is outdated by the time they launch that. So effectively, I think we've built a very, very strong moat in the wind business. It's not something which you can replace just with money.
Understood. Is it right to assume that 100% of our supply chain is domestic?
No, we don't have 100% of our supply chain. We never assumed that. We never said that. We have a global mix between India, China, Europe, Korea. We are in compliance with all the laws. I will not disclose the exact percentage at this point in time, but, given whatever guidances is coming from NITI Aayog, we're fully in compliance with that. Capable of doing much more. But we leverage our global supply chain to take advantage of the lowest cost products as and when we need them at the right quality.
Understood. And just one last question on your balance sheet. In your opening comments, it was mentioned that, you know, you just spent last six quarters in, you know, strengthening the balance sheet and, repaying debt and, strengthening the cash flows. Where should we see the cash conversion cycle going from here? Is there scope for any improvement? Is there an ideal target that we want in terms of inventory or debtors? What would be the roadmap for that?
Mind you, we've seen this for the past six quarters. Our cycle is only improving quarter on quarter on quarter. We've done net cash positive. From operations itself, we've done cash positive, and I think we've done this after seven and a half years. I would give kudos to the team for doing a phenomenal job. We are walking the talk. We're in fact beating every guidance we're giving out in the market for the past six quarters. So I'm surprised you asked when we see cash flow. Having said that, we've also stated we expect significantly cash flows to increase as we get into quarter three and quarter four.
Sorry, my question was not on cash flows, on the cash conversion cycle, your working capital cycle.
Our working capital cycle has continuously come down. So if you look at two years ago, we're probably at a thousand days. We're now down to sub two hundred days. We publicly guided for ninety days of working capital at the end of this financial year, once we get a full financial year, and we are very well on track to do that. I think, in fact, we're ahead of, ahead of the curve in getting to that target.
Understood. Great. Thank you, and all the best.
Thanks, Alisha.
Thank you. We have our next question from the line of Ketan Panchal, an individual investor. Please go ahead.
Hello there. My name is Ketan Panchal. I have invested all my money-
Can you put me on handset mode, please? Your voice is not very clear.
Hello there. My name is Ketan Panchal. I have invested all my money in Inox Wind . I'm very happy with your excellent business. I'm hoping to ..., soon on investment. I just want to say thank you.
Thank you. God willing, we'll create more value for you.
Thank you.
Thank you. Thank you.
We have our next question from the line of Anuj Upadhyay from Investec. Please go ahead.
Yeah, hi. Thanks for the opportunity, and congrats on a good set of number. My question basically relates to the restructuring across the RESCO. When would the asset get transferred to the RESCO, that is the substations, and when do we plan to procure the cranes and put to the commercial use?
So, based upon the board approval, that will get transferred within, you know, next one year or so, and the crane business we have already got started, the ordering has been done, and now that crane business will start in this entity.
Okay, any broad number which you can share? How much would that, how much crane we plan to procure, and how much contribution would it have at the top line and at a margin or EBITDA level at the consolidated entity?
Broadly, you know, we cannot give a specific details, but that will add, you know, the margins which is made by many of the crane vendors. We are taking the crane from various vendors. Some of them are listed as well, so that is available in the public domain. We will able to save that much cost in our, you know, and that will immediately add in our EBITDA margin.
Got it. And this could be used for the third party as well, right? It's not purely for a captive purpose.
Partly it is for the captive consumption, but the spare capacity which we will develop will be used for the third party as well.
Thank you. That's useful.
Thank you. We'll take our next question from the line of Pratik Giri from Shubhlaxmi Research. Please go ahead.
Hi, Devansh. Am I audible?
Yes.
Yes, you are. Please go ahead.
So, my question is to Kailash. Kailash, I just wanted to understand regarding our top-line profile and margin profiling. So what I can see is in H1 FY 2025, we have done around 1,370 crore of revenue over 23% EBITDA margin. Now, when we say that in next two quarters, we'll be increasing the EPC revenue, which is actually high margin than turbine supply business, turbine supply revenue. So I'm sure I'm correctly something-
I'll just cut you off there. You're incorrect on that. EPC business is a much lower margin business, compared to our equipment supply business.
Got it. Got it. And in terms of top line, it's bulky, bulkier than turbine supply, is it?
No, no.
No, no, no. So broadly, out of the six crores per megawatt, one to one and a half crores is related to EPC.
Around 20%-25% maximum.
Yes. Got it. So in the next half, we'll be executing around 500 megawatts of business, and as per the thumb rule of six crores per megawatt, we'll be hitting around 4,500-4,800 crore of revenue. Is that understanding correct? Broadly, yes, because based upon our guidance, we in megawatts of acquisition, six crore. You can consider six crore per megawatt. Some of them are commissioning at the same time. Yeah. So but there might be some timing difference for the commissioning. So plus/minus 10%-15%, your understanding are correct. Okay, so going ahead, realization per megawatt should increase and margin should also, realization per megawatt should increase, and margin should decrease, correct? Yes. Yes. That's it from my end.
We have already given the guidance for the full year, which is around 17%, so that will fall in place accordingly. So might be as in some quarter, it would be higher, in some quarter, you know, it would be compared to in line with 15%, 16%. So we need to see the, you know, whole year guidance of 17%.
Which we've updated in 17%.
Yeah.
It was 15, which we've updated now to 17%.
Understandable. Understandable. I have one request to make, Devansh. If you can share the order pipeline, you know, I mean-
Sorry, we will not be able to share that. We appreciate, but, you know, for competitive reasons, that's not possible to share. We are talking to the largest PSUs, we're talking to the largest IPPs. I think it... You know, you need to leave certain things to the management. We can't put everything out in the public domain.
Understandable. Understandable. Congratulations on this set of numbers. Thanks for taking my question.
Thank you. We'll take our next question from the line of Krupa Desai from Elixir Capital. Please go ahead.
Hi, sir. Firstly, congratulations on the set of numbers. So my question was, so currently India is lagging behind the power evacuation infrastructure because of mainly transmission delays. I know we have a very good order book, but do you think because of this issue, new capacity executions could delay or get impacted?
No, currently, you know, the moment we are talking about, as we said, we have a project development pipeline, and we know that where we have our own connectivities or where customers have their own connectivities. Most of these guidance, which we have given for next one or two years, we already have our own substation and sub ready, where it is mostly plug and play. So don't see that becoming an obstacle or hindrance in terms of execution. But as we go, for even the future, we continue to develop our pipeline ahead of time. I think that's very important. And just to add to Kailash, unlike, you know, you could have a quarter here or there, but unlike some of our competitors, we are building the pipeline ahead of schedule.
So we're not taking an order and then suddenly saying, "Oh, we are one year behind. Oh, the connectivity doesn't exist." We are saying what we believe we will do, where connectivity exists or where it's in final stages of happening. It's not something which could be one year away. It could be a quarter year or there. So I think to that extent, we have a very strong project pipeline and a good mix of turnkey and equipment supply.
Okay. Got it, sir. Thank you for taking my question.
Thank you. We'll take our next question from the line of Pawan from Geojit PMS. Please go ahead.
Yeah, hi, team. Congratulations from my side as well. Just one question. So all the orders that we are discussing as of now, they are for FY twenty-seven and beyond in terms of deliveries, or we are, are we discussing something for FY twenty-six as well as of now?
Sorry, we could not hear you. Can you repeat, please?
I'm saying, all the order, new order, flow discussion that we are having with our clients now, they are for FY 2027 delivery, FY 2027 and beyond in terms of deliveries, or are we discussing anything for FY 2026 as well?
Primarily FY 2027 and beyond, but it depends, you know. We have the flexibility to play 200-300 megawatts for... Depends, you know, it's something frankly relevant. But yes, we are really looking at FY 2027 onwards.
Yeah. Currently, we, the kind of orders we have, it's a mix in terms of execution. Some of them to be executed in less than one year, some of them to be executed two years. So we have some flexibility available in quarters. So depending upon customer relationship, client requirement, we are mixing it up well, and some of them could be execution in less than eighteen months, but mostly could go beyond eighteen months as well.
Essentially, what I'm trying to understand is that when we say twelve hundred megawatts of guidance for next financial year and possibly upside to that, are those orders already in the bag, or we are still out there to
We already have an order book of 3.3 gigawatts. To that extent, if you're doing 1,200 this year, 800 this year, and if you're doing broadly 1,200 next year, we already have the entire order pipeline visible for FY 2026.
Okay. Good. Great, great, Devansh, and congratulations once again. Thank you so much.
Thank you.
Thank you. Ladies and gentlemen, we'll take that as the last question for today. On behalf of Motilal Oswal Financial Services, that concludes this conference. Thank you for joining us, and you may now disconnect your line.