Inox Wind Ltd
NSE:INOXWIND
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
66.64
254.34
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Inox Wind Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the Inox Wind Limited Q1 FY '21 Earnings Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Puri from Axis Capital. Thank you, and over to you, sir.
Yes. Hi. Thank you, Al. Good evening, ladies and gentlemen. On behalf of Axis Capital, I'm pleased to welcome you all for the Inox Wind Q1 FY '21 Earnings Conference Call. We have with us the top management team represented by Mr. Devansh Jain, Executive Director; Mr. Jitendra Mohananey, Group Financial Controller; and Mr. Narayan Lodha, Chief Financial Officer of the company. We will begin with the opening remarks from Mr. Devansh Jain for the operational highlights and key updates for the sector, post which Mr. Jitendra Mohananey will highlight the key financial performance of the company. This will be followed by the Q&A session.With that, I hand over the floor to Devansh. Over to you, sir.
Hi. Good afternoon, everybody. Thank you, Abhishek. I'm going to take everybody through a little bit of the operational highlights, some fundamental changes, which have taken place in the sector in the past 3, 4 months. And then I'll hand over to Mr. Mohananey to take you through the financials, and then we'll open the floor for some questions.
Mr. Devansh, I'm sorry to interrupt, but your voice is very low, request you to come closer to the mic.
Is this better?
Yes, sir, please go ahead. Thank you.
So overall Q1 FY '21, most of our manufacturing operations remain suspended due to the COVID-19 lockdown and the shortage of manpower and supply chain issues. However, in June, post Unlock 1, we started getting manpower back in the plants and raw material availability started easing with logistics movements. And since then, we have been continuously ramping up our operations, month-on-month over June and July. We are now running our operation at a fairly healthy level, say for the fact that monsoon is pretty heavy in Gujarat due to -- rather than that, our manufacturing plants are now running at a fairly stabilized level. We are executing and producing turbines continuously now and executing orders for multiple projects, including Continuum, Adani and so on and so forth. I think we did brief people in Q4 that we strategically tied up new manufacturing units. Happy to inform that over this quarter, which has gone by, in spite of the COVID impact, we have stabilized that unit and has commenced manufacturing operations there. And we intend to increase operations as we keep moving forward.We have a very healthy order book at this point in time, so we have a clear visibility in terms of revenues going forward. We've also taken an enabling resolution in the ensuing Board meeting, which took place today, to raise funds in both Inox Wind Limited and its wholly owned subsidiary, Inox Wind Infrastructure Services Limited. We are primarily taking these enabling resolutions to ensure that we gear up for the upcoming growth in the wind sector. I'll touch upon that in the next minute or so.With respect to a few changes which we've seen, which fundamentally paves the way for the wind sector now to bounce back in a meaningful, sustainable manner, I think we did brief all our investors in Q4, but most of the transition period pain of the sector is now behind us. Policy guidelines are clear. Great availability in many places is more or less there. And a lot of other places, the green energy corridor are in different advanced stages of being set up. Having said that, the ministry had finally acceded to the demand of the industry which was to remove the upper caps in the wind auction. And in the first auction, which was SECI-9, which took placed recently, where tariff caps had been removed. We saw that the recent tariff discover for wind projects was INR 3. Let me remind you that this SECI-9 enabled 80% of the capacity to be wind and 20% to be solar.If we go by that logic, we broadly believe that the discovered tariff for wind would probably be close to INR 3.1. We've, many people in the industry, along with us, we broadly believe tariff should probably be around INR 3.15 for everybody in the value chain, which is IPP, the DISCOMs, the OEMs and bankers to be in a win-win situation, and I think that is something which we are reaching towards. It's also heartening to know that with more and more focus on Atmanirbhar and domestic manufacturing, there is more and more focus on the wind sector to substantially ramp up, and realization in the ministry and in the government that certain steps were urgently needed to get the wind sector back in action. And I think a lot of them have now finally been implemented.The government also took another proactive step in terms of waiving of interest rate transmission charges for wind and solar projects, which earlier expired sometime in 2022. That period has now extended to June 30, 2023. So that's an extension of an incremental 1 year, which will enable more and more renewable energy projects to come up on the ISTS corridor until then. I think these fundamental changes enable the sector to bounce back.Another point which I would like to mention is we are now in advanced stages of launching up 3.3 megawatt turbine. Various components are now manufactured at various sub suppliers. Some of them are in different modes of being shipped. And I think over the next very few months, we should have the first few turbines of our 3.3 megawatt up and commissioned.With that, I'll leave the floor to Mr. Mohananey to take you through the financials. Thank you.
Thank you very much, sir. On the front of financial performance, just to tell you, revenue and margins were impacted due to COVID-19 lockdown. Revenue and EBITDA compared to preceding quarter, revenue of INR 97 crores in Q1 FY '21, against the revenue of INR 189 crores.
Mr. Mohananey, we can't hear you.
Pardon?
Yes, sir, we can hear you now. Please go ahead.
EBITDA loss of INR 26 crores in Q1 FY '21 against EBITDA loss of INR 177 crores in Q4 FY '20. Overall continuous improvement in working capital cycle INR 109 crores in quarter 1 FY '21 as compared to INR 152 crores in Q4 FY '20. We have continued to be stable net debt quarter-on-quarter INR 645 crores in Q1 FY '21 as compared to INR 634 crores in Q4 FY '20. The net debt-to-equity ratio also remained stable at 0.4x as compared to 0.38x in Q4 FY '20.On the balance sheet front, there's overall improvement in net working capital, which I have explained. So with that, I think we can have a question-and-answer session.
Hello?
[Operator Instructions] The first question is from the line of Mohit Kumar from IDFC Securities.
Sir, I have 2 questions. Sir, first on the Slide #8 where you have mentioned that the -- you're expecting a revenue of INR 80 billion over the next 24 months. So how confident we are for all of these numbers? And secondly, on the same lines, the Continuum, I'm expecting the Continuum should be credited over next 8 to 9 months. And sir, thirdly on this -- secondly on the LOI of 3.3 megawatts for Adani, when do we expect this to get this asset into firm contract? And third question, sir, how much yield you're expecting higher from 3.3 megawatts compared to current machines given everything is same?
Mohit, thank you for your questions. You started with 2, but there are actually 4 or 5 questions. I'll try and answer all of them. I think your first question was with respect to the revenue visibility of about INR 8,000 crores. Look, as I fundamentally said, the sector has now finally started to bounce back. Tariffs have started moving up. Policy guideline issues are behind us, more or less. Grids have started getting readied in most places or are now in commission state in some places, such as ours for about 750 megawatts.With respect to our SECI-1, as you're well aware, we have 1 SPV, which is still to be commissioned. We are awaiting approvals for that. So that should translate into revenues. SECI-2, we finally received or have been confirmed further extension periods given the grid delay. So I think this is something which definitely should get executed.We have the Continuum order, which is being executed at this point in time. We have SECI-3, SECI-4 where -- and also a lot of the Adani LOIs and some other retail orders. Broadly, look, it's very hard to give you a probability. But in all certainty, over the -- as the sector is now bouncing back, putting aside the COVID issues, I think the revenue growth for wind should be very, very strong going forward. And I would tend to think if it's not 2 years over the next 18 to 30 months, this is something which we should be able to do. Point number one.I think your second question was with respect to the yield of the 3.3 megawatt turbine. So if you compare that with respect to our 2 megawatt turbine, depends which model you compare it to. But if you compare it to say a -- if I just give you a broad example, we had a 93 rotor earlier on a 80 meter hub height on the 2 megawatt. When we launched the 100 meter turbine, yields increased about 15%. Then we went up to the 113 turbine, which went up by another 15%. And then we went up to a 92 hub height, it increased by another 10%. So broadly, if you bring in a 3.3 megawatt turbine, which is a 146 rotor on a 120 tubular tower, which is what we intend to launch, then the probable yield on 113 versus 92 will increase upwards of 40%.Your third question, I think, was with respect to the LOI from Adani. Look, obviously, it's an LOI, which needs to be implemented at some point in time. And for that, we need the 3.3 megawatt turbine in India. I think we've mentioned this earlier as well. It was extremely important for us to finish off all the inventories, the old turbines, which were in our system. Thanks to the 3 years of pain in the system and the transition from FIT to auction. There's a hell of a lot of inventory. There were a hell of a lot of inventory in receivables, which was blocked. I think a lot of that is now virtually behind us. We're down to the last 50 to 60-odd megawatt, which is also being implemented across various retail orders, as we speak, over the course of this financial year.And in fact, for many of the new orders, which we're implementing from Continuum and others, we're actually now we are importing newer and newer inventories, given we've run out of -- we've used up most of the older inventories in the system. So I think as soon as the 3.3 route in the near few months, I think this should get implemented into orders, which we should execute over the next couple of years. I think they have a very, very large vision in terms of volumes. So this is a very small part of the larger vision we have.Mohit, I forgot. You had a fourth question...
And lastly on Continuum order, you did -- can we expect this to -- getting to the next 6 to 8, 9 months?
Well our plan is to execute the entire order within this financial year. It's broken up into 2 phases. I think Phase 1 is in advanced stages. We've -- assuming have seen -- in June, we supplied about 10 megawatts. That should -- including the problems of COVID not having manpower and supply chains, but on a month-on-month basis, production and execution is continuously ramping up. So I think over the next 6 to 8 months, certainly this should be implemented.
The next question is from the line of Pranav Udani from Kaytee.
I have 2 questions. One is regarding the 125 megawatt order from Gujarat Fluorochemicals, which I believe you received the advance of approximately INR 850 crores for. Could you share some more details on that? And the second question is regarding the O&M business. And we have lost approximately, I think, 300 WTGs O&M contracts. So if you could share more details on that as well.
So with respect to the order from the Gujarat Fluoro, that's something which we are implementing. Earlier, it was for a 2 megawatt product, and then actually it was shifted to a 3.3 megawatt turbine, given it made more sense for them to increase yield and, from a cost of energy perspective, it drastically improved returns for them. Given the fact that we've virtually used up much of the old inventory of 2 megawatt, they were kind enough to accept and convert this into 3 because it made no financial sense for them. That's something which we intend to start executing from Q4 of this financial year. We already have the land available and the substations and the transmission lines built for that. So that's something which will play out from Q4 broadly, number one.With respect to your question on we've lost about 300 megawatts. Yes, that's something which has happened over the past 2.5 years. Some of it is due to the fact that certain IPPs have taken strategic calls of continuing O&M completely in-house, which is a global strategic call they've taken. Some of them obviously left us at different points in time due to the pains in the wind sector. But I'm happy to inform you that a few of them have already come back in our fold. We, at this point in time, continue to do turnkey O&M contracts for about 2.3 gigawatts out of the 2.8 gigawatts, which is installed in India. And of the 500-odd megawatts which did leave us, which is about 250 turbines, we continue to provide shared services and also supply spare parts to them on a case-to-case basis.
[Operator Instructions] The next question is from Ketan Gandhi from Gandhi Securities.
Yes, Devansh, can you please throw some light on SECI-2, 3, 4 extension and down selling and -- I mean, physical overview? Hello?
Hello?
Yes. Devansh? Did you...
Sorry, who is this?
Ketan Gandhi from Gandhi Securities.
Yes. Sorry. Yes, Ketan bhai, good to hear your voice. You're a regular in all our calls and a long-term investor. Coming to SECI-2, we've finally been communicated, we have been given an extension of about 11 months. That's what I believe. I think the letters are being drafted. We should have the letter with us in the coming week or so. And then we should be implementing SECI-2 project. That, by the way, is without any LDs or without any tariff reductions. So we have a fairly healthy time line to execute now those orders.
Down selling...
With respect to SECI-3 -- I'll come back to you in a second. With respect to SECI-3 and SECI-4, as you're well aware, for SECI-3 and SECI-4, the Bhuj substation, while, of course, we have 750 built in we can commission, but technically speaking, the Bhuj 2 capacity of the grid still needs to be ready. So actually, that is expected to be readied in June '20. But looking at how projects are implemented, I think that would be delayed by about 4 or 5 months. So -- and we've already been given extension until 2021, subject to this being readied by December. I believe this would still take 4, 5 months. So we have a hell of a long period. I mean as I mentioned, we have a fairly healthy order book. Within that 2-, 2.5-year period, I think we have a long enough time to execute SECI-2, 3 and 4.Coming to down selling, look, I think we've always maintained for strategic and confidential reasons, we can't talk about that. But there is -- please understand that there is a shortage until now of a ready -- infrastructure-ready grid. As you may be reading in newspapers, there is tremendous interest, and on a weekly, if not -- and on a monthly, if not weekly or daily basis, we're hearing of larger platforms being treated, newer pension funds coming, besides the fact that people like Adani Green, JSW, Tata, NTPC have announced massive plans on the renewable energy side. So when you look at what we've done on the ground, we already have the grid ready. We already have the IPPs now in hand. So these are more or less risk-free projects for people to do on a plug-and-play basis. So we have a whole host of people, be it IPPs or pension funds, who are ready to buy these projects once we build and sell it so. I think, I don't see any challenge in do that as we keep moving forward.
So basically, what you are trying to convey is, basically, we have to first build and then we can sell. It will...
Not exactly. As I mentioned, of course, SECI-2 is not built right now. SECI-2 has to be built. We've built SECI-1, we found enough investors. There is -- for one of the SPVs which we still end up owning in SECI-1 for which we're waiting commissioning approvals, we have multiple buyers lying ready to buy that asset. And as we keep moving forward, now that we have the extensions coming in high for SECI-2, there is enough demand in the market for people to take this so called greenfield yet brownfield projects.
Okay. So that 50 megawatt, which we have in our bucket is knocked off or still we are having that?
No. Well we need commissioning approval for that. I think in the next 15 to 20 days, we're expecting that order to come out. Once we do that, we would immediately commission and turn it over to somebody. We have multiple buyers inline for that SPV.
Perfect. That's very helpful. And one more question, the fundraising of INR 200 crore, which we are planning to do in Inox Wind as well as IIFSL (sic) [ IWISL ]. Is this the part of that monetization you were talking previously?
No. So there -- so these are different things. Earlier, the monetization was -- so yes, and no. So there are 2 things which we have taken in this Board meeting. We've taken an enabling resolution to raise up to -- not INR 200 crores, it's up to INR 200 crores in Inox Wind Limited and up to INR 200 crores in Inox Wind Infrastructure Services Limited. These are simply enabling resolutions. In IWISL, which compose the entire O&M vertical and the EPC vertical, we are in discussions with various investors. That's something which we should be coming back to briefly soon, and that's somewhere where we should probably be raising some capital in the near future.With respect to Inox Wind itself, we're looking at a private placement of securities going forward from the perspective that we are looking at raising some confidence buffer growth capital in the company. Simply because we believe the sector is now at a threshold where you're going to see very high growth, number one. And number two, we want to be ideally suited to play our part in that with the 3 megawatt turbine.
[Operator Instructions] The next question is from the line of Vinod Kela from AV Fincorp.
I wanted to understand viability between solar and wind power. So there is a INR 0.50 difference between tariff. So our PPA has been -- is signed on wind side or are we facing challenges on that for industry purposes?
So firstly, we are not facing any challenges. We don't have any PPAs pending. All our PPAs are in place for the bids that we won. Having said that, let me correct this misnomer of wind versus solar. First and foremost, it's renewables versus thermal. And it's a foregone conclusion for now, for a year or more than a year that globally, there is a complete transition taking place from fossil-fuel-based power to nonfossil-fuel-based power simply because the marginal cost of nonfossil-fuel-based power, which is a renewable power, is now cheaper than fossil-fuel-based power across the world, number one.Number two, when you talk of solar being at say INR 2.5 and wind being at say INR 3, please understand those solar tariffs are with various pass-throughs. The right way to compare this is to look at what is the solar tariff for domestically produced modules. And if you notice, in the recently concluded 6 gigawatt bid, for domestically manufactured solar panels, which was run by Adani Power, Adani Green Energy, the tariff was INR 2.93, INR 2.95. So if you now start comparing INR 2.93, INR 2.95 versus, say, INR 3, it's more or less INR 0.05, INR 0.10 here and there will always be there. Sometimes wind could be cheaper, sometimes solar could be cheaper, number one.And let's not forget that INR 2.93, INR 2.95 is a tariff discovered of 4 gigawatts of manufacturing and 6 gigawatts of manufacturing. So prima facie, wind in that sense is now going to become cheaper than solar, which it did in the Middle East as well. If you look at what's happening globally in the Middle Eastern states where solar is -- where the sunlight is very strong. Globally in Europe, U.S. and so on and so forth, wind is still the preferred option. And wind is still cheaper than solar.
Okay. Got it. Sir, second question is regarding this land problem in Gujarat. So Gujarat government has still not signed the orders. So what is the status there, sir?
So this was an issue which had been there for about 1.5 years. It kind of got resolved last year. So the Gujarat government has allowed to allocate land and give developer permissions to people for SECI-1, SECI-2, SECI-3 and SECI-4 tranche projects. Beyond that, when SECI-5 and so forth were bided out, it was made clear that this has been done at the risk of developers. And many of them had planned to implement these projects in different parts of the country. So to be honest, I don't personally think that's such a big issue. But yes, there are 1 or 2 or 3 players who still want to implement their SECI-5 and beyond to the Gujarat. And I'm sure the government, MNRE, and various people are in dialogue to get this resolved in the near future.
And sir, certain bookkeeping question. So what is our receivable more than 365 days, gross receivable?
Mr. Mohananey, do you have that data with you?
No. Right now, I'm not carrying that data with me in respect of the aging of the receivables, but we can provide that off-line.
Sure, sir. And sir, what will be the gross debt number?
Pardon?
Gross debt number.
The net debt is INR 640-odd crores.
And what about gross?
The gross debt would be about INR 800 crores, approximately.
INR 800 crores. Okay, okay.
I don't have the exact number, but broadly. We look at the net debt picture because that's something which we are working towards kind of minimizing or making 0 eventually.
So sir, what kind of interest we can expect going forward? So this quarter, we have seen a reduction of some 65 -- so around INR 45 crores quarterly now. So this trend will continue or it will reduce further?
Vinod, like I mentioned, we have various projects now being executed. We have an SPV of virtually INR 300-odd crores lying in the system. As we commission that, monetize that, a lot of liquidity should come into the company. And I think with all that liquidity, we'll -- our primary focus will be to keep reducing debt. So I think over the next -- over the course of this financial year, our goal is to virtually minimize all external borrowings in the company.
Okay. Sir, last question, we have spent INR 600 crores in last 3 years, CapEx. So this is mostly on common infra substation or grid connectivity. Just wanted to understand how we are going to monetize this. So whether we are getting any yield if -- or how we are going to monetize it?
Look, so that's more a bookkeeping question, which maybe you can get off-line with our finance team. They'll explain it to you. So it's not CapEx, which fundamentally we do. Basically, say, a turbine is sold for INR 6 crores, INR 4.5 crores is say the turbine price, INR 1.5 crores will be the EPC price. Then there's a common infra price in it, which kind of gets capitalized in our book because that's a common in such, it's not owned by anybody. It's not owned by the customers. It's not owned by us. But it still resides on our balance sheet because we are the trustee of that common infrastructure. So effectively, it's not that we are spending that CapEx in terms of our money. We get paid for that by the customer, and it kind of gets depreciated and written off over a period of time, number one.Number two, yes, to the extent that we've built a 750 megawatt grid and utilized only say 200 to date. Naturally, to that extent, we spent upfront in building line substations, say, INR 100-odd crores. But that is something which will hold us in good stead and get monetized over this year and next year. So for example, we have a 50 megawatt SPV which still needs to go out. Once we do that that that's virtually INR 300 crores of liquidity for the company. Number two, we have the Continuum order of 250, which is being executed. That's been done on a plug-and-play basis. So the order value is fixed, but there is no incremental CapEx on the line substation, et cetera. We keep in -- so it increases our cash flow. And then after Continuum, we still have another 250 megawatts of grid available, which will get utilized towards SECI-2 and various other projects as we keep moving forward.
Sir, I'm just trying to understand how we get money. So we get extra money apart from the sales, we -- like suppose INR 6.5 crores...
No, no, you won't -- so it's price of the turnkey price. But if you spend that money upfront, now when the customer pays you, it's a cash flow thing, that you get paid now, but you already spent money on building that infrastructure.
[Operator Instructions] The next question is from Ketan Gandhi from Gandhi Securities.
Sir, if I not wrongly understood, you said INR 200 crore Inox Wind and INR 200 crore Inox Wind Infrastructure. So we are totally raising INR 400 crores -- enabling, I mean?
Those are enabling resolutions. We are not raising INR 400 crores, let me correct you. They are enabling resolutions of up to INR 200 crores in each of these companies. We're simply doing that because we don't -- we have a broad number in mind at this point in time, let's say, INR 100-odd crores, which we have identified, which is something which we're doing. But these are enabling resolutions, which need to be passed by the company to be placed in the EGM, which is in September, I believe. So that -- we don't need to keep convening Board meetings and special EGMs to take approvals.
Understand. Sir, wind power around 120, 125 megawatt, which we have sold to Gujarat Fluorochemicals. Is it -- I mean -- and we have received advance against that. So it is interest-bearing or noninterest-bearing?
Primarily interest-bearing because they've supported us in terms of cash flow.
What about figure, 9% to 10% or higher?
9% to 10%, correct.
The next question is from [ Anand Daga ], who is an individual investor.
Yes. I just wanted to know -- hello? Is it -- am I audible?
Yes, sure, go ahead.
Sorry. I just wanted to know that why are we looking at a dilution when we are expecting liquidity to come into the company through various other options? I mean considering that it's almost like a 10% or maybe a 12%, 13% from the IPO price, why will we be looking at a dilution of raising INR 200 crores at this price and not when the sector has turned around? Well what would be the rationale behind that now?
Let me inform, let me correct this misconception. Number one, we are taking an enabling resolution. These are enabling resolutions because of the upcoming EGM. Otherwise, we will need to conduct Board meetings and then take a call for EGMs because this is something that needs to be approved at the EGM, number one. Number two, what we are doing, as I mentioned, is taking enabling resolutions in both Inox Wind Limited and Inox Wind Infrastructure Services Limited.
Fair enough. And if we do raise...
Which is a 100% subsidiary of Inox Wind, we broadly have a goal in mind, which we will be working towards, post this enabling resolution, which will lead to potential dilution in IWISL, which is 100% sub of Inox Wind Limited.
Fair enough. That will no longer remain 100%, some it will become just a subsidiary as such.
Yes. As I said becoming 80% or a 90% or a 95% subsidiary of Inox Wind. And second, with respect to Inox Wind Limited, we may do a very, very minor dilution, if at all, simply because we have been discussing -- or we have been hearing from various investors that now the sector's bouncing back, why don't you keep some confidence capital in the company so that you can fast-track some of the actions on 3 megawatts. But that's not something which we've decided upon at this point in time. That's something which the Board will take a final call on. Even if we do, it will be a very, very minuscule dilution, if at all.
Fair enough. Yes, because the existing shareholders would feel a little shortchanged at this price. So that's the only reason. And secondly, as a general basis, when do you expect to come back to profitability?
Look, we were in -- right, to be honest, we were -- we -- so it's been 3 years of shutdown, '17/'18, '18/'19, '19/'20, if you saw '17/'18, we were in loss. '18/'19, we turned around because we made a lot of supplies, but then, unfortunately, the grid got stalled and also we were just struck. So we've used the entire '19/'20 just for commissioning and collecting all our money and cleaning up all our inventories, providing for...
You're very hopeful about this year. But unfortunately, COVID struck.
Unfortunately, we have a lot of orders at this point in time, but you've lost 4 months or something this year due to COVID. But -- and as you know, Gujarat is a Q2-ish peak period in terms of monsoon in Gujarat. So while we have our manufacturing plants now completely stabilized and running at good production levels, project implementation is a little sluggish, naturally, given the monsoon impact in Gujarat. But having said that, I think quarter-on-quarter, I broadly believe we should be back to profitability, hard to say whether at the PAT level or whether at the cash profit level. But I think with the orders which we have in hand and given the tariff levels which are now coming up in the sector, we should certainly be back to a lot of liquidity, number one. And number two, solid profitability over the next financial year.
Great. That sounds really reassuring having stayed with you for the past many years. Now, we look forward to better things.
We appreciate all of you being invested in Inox Wind. But people have to appreciate and understand, if someone shuts down the sector for 3 years, the only thing you can do is survive and wait for the good periods to come. And the good news is that we are a survivor. We probably have seen a lot of our competitors hold up. We've not had a single rupee of haircut with any bank. It's all Inox' money and our group support which enabled us to survive and sail through. And I think the good times are knocking on the doorsteps. And I think we should be back to solid growth quarter-on-quarter.
Next question is from Prafull Rai from Arjav Partners.
I just have one question. I was just looking at numbers of the company between '14, '15, '16 and '17. Those years you've had revenue of INR 4,000 crores, that is one. You had a very healthy margin of 15% to 17% EBITDA level. Do you think you'd be able to achieve those numbers given the current order backlog in the next 3 years? Given that the revenue composition is changing more towards the 3.3 megawatt turbines because that I would assume after '22 onwards, a bulk of the order will be coming in 3.3 megawatt segment. So can you take us through, if we will be able to achieve those numbers, a, in revenue and, b, in EBITDA with this changing revenue composition?
Look, naturally, I think the sector is getting back to a high-growth phase. If it wasn't for COVID this year, we probably would have had a fairly decent financial year for the OEM sector after a hell of a long period, virtually 3 years. I think we are looking at very, very strong growth in this sector in the years to come. I mean I don't want to make any commitments or statements about whether we'll make INR 3,000 crores or INR 4,000 crores or INR 5,000 crores. But certainly, I think we should be looking at -- I mean, if you look at the historical areas, when we operated in a 3 gigawatt market, I think the market should certainly be 3 gigawatts if not more. It's nowhere even close to 10 gigawatts where the government is aiming at, so I certainly believe that revenue should be, ballpark, the numbers you spoke of.I think in terms of margins, one thing is certain that everybody in the OEM space has burnt their hands over the past 3 years. There has been so much loss for everybody for no fault of theirs. Everybody is extremely cautious. And everybody is now making turbines, only if there are healthy profit margin, which is kind of reflected in tariffs also, number one.No one's going to be supplying turbines to make losses. The inventories are virtually cleaned up across the board. So I personally believe that we should be back to historical profit margins as we go forward. More so, given the fact that the 3.3 megawatt turbine is probably the most efficient 3 megawatt onshore turbine, which we are aware of for the Indian market at this point in time. And given the fact that we are probably the lowest cost producers of wind turbines globally, I think we should be back to historical profit margins going forward.
[Operator Instructions] Next question is from [ Shantanu Mantri ] from MK Ventures.
Sir, just I wanted to know that at the moment, we have around INR 1,300-odd crores of receivables which is as of 31st March. And we made a provision -- ECL provision of INR 187 crores. So I just wanted your insight that going ahead, out of these INR 1,300 crores of receivables, how much more provision do you see that we will be needing to take, if any?
Well I don't think we are looking at any further provisioning at this point in time. I think we've proactively provided for all the potential liabilities, which we thought we may not be able to recover wherever we have the slightest doubt. We have an accounting policy in place now, which is fairly -- very, very conservative. We've heard about this from investors earlier that various global companies have a 2% provisioning. We've actually broadly made our provisioning numbers based on anything 0 to 1, 1 to 2, 3 to 5, which will be out in our annual report, almost 10-odd percent depending on the aging of those assets. So I think we have been extremely conservative with respect to taking provisions.Let's not forget within that INR 1,200-odd crores of gross receivables, which we talked about, we have almost INR 600 crores to INR 700 crores worth of assets sitting, which includes one of the SPVs as well as the lot of the older 50, 60 megawatts of inventories sitting with us, which is already now in plan which will get liquidated over the course of this financial year, hopefully. So I think -- we're pretty confident about collecting virtually all that money. If at all, there is some INR 10 crores, INR 20 crores, INR 30 crores here and there. That's something if a need arises, we will provide for it.
[Operator Instructions] Next question is from Ketan Gandhi from Gandhi Securities.
Devansh, don't take it very seriously. Just multi figure, next 2 years, what EBITDA level we can reach.
Look, it's true to FY '21, Ketan bhai, but if you talk of FY '22, FY '23 based on the 3 megawatt platform, I would tend to believe we will be back to historical profit margins.
That was the last question in queue. I would now like to hand the conference back to the management team for closing comments.
Sure. Thanks, Abhishek. Thank you, Al. Thank you for your interest. Thank you for being part of Inox Wind. I think we've said this in the last quarter, and we reiterate this, we are now getting back strongly. Except for the COVID impact, I think we would have had a fairly strong Q1 and Q2 naturally with some impact of the monsoon period. But having said that, I think we've seen very positive developments in the wind sector recently, which is tariffs discovered are now moving towards the rational levels.The surviving OEMs have all decided, given the fact that most of the inventory is out, everybody is now going to play a rational game. Naturally, everyone's burnt a lot of money over the past 3 years. So a lot of sanity is coming into the sector. We are in advanced stages of launching a 3.3 megawatt turbine, which is -- and we are seeing a lot of interest coming in for that across a whole host of IPPs out there. We are working towards minimizing the remaining net debt in the company. As you're all well aware over the past 3 years, in spite of the sectoral mess, we've continuously reduced net debt. I think we should be down to a very minuscule net debt over the course of this year. The company has various assets, including an SPV and some older inventory, which will lead to a lot of liquidity for the company going forward. We are very confident about the future of the wind sector. A lot of the things that the government wanted to do have finally started happening on the ground. And going forward, I think Inox Wind, over the next couple of quarters, if not 1 year or 1.5 years down the line, should hopefully get back to its former glory.Thank you for your interest, and we look forward to talking to you in the next quarter.
Thank you very much. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.