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
Earnings Call Analysis
Q3-2024 Analysis
Inox Wind Ltd
Inox Wind has presented a compelling narrative in its quarter 3 earnings call, signaling a notable recovery and robust growth trajectory. A significant 113% year-over-year revenue growth, from INR 237.7 crores to INR 506.9 crores, accentuates this turnaround. Shedding its past financial struggles, the company showed a profit after tax of INR 1.8 crores compared to a loss of INR 287.9 crores in the same quarter of the previous fiscal year. Riding on this momentum, Inox has its eyes set on capitalizing on the vast opportunities within the renewable energy sector.
The ambitious journey Inox Wind is undertaking is grounded in its strengthened operational capabilities and strategic decisions. With a current order book standing tall at 2,575 megawatts and additional significant orders expected, the company's revenue growth visibility remains strong. Inox Wind's strategic investments include the introduction of a new 3.3-megawatt turbine, securing its position in the market with the latest technology. The company's operations are pivoting to accommodate 2 gigawatts of annual execution, positioning it well for scaling and achieving more than 1 gigawatt of annual execution well ahead of market expectations.
Inox Wind's subsidiary, Inox Green, is scaling up its operations maintenance (O&M) portfolio, with a target to reach 6 gigawatts by FY '26. This ambition adds another dimension to the company's growth, further diversifying its revenue streams and enhancing its competitive edge in servicing the wind energy sector.
Under the current revenue recognition policy, revenue from the supply of goods is recorded upon delivery completion, and for EPC (Engineering, Procurement, and Construction) contracts, it is recognized at the commissioning of wind turbine generators (WTGs). O&M services revenue follows a time-based model, highlighting the company's diverse revenue streams. This approach aligns with Inox's focus on scaling equipment supplies while managing project development risk effectively.
Inox Wind is also exploring future technologies with an exclusive licensing agreement for a 4-megawatt series turbine. This positions Inox not only for the present but also strategically for the next decade's technological requirements in the onshore wind sector. Further, the company is diversifying its order book with a blend of turnkey and equipment supply orders, which offers flexibility in scaling operations and a quicker path to revenue visibility.
You don't have any saved screeners yet
Good evening, ladies and gentlemen. I'm Pelcia, moderator for the conference call. Welcome to Inox Wind Q3 FY '24 Earnings Conference Call. [Operator Instructions] Please note this conference is recorded.
I would now like to hand over the floor to Mr. Mohit Kumar from ICICI Securities Ltd. Thank you, and over to you, sir.
Thank you, Pelcia.
On behalf of ICICI Securities, I would like to welcome you all to the Q3 FY '24 Earnings Call of Inox Wind Limited. Today, we have with us Mr. Devansh Jain, Executive Director, Inox Chief GFL Group; Mr. Kailash Tarachandani, Chief Executive Officer Inox Wind Limited and other senior members of the management.
Without much ado, I will now hand over the call to the management to start with the brief opening remarks, which will be followed by Q&A. Over to you, sir.
Good evening, everyone, Kailash Tarachandani here. A very warm welcome to all to the Quarter 3 Financial Year '24 Earnings Call of Inox Wind Limited.
The company announced its quarter 3 results at its board meeting held on Friday, 9 February, today. The results along with the earnings presentations are available on the stock exchanges as well as on our website. Let me first take you quickly through the financial results for quarter 3 financial year '24 for the company.
As guided in the previous call, I'm delighted to announce that Inox Wind has turned back positive. This is, however, just the beginning of the massive growth journey ahead with huge opportunity that the sector beholds. Inox Wind has had a remarkable turnaround, which has translated into strong numbers reported for this quarter as well. For the quarter on consolidated basis, Inox Wind has reported revenue of INR 506.9 crores in quarter 3 FY '24, versus INR 237.7 crores in quarter 3 FY '23, an increase of 113% Y-o-Y.
EBITDA of INR 99.5 crores in quarter 3 FY '24 versus EBITDA loss of INR 172.5 crores in quarter 3 FY '23. Profit after tax of INR 1.8 crores in quarter 3 FY '24 versus loss after tax of INR 287.9 crores in quarter 3 FY '23. The macro tailwinds have massively supported our growth plans with the GDP growth in result over the next decade, the demand for power is huge. Wind power being one of the lowest cost power and significantly lower than the average power purchase cost of the country and also the fact that it is green power augers well for its growth.
We have crossed 100-megawatt of supplies in quarter 3 and have also started 3.3 megawatts -- our new 3-megawatt turbine supplies for which we have secured the RLMM listing as well. We are really excited about the prospects of Inox Wind. We have been working hard for the last several quarters to come to this stage, working on strengthening the balance sheet to ramp up our operation as well as enhancing our product offerings to the best technological products available globally.
Wind energy can only provide RTC requirements where it combines optimally the solar and storage solutions. This has led to numerous order win over the last month, including a large 279-megawatt order from a large T&I player, another 50-megawatt orders from Navratna CPSU, which is NLC India, as well as the recent mega order win of 1,500 megawatt single largest order from CESE. The CESE order, as I said, is the single largest wind order ever awarded to any OEM in the country. This order intake of approximately 1,850 megawatts in the recent months, taking our total order book to approximately 2.6 gigawatts, provides strong revenue growth visibility, and we believe we should deliver more than gigawatt scale annual execution much earlier to what we anticipated.
Our efforts have also yielded results in our vendors' confidence, and that does the supply to be able to ramp up our production. Our customers across PSUs, IPPs, C&I and the retail have also shown confidence and entrusted us giving us large orders. Our debt levels have also come down drastically and operations are being geared up to position as well for 2 gigawatt of annual execution. We continue to maintain that we will achieve the net debt status net debt zero status by H1 of the next financial year.
Also, as guided earlier, we will be incrementally looking at increasing equipment supplies to our order book next along with a turnkey. What truly sets us apart is the infrastructure buildup, including the high-value project site inventory, which we have built over the time. And I believe we would be one of the largest companies in terms of project site infrastructure ownership which is USP for us as it enables us to deliver the turnkey project on plug-and-play model to our customers. .
India's renewable target in general and wind, in particular, along with Gujarat and Rajasthan government policies on captive wind plus the carbon tax announced by several economies globally aided by the move away from fossil fuse provides a massive opportunity for the wind sector. Inox Wind has put in place all the building blocks to be able to capture a sizable portion of the large opportunities.
Over the next 8 to 10 years, India plans to add over 100 gigawatt of wind power capacity on the current base of around 44 gigawatt. The current order book is 2,575 megawatt and get more orders than expected in the near future provides a strong revenue growth visibility. The commencement of our 3.3 product supplies, our robust and well-capitalized balance sheet, combined with lean cost structure will add to our strength that we have built over the last few quarters. We have also signed an exclusive licensing agreement for 4-megawatt series turbine, which we believe will help us address the technological requirements in the onshore wind sector over the next decade.
Our O&M subsidiary, Inox Green, continues to build the strength has delivered another good quarter, listing IGESL separately, I believe, was a strategic move to place us strongly for growth both organically and inorganically. I believe we are on track to reach 6 gigawatt O&M portfolio by FY '26. We will discuss the financial of the Inox Green in detail separately right after this call.
With this, I would now like to hand over to Mr. Devansh Jain for his brief remarks, after which we will open up the floor for the Q&A session.
Thank you, K.T. Good evening, everybody.
I am pleased to state that all our hard work has paid off finally, and we have been able to deliver on all the promises we made. The efforts which we have put over the last few quarters have yielded a remarkable turnaround for Inox Wind in Q3, which is reflected in the current order book, the ever-growing order book and the reported numbers. I firmly believe that we have just embarked on a massive growth journey with all the levers aligned, which includes the strong promoter backing of the company, a robust balance sheet, large and continuously increasing order book, which is very well diversified now, ramped up operations, a high-value project development pipeline, which is a key moat in USP also for us, along with being technologically ready for the next decade.
I believe Inox Wind is fully geared to capture the large opportunities that the sector beholds with our operations ramped up and further being ramped up for 2 gigawatt of annual execution and the large order book, we should achieve more than 1 gigawatt of annual execution much earlier than what the market could have anticipated and even much earlier than we ourselves could have anticipate.
Thank you, and let's open the floor to questions.
[Operator Instructions] First question comes from Rahul Kothari from Grit Equities.
Mr. Devansh ji, first of all, hearty congratulations to your team for achieving amazing results and standing on your guidance. Also, congrats for winning of such a large order of 1,500 megawatt. Again, that's a commendable thing. Sir, I would like to understand more on the -- can you help regarding the guidance, have we revised or can you provide some guidance for FY '25, execution front?
Thank you so much for your compliment, but I think it goes out to the entire team for all the hard work that has gone over the last several quarters to be able to enjoy the -- sector is now placed. Look, I think we guided for certain numbers, which were targeting 500 to 600-megawatt. While I would not want to put out an official number at this point in time, all that we can say is that we will be looking at significantly increasing execution from that perspective. The company is gearing up for 1 gigawatt of annual execution. As you can see, our order book is now, excluding LOIs, north of 2,500 megawatts. And clearly, I mean, without specifying the exact details at this point in time, I think we would be looking at a very, very significant ramp-up in operations and a significant jump to what the market expects.
So regarding this 4-megawatt new turbine set up, can you help us understand more on the -- regarding the infrastructure that we have, how does it get into -- gel into this current infrastructure? Or do we need to set up a new infrastructure? What sort of visibility do we -- can we consider about winning some orders on these turbines?
No, look, first and foremost, I think we've announced a license agreement for the Forex platform. Now that's not something that just comes in. If you recall the 3-megawatt has taken 2 to 3 years to come to fruition. There's -- you set up a turbine, you undergo type certification and then you ramp up supplies and so on and so forth.
So what we've tried to do is we looked at the 4 building blocks, which are required in this business to succeed. One, we needed a strong balance sheet, which we've now positioned ourselves for. Second, we needed a large project site inventory. We are probably the largest project site developers across wind turbine manufacturers today in the country. And we have a very, very strong project development pipeline and plug-and-play infrastructure viability. The third piece, which was required was large orders to obviously increase execution, get revenue and a diversified order book. And I think we are very happy to share, we have a very, very diversified, of course, we won one very large order over 2 to 3 to 4 years. But we expect significantly large orders as we keep moving forward. What the technology, and the fourth piece is the technology piece.
So it's not that we're looking at India only from a 1-year, 2-year, 3-year perspective. We looked at where is India heading in the next 8 to 10 years. And what we saw is we must have another larger product in our arsenal from the perspective that there are certain sites where larger rotor diameter blades can go.
And to that extent, I mean to the extent that we will keep choosing our 3.3x, which is our workhorse, which I believe is ideally suited for the Indian markets, but a 4x platform is also well suited for certain parts of the Indian market, and we did not want to lose out on those opportunities. So I think this is something which will play out over the next 2, 3 years. In the meantime, 3-megawatt is the workhorse. 2.m.egawatt, as you know, is a limited play now, given that it's fairly outdated in our scheme of things. But yes, there are certain places where we use the 2-megawatt as well. But going forward, 3 is going to be the workhorse for several years.
And sir, just one more question. In this cycle, there's this interesting thing of a loss of demand of orders that you are winning is also split into like core turnkey plus also orders with regards to pure turbine supply. So does that -- like how does this help us with our significant revenue growth. Like is it from the side of the customers who are asking like pure to go for turbine and execute on their own?
I'm sorry, I didn't understand. What is your question?
What I'm -- what we're looking is that this time compared to last cycle, earlier loss of order used to be on the turnkey or pure or complete turnkey kind of orders and this cycle is like we are getting turnkey orders also and plus also a pure only equipment supply kind of orders. So does it help us to quickly ramp up our capacity and more revenue -- earlier revenue visibility?
Of course, because effectively, we don't want to take the onus of all project development on ourselves, right? I mean we have -- I mean, of course, we have fairly large capacity and capability to develop project pipelines and offer projects even on a plug-and-play basis. But what a split of EPC does is basically, other people are developing their sites whenever they are ready. And we are derisking ourselves by having multiple turnkey orders, multiple equipment supply orders. So naturally, it enables us to scale up business faster. Also scale up our entire opportunity because assume I could do six 1,500 megawatts of turnkey. But I could do 2.5, 3-gigawatts of equipment supply. So what simply this does is adds on to our project development pipeline, moving away from a project development pipeline by leveraging 5 other players who are developing their own projects.
Next question comes from Ardik Shaw an individual investor. [Operator Instructions]
Next question comes from Prit Nagersheth from [indiscernible]
Yes. So first of all, a big commendation to the management for delivering such numbers and such business. I would love to understand the revenue recognition workflow that this business follows, if someone could shed some light on that?
Sure. Manish, could you take them through our revenue recognition policy?
Sure. So as far as revenue cognition policy is concerned, in terms of supply of goods, we recognize the revenue when the risk can revolve not transfer to the customer that depends upon the contract to contract. And in terms of EPC revenue, we recognize our revenue based upon the commissioning of WTGs. There are 2 stuffs, which we recognized accordingly. In terms of O&M, that is a time-based services which we provide over a period of time and recognize the revenue based upon the timing, time performance of the same.
So just to get this right, so equipment supply, the timing for recognizing the revenue is when the equipment is supplied and the delivery is completed. Is that what you just meant?
Yes, that's right.
Okay. And in terms of EPC, it is on commissioning. So could it be that SEBI evacuation takes time? Or if there are challenges in commissioning the revenue recognition will get back ended?
Contract to contract, for example, in a limited scope EPC, if over scope of work, it doesn't include commissioning, so we recognize the revenue on when the EPC got completed. Only wherein the commissioning is in our scope, we recognize the revenue based on commissioning of the WTGs.
Understood. Understood. Okay. The other question I had is regarding the bid pipeline. So you mentioned 2,600 megawatts of orders, excluding the LOIs. What about the pipeline that is building up, could you shed some light on that?
Look, I think there's almost 15 gigawatts of tenders out there, which include hybrid, wind, FDRE, fixed dispense renewable energy tenders, which need to be awarded out. This is besides the fact that multiple PSUs are taking out fairly large-sized tenders. I mean, as we speak, there is an NTPC tender out there. There is an SJVN tender out there. And given that we've created a very, very large order book, of course, there are significant orders in advanced stages of discussion. Keeping in mind some of our targets which are -- that we are now enhancing given that we are looking at far larger volume of supplies and execution as we move forward, we are bidding and participating in most of these tenders.
I see. So Devansh, should we anticipate a different kind of guidance in terms of what you will end up doing for FY '25, '26 than what has been communicated in the past?
Look, without specifying exact numbers, all I'm saying is whatever has been communicated in the past for FY '25 and '26, we will be significantly higher than that. Will elaborate more on this at an opportune time. All I can say at this point in time is we would be looking at significantly larger numbers.
Right. One other comment if you can give me is on many of these centers are getting undersubscribed, or there are delays or there are land delays, I mean, that's the nature of this business. So how do you see that impacting both your current bid pipeline as well as the ability to execute some of these numbers that we are talking about?
Look, I think there was nothing new about that. That was very visible to us in the past 12 to 15 months. We've seen the pain in the sector for the past 5 years. So frankly speaking, it was pretty clear that you need to have a split of turnkey and equipment supply. It is foolish for someone to say that we will do only equipment supply and then blame people that I'm not ready, you are not ready, blah, blah, blah.
What we have done smartly is we have used a significant chunk of our project pipeline, which we continue to replenish and build on. And we've also smartly taking equipment supply orders, number one. Number two, we're also taking equipment supply orders from people who we believe are capable of executing, okay? Now obviously, there can be delays, and there can be challenges when you develop infrastructure. But there is also a quality which needs to be looked at. If you notice, we are not taking in orders from start-of-the-mill IPPs and so on and so forth, so-called C&I players who talk of equipment supply because they don't have the wherewithal and the pedigree to do it.
And we are completely hedged because we have the turnkey ability. We today are the largest turnkey wind turbine company in the country. And we are now adding on to equipment supply with genuine and relevant parties. So there is no point taking orders for the sake of taking orders from people who are not capable of executing them and then blaming them.
Next question comes from Dave Doshi from Dymon Asia.
Congratulations team on the good set of numbers and a strong order book. Just wanted to clarify one thing, Devansh. You mentioned 15 gigawatt of bid pipeline. This is in addition to the PSU orders or this includes the PSU orders?
So this is an addition to the PSU orders. These are various -- so PSUs are guys who take out tenders. So for example, we won 3 anti-PC tenders. We won an LLC tender. Similarly, there are tenders in the public domain by SJVN and NTPC, where we only supply turbines or in certain tenders, we do turnkey projects. That's where Inox Wind submits tenders. And then there is another 15 gigawatt of pipeline out there, which is hybrid, wind, FDRE, et cetera, where say, people like Adani, Tata, CFC, et cetera, participate.
Okay. And what would be the current PSU pipeline in addition to this 15 gigawatt that you mentioned?
Look, I can only say in the public domain right now, we have 1,000-gigawatt NTPC tender. There's a 300-megawatt SJVN tender. This is in the public domain. What we've also seen is NTPC is taken out tenders for BOP for about 2 gigawatt. We know there are various other projects in the pipeline from various PSUs, Kailash like...
I mean, even like some of the new green hydrogen, green ammonia, a lot of those things are also coming up, which will add to volume over and above. And we have a couple of other PSUs as well.
Which we believe are coming out with tenders in the near future or on an ongoing basis. This is much larger than anticipation.
So when the government had come up with the plans on wind power, they said almost 10 gigawatt of annual ordering and they've significantly lag. If you can highlight what are the issues, which is leading to this delay? And when do we expect that kind of an ordering at least even 50% of that ordering to start trickling in on an annual basis? So I'm more interested in understanding what are the issues which is hampering the overall execution as well as the ordering cycle.
Look, first and foremost, while the government may have initially anticipated 10 gigawatt of clean wind tenders, don't forget there's 15-gigawatt of tenders out there for which a 9 gigawatt out of that, if I'm not mistaken, Anshuman, is FDRE, right? FDRE needs 9 gigawatts of incremental wind. Then you've got clean wind tenders and hybrid tenders. So yes, the nomenclature may change from NTPC, NHPC, so I keep taking out 2.5, 2.5, 2.5 gigawatts of tenders, but the tender is already in the public domain, be it FDRE, or wind or hybrid, which requires a component of wind is far more than that, number one.
Number two, that there are a lot of people who are playing the C&I game. For example, CFC will require captive. For example, the large IPP wishing we signed 280 megawatts. We've done multiple projects with them, repeat customer. They do C&I. They get better returns. They anticipate that they would rather play on the extremes or sell to retail, industrial, XYZ customers. So there is enough demand coming in but you've got different categories. You've got the C&I and for that, you don't need any tender.
And the third piece is, I mean, to some extent, you are seeing that when the government is taking off these standards, they are kind of [Technical Difficulty]. So a lot of people already have so many tenders, one, or so much C&I demand that they need to fulfill, how much more will they take? Let's put it like this. This is almost ballpark, right? There's 15 gigawatts out there. Let's say, another 4, 5 gigawatts is in the pipeline. Let's say, 7, 8 gigawatts have been awarded over the past 12 months. That's almost 27, 28 gigawatt in the past, say, 12 to 18 months. You need to have people who can supply also, don't forget, majority of the sector has gone bust.
And even from an execution pipeline perspective, there are probably only 2 at best or 3, not even 3, I would say, 2 players who do turnkey. So everyone doesn't have the ability to do project development or project infra -- you will gradually have people coming in, they'll take much longer than experts. And I think to that extent, I think everyone's plate is full at this point in time.
So one of the issues, Devansh, which I understand is the implementation or the execution of these projects. So there are a few competitors of yours who are more interested in just giving the turbines, and they're not interested in executing it. Given we have that -- how does it benefit in terms of more orders or more market share? And second question is, if I'm not mistaken, our annual execution capacity is 1 gigawatt. Given the kind of order book that we have and the pipeline, which is there, at what point in time will you foresee us expanding our capacity?
Okay. I'll take your second question first, Dhawal. First and foremost, our manufacturing capacity is 2.5 gigawatts. It's not 1 gigawatt. Kailash mentioned in his opening remarks that we are gearing ourselves to be a 2-gigawatt supplier to the Indian market. We are geared to be a gigawatt supplier to the Indian market, okay? These are the 3 most important points which Kailash mentioned in his opening remarks. .
Secondly, our capacity is not of 2.5 gigawatts, as I explained to you. So we don't need to expand capacity until we get closer to those numbers. And if we do, we'll expand because within the existing capacities, we can put up another share and ramp it up. At the end of the day, we spent about $100 million, INR 800 crores to build a 2.5 gigawatt manufacturing capacity. So we've not spent INR 4,000. INR 5,000, INR 6,000 like some of our competitors at 1/5, 1/6, 1/7 the cost, we can expand these commercially.
And so I think in terms of how we're gearing up to take market share, look, I've always said, we are historically a 15% to 20% market share player. Having said that, I don't care about market share. I care about profitability. There is no point from '10 till '17 when the sector was ruling, saying I'm the largest player, I'm the largest player, and lose thousands and thousands of crores or being the second largest player and make 1% margin. We've historically been a 14% to 15% EBIT company, barring the painful transition period of '17 to '23.
I think we have guided and we have said our aim is to get back to those numbers from the coming financial year. So to that extent, if you look at our order book, it probably is one of the largest order books in the Indian market today. There is a very, very healthy pipeline of orders, which we expect in the near future across IPPs, across C&! players. We are participating in multiple PSU bids. So no, naturally, if you juxtapose some of this, you will be able to figure out what kind of execution and supplies we are gearing up to be a part of in the Indian market.
So manufacturing is 2.5 gigawatts. But if I were to do a complete execution or turnkey, what would that figure be?
No, that's -- it's not a question. I mean I really -- if we want me to do 3-gigawatt, I can. Will I do it? No, I will not do it. What we want to do is 50% turnkey, 50% equipment supply. That's the broad mix. Obviously, it could be 40-60 or 60-40. But just in terms of capability, I'll throw numbers at you. Until '15, '16, '17, when the sector used to be Q4 dependent and you have this set of 31st March. On average, Inox Wind used to do 50 to 60 turbines every month in the last quarter, right? Now whether it's a 2-megawatt or a 3-megawatt or a 4-megawatt turbine, it is the same job. So we juxtapose that, 50 or 60 turbines is 100 to 120 megawatt, multiplied into 3.3 megawatts. You will be anywhere from 180 to 200 megawatts a month. So from a capability perspective, we could do north of 2 gigawatts. Do we want to do it? No.
In terms of the profitability and the revenue aspect, can you differentiate how would a pure equipment supply order be? And how would a turnkey project be?
I'm sorry, I missed your question. I'm sorry, I lost you. Could you repeat?
So just trying to understand the revenue and the profitability profile between a turnkey project and a pure equipment supply.
So, I'm not going to share those numbers because...
No I don't want specifics. I don't want specifics, just taking this...
In terms of profitability, turnkey gives you a little higher -- obviously, it gives you a higher because we're taking more headache and more risk, right? From a percentage point, it may be on par with equipment supply because your denominator is lower, right? But it's not a question of -- you have to take some easy businesses and you have to take some turnkey businesses. So it's not a question of why don't we just do all turnkey because it's complicated. You need to build lines. You need to acquire a line. You need to solve ROW issues. It's not possible to just take all the dirt and leave the [Foreign Language] for our competitors.
[Operator Instructions] Next question comes from Akhilesh B, an individual investor.
Congratulations to the whole team. As a shareholder, I'm really happy to see all the positive developments around our company and our sharp focus on profitable growth which will be really important going ahead. My question is around the merger with Inox Wind Energy Limited. In late December, we got approvals from the exchanges. So where does that process stand now? Have we filed the case in NCLT and any tentative timeline that we see for completion of the same?
Yes. So as we have stated through our press release in December that we have already received the approval from both the exchanges after which we have filed the case. Asked team at NCLT as well, the Chandigarh bench. Now we await the listing of the hearing and it may take time because, as you know, NCLT is a time-taking process. However, we don't have any guidance as of now. But what we expect that we should get it within the next 2 to 3 quarters.
Next question comes from Abhishek Datta from Anand Rathi.
Congratulations on the great set of numbers and the great outlook. Sir, I just wanted to understand, like you have manufacturing capacity of 2.5 gigawatt and you have a sizable order backlog -- order book. So can you just throw some light as to when do you expect this 1 gigawatt order execution in the near future?
Very difficult to say any exact timeline, but we are definitely gearing up. As Devansh said, building up the capacity and capacity in the sense of the order intakes and all that, and we will gradually over the quarter, but the timeline is such a way that we can execute those.
Okay. Just the second question is on when you say that you have one of the largest common infrastructure among the players, how do you quantify it? Like is it -- is it part of our gross loss that stands at around 2,000 crores? How much is the common infrastructure part?
So how we talk of the common infrastructure is the access to our project sites, transmission lines, land banks, substations. That's how we quantify that we are one of the largest project site inventories. And that's what enables us to get projects which can be done on a plug-and-play basis as opposed to starting from scratch, which would be a 3- to 4- to 5-year process.
Okay. That's fine. But how much of that -- how do you quantify it like in terms of -- you have spent money to create that asset pool. So in the INR 2,000 gross loss of FY '23, how much that represent, sir?
So in terms of the investment which we have made in common infrastructure, it's broadly in the range of INR 400 crores or INR 500 crores, which is lying in our CWIP [indiscernible] block.
So is it the same like the other current -- other financial assets, noncurrent financial assets of INR 470 crores, which is there. Is that is what you're referring to, the common infrastructure part or the...
So common infrastructure is in our books of accounts and give the right to use to our customers and we'll apportion over a bit of time. The other noncurrent financial assets, which you are seeing is towards the unbilled revenue, which -- towards the O&M business. As per the accounting rules, we need to straight-line our O&M contract over a period of time, and the initial 2 years of 3 O&M periods, it shows...
Just turning another fixed asset block, capitalize in....
Capitalize in our fixed asset block, PPE.
Can you explain that, but like of the INR 1,300 crores gross loss of Inox Green, how much is -- how do you [indiscernible]
So this is not a question of Inox Green. Could I suggest you get off on a separate call and they can explain it to you because there is straight lining revenue, and there is also fixed assets, that the gross block part of it is in Inox Green and part of it is in [ Resco ].
Of the total promoter infusion after total to promote infusion, what is the in level of interest-bearing debt right now?
The interest-bearing there as of 31st December would be about INR 500 -- INR 450-odd crores would be the interest-bearing debt in the company.
To get on we can bring those offline.
Yes, we will explain all those queries offline.
[Operator Instructions] Next question comes from Diwakar Rana from Prudent Equity.
Basically, all my questions has been answered. Just one question, what will be the normalized interest cost from the Q4 onwards?
No, I think when you look at these numbers, our fundraising happened in middle of November when we got the proceeds as we started using them. All our onetime charges are coming down, banks are going off the cost. But I think on a rolling basis, we are on INR 30 crore odd run rate at this point in time. INR 30-odd crores...
Yes. So we will be on the run rate of INR 30 crore to INR 35 crore in Q4 probably. Another INR 30 crores of this amount which has been included by the promoter. This was done in November. And the effect of this has come into December. So probably from Q4, we'll be able to see the INR 30 crore run rate.
Excluding the onetime charges, given that a lot of NCDs are being repaid, debts are being repaid and those have charges because we are breaking them from the 3- or 4-year, 5-year terms, which we had taken from the bankers.
Next question comes from Darshit Shah from Nirvana Capital.
Sir, I just would like to know out of this total order book of 2.6 gigawatts, roughly how much would be for the new 3-megawatt turbines?
I think very few 2-megawatt orders are left. I think we're talking about 6 -- around 350 megawatt.
So 350 is all 3-megawatt.
Sorry, sir, I couldn't hear you properly.
350-odd megawatt is 2-megawatt, everything else is 3.3 megawatt turbines.
Okay. And sir, as we had seen on earlier calls, so this 3-megawatt turbines fetch compared to the earlier technology.
Look, earlier technology was outdated. When the sector shut down, we had a lot of inventory, et cetera, et cetera. So we've not upgraded our turbine. If you don't sell the old inventory or clean up the old inventory, how are you going to move to larger turbines. And from that perspective, yes, the 3-megawatt are sold at a higher price, but then they are much larger ROTA. They are much higher in terms of tower heights. What is important is cost of energy, not CapEx. And the 3.3-megawatt platform reduces the cost of energy compared to the 2 -- to our earlier 2-megawatt turbine by virtually 35% to 40%.
Next question comes from Yash Vardhan Sarda from SKP Securities.
Congratulations on a great set of numbers. Could you please tell me a little more clarity on the Inox Green merger and what the timeline is like?
No, it's Inox Green, it's Inox Wind Energy Limited, which is the promoter of Inox Wind getting reverse motion in one of the previous questions I answered that we have already filed the scheme in NCLT. And however, we can't tell you the exact timelines, but what we expect is that within the next 2 to 3 quarters, we should get the approval from the NCLT.
Next question comes from Marni Vijay from Avendus.
Am I audible?
Yes.
Yes. So I just want to understand working capital, how it works for your equipment business and your turnkey business? So how much of inventory typically would be kept and what will be the time before the client base et cetera, that kind of details for say separately turnkey business and equipment business.
Look, I think very simply put, we -- I mean, the past will not be a barometer of the future given them the factory shutdown. But in a normalized scenario, say FY '25, which would be the first full year of normalized operations and all the debt issues out and 3 megawatts kicking in and the sector feed-in tariff issues behind us. What we would be guiding for is about 90 days of working capital cycle.
When you typically supply a turbine as Manish and Kailash have explained or Rahul may have explained, when you supply turbine and equipment supply, we supply the turbine, the risk reward gets passed and we get paid. That would typically be in 45 to 60 days. And in a turnkey contract, obviously, again, when you supply the turbine, you get paid the supply price. But the EPC piece, which is about 25% of the turbine cost also you get paid in different, different, different milestones. So that depends on what the contracts are, but that typically comes over a period of 1 year. But 90 days is a good barometer in terms of working capital cycle guidance for the consolidated business.
So it will be higher for EPC business and it will be lower for our equipment business? 90 is the...
Not necessarily. Again, like I said, supply payments come in. It's the smaller part, which comes in different milestones. And those milestones are over 12 months because you supply turbines, you're doing foundation, you're erecting, you get paid something on foundation, you get paid something on erection, you get something on USS, something on charging off the line, something on final commissioning, something on SDPT, so it's a process. That could be for 3%, which may come after 3 months or 4%, which may come after 5 months. But broadly, as I said, it's very hard to say. Will this be 81 days and will this be 96 days. As I said, broadly 90 days is a good barometer for the consolidated business.
So what will be the shortest time within which you can supply equipment and shortest time in which you can execute a turnkey project?
Look, if I'm in love with you, I can supply a turbine to you tomorrow, probably commission it for you in 30 days. But let's look at it practically. I think inventories are more or less consumed now. We are now building on inventory because the 2-megawatt is out and you're now ramping up your 3-megawatt supplies. So we have a lot of orders that we've taken. Kailash, I think you have different timelines? Now, I mean, frankly, if you were to accept an order today, it would be for FY '26. We will not be supplying any incremental turbines, giving such a large order book for FY '25.
[Technical Difficulty]
Stay connected, while we connect the management team back on the call.
I welcome back the management team. Please go ahead, sir.
Can you just ask the participant to repeat the question.
Yes, sir. Sure.
I thought my session got over. Anyway, so no, that answered my question, just that you are telling, if you take an order now, you will be able to supply equipment only for 2026, right?
That's right because we have a very large order book at this point in time. I mean, of course, Kailash, you can some more light.
I think as I was telling that time call got disconnected, I think most of the timelines have gone up. I think in the past, we used to execute in 3 months, 6 months, those kind of timelines. But today, most of the large customers, and if you see we have all, I would say, what you can top shots or the very, very sophisticated marquee customers, big ones. So this typically all of them planned project execution anywhere from 12 to 15 to 18 months. So if I'm talking today for you in turbine supply, mostly I'll talk to you not this financial year or not even coming, maybe most probably in financial year after. It will be most probably '25, '26 or so.
Okay. And it will be same for turnkey product also, meaning you will commit to execute a project by turnkey necessarily by '26.
In fact, yes, equipment supply could even be faster, but turnkey will definitely take longer term for sure, we'll plan accordingly.
Next question comes from [indiscernible].
Sir, firstly, I would like to thank for all the steps that you've taken to make Inox Wind's balance sheet such great. I think you have given a 0% interest loan. I think in the last 15 years, I've been investing, I've never found any management doing that. So I thought I should congratulate you for doing all the good things for the shareholders.
So I just have one question. So my question is, if I look at the order book of, let's say Suzlon, I mean, the largest competitor and yourself, right, what I see is that there is no capacity for both the companies to supply winter buying for, let's say, FY '25, right? So my question is given that so many orders are coming from the government, do we see any changes in the pricing of the turbine? Or do we see -- is there any possibility of expansion of margins, let's say, when -- when we onboard or take new contracts?
I think we've already taken a very, very significant number of orders for FY '25. If you look at our firm order book, excluding LOI, it is now north of 2,500 megawatts. And there are certain other commitments which we have, which are in different stages of -- advanced stages of closure of which we bid for. So from that perspective, I don't think -- and as I think Kailash mentioned, I don't think the team is planning to take any turnkey orders whatsoever for '25 or '26 also a very limited chunk. I think I don't know, Kailash, you would know better. I mean are we taking more for '26 turnkey?
Not for the next financial year, only year after, and that too very limited.
I think limited. And I think it's more on the equipment supply side, yes, we have the potential. Of course, we have the manufacturing capacity, so we could. But I think we're choosing our customers selectively, as I mentioned in 2 of my earlier conference calls. What's important is ease of doing business as well and the customers intent to pay. There is no point taking order from people who've just come up today with a [ monetary ] group of 3, 4 people, and they believe they can execute. We are very selective and focused on the guys from whom we are taking equipment supply. And to that extent, I think as we've said, we ourselves anticipate gigawatt scale execution much faster, but we are gearing up to be a 2-gigawatt supplier to the Indian market. That's all that we can say at this point in time.
Next question comes from Vipulkumar Shah from Sumangal Investment.
Sir, congratulations for a very good set of numbers. Sir, what is the timeline for execution of this CESE order.
So this is a binding agreement which we entered into, which is spread over 3 to 4 years.
Spread over 3 to 4 years. And sir, what -- when are we going to launch this new 4-megawatt turbine? And what is the energy saving of that turbine over 3-megawatt?
To be honest, we are right now focusing on 3-megawatt. 4-megawatt is basically for the future. This is what we are planning. And I think in another comment, Devansh explained it. It's a process which we'll go through. We'll do the detailed prototype, go for RLMM testing and all that. So possibly, it will take another 2 to 3 years before it becomes commercially available.
Next question comes from Pratik Kapur, an individual investor. [Operator Instructions]
We have a follow-up question from Rahul Kothari from Grit Equities.
Sir, with the demand of the wind industry expanding multifold, how is the availability of the cranes coping up since the 3-megawatt turbines are new and require different set of cranes? And secondly, for the equipment supply industry to grow, there should be -- I understand there should be an external BOP players So can you shed some light on whether the Indian industry there are players who are providing the BOP services for the cranes?
Yes. First and foremost on the cranes, there's no shortage of cranes. I mean if you don't plan and suddenly ask for a crane, you won't get it. I think from our organization perspective, there is no challenge. We've anticipated what we need. We've got all of them in place. And for our future, we'll tie it up well in [indiscernible] and when we need it. I can't comment about others.
Secondary with respect to other BOP service providers. There are a few small guys, let's put it like that, unorganized or maybe 1 or 2 organized players who are doing this. They have the ability to give 200, 300, 400 megawatts in a -- not beyond that. And in a certain state, they're not pan-India players. So I think, as I would say, execution. Turnkey is something which we believe is a very, very strong USP, a very strong moat in Inox, and we will leverage it to the hit. I can't comment with respect to other players in the market, the large IPPs, some of the very large IPPs have the capability to do it. They are doing it to some extent. Some of them have failed to do it because that's not their co-competence. But yes, there is a significant shortage of quality BOP service providers in the market.
Just to add that we have a good partnership of many of our crane suppliers and BOP service provider. So typically, they know in advance how we are building, what sites are coming up, where we are executing. So this shouldn't become a concern at all from that point of view.
Next question comes from [indiscernible]
Congratulations on a good set of numbers. Just a couple of bookkeeping questions. Can you shed an execution megawatt number for the quarter. Also the closing net debt, the interest-bearing net debt, if you can?
So the execution was over 100 megawatts this quarter around 104 megawatts. And as for net debt, as we had informed in an earlier question, is around INR 450 crores to INR 500 crores. This is a net interest-bearing debt which are there.
No, I mean, don't get colored by the current interest because there's a lot -- the money came in, in November and also a lot of the prepayments are happening. These were NCDs long-term debt. So it's a bilateral negotiation, we won't see the loans which we could repay. So there are exceptional charges, which are coming in, in the onetime costs. So the interest cost of 60 is not the cost at which we are. We are potentially today at about INR 30 crores, which we expect to virtually become 0 over the next 2 odd quarters.
Right. And there will be bank R&D charges, which will be around INR 20 crores to INR 25 -- sorry, INR 50-odd crores annually, right, if I understand it.
So that's part of this whole thing, right? That's why I said if you're going to be roughly on INR 50 crores, that includes the interest-bearing debt. That includes your onetime bank charges, LC charges, BC charges and BG charges. What we anticipated over the next 2 quarters potentially earlier. But over the 2 quarters, we are net debt free, right? And a lot of the bank charges are going to further come down as we are moving forward, given the strengthened operations and the profitability profile, which bankers are seeing as we move forward.
Right. Now what I was saying to address is 2 or 3 quarters down the line when the entire debt sort of interest-bearing debt gets paid down, there will be INR 50-odd crores of annual bank guarantee charges, right? That's the broad number we should book with?
Annual bank guarantee charges would be close to INR 10 crores per annum.
Thank you. That would be the last question for the day. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Door Sabha's conference call service. You may disconnect your lines now. Thank you, and have a good day.