Multibagger green energy stock rose 204% in six months; overbought on charts; what’s next?

Shares of multibagger Inox Wind Ltd have delivered 204% returns in the last six months. In comparison, BSE 500, the parent index has surged 16.88% during the period.  Inox Wind shares ended 1.18% lower at Rs 510.15 on Friday. Market capitalisation of the firm fell to Rs 16,628 crore. Total 0.45 lakh shares changed hands amounting to the turnover of Rs 2.29 crore on BSE.      

The stock hit a 52-week low of Rs 89.60 on February 6, 2023 and a 52 week high of Rs 540 on January 3, 2024.     

Inox Wind shares have a beta of 0.7, indicating very low volatility in a year.    

Systematix Institutional Equities is bullish on the green energy stock with a price target of Rs 575.   

"Over the last four months, Inox Wind raised Rs 1,300 crore through the promoter entities’ equity stake sale in the company, the proceeds of which will majorly be used to pay off interest-bearing debt. The drop in interest costs will help boost its earnings over the forecasted period. We introduce FY26 estimates and revise our FY24E/FY25E EBITDA by 9%/+15% based on execution assumptions and the mix of 2MW/3MW WTGs. We expect Inox Wind to execute 450MW/600MW/800MW orders in FY24/FY25/FY26. We value Inox Wind at 30x FY26E to arrive at a revised target price of Rs 575/share," said the brokerage.   

Shiju Koothupalakkal, Technical Research Analyst, Prabhudas Lilladher expects the stock to hit Rs 555 mark in the short term.  

“The stock has witnessed a spectacular bull run in the last two months gaining from Rs 190 zone and currently making a high of Rs 540 levels where it has found some resistance. The indicators have attained their highly overbought zone and some cooling off cannot be ruled out with near-term support visible at around Rs 465-470 zone. On the upside , there is some steam left with 555 level as the near-term target visible. A short correction would be healthy for the stock and once if at all, there is any correction and sustains near Rs 470 zone, then we can anticipate for second round of momentum for further rise,” said Koothupalakkal.  

Also read: Inox Wind shares in news as firm bags repeat order from large C&I player

Abhijeet from Tips2trades said, “Inox Wind is extremely overbought and bearish on the Daily charts with strong resistance at 547. A daily close below support of 500 could lead to target of 439 in the near term.” 

In terms of technicals, the relative strength index (RSI) of the stock stands at 80.7, signaling it's trading in the overbought zone. The stock is trading higher than the 10 day, 20 day, 30 day , 50 day, 100 day , 150 day and 200 day moving averages.     

The stock has rallied 373.24% in a year.       

Inox Wind's consolidated net loss narrowed to Rs 26.84 crore in the September 2023 quarter due to higher revenues. The firm reported a loss of Rs 132.9 crore in the September 2022 quarter. The company posted a consolidated net loss of Rs 64.59 crore in Q1 FY24.  

Revenue from operations rose to Rs 384.40 crore in Q2 of the current fiscal from Rs 112.1 crore in the same period a year ago.  

Inox Wind is an India-based integrated wind energy solutions provider. The company is engaged in the business of manufacture and sale of wind turbine generators (WTGs). It also provides erection, procurement and commissioning (EPC), operations and maintenance (O&M) and common infrastructure facilities services for WTGs and wind farm development services.    

Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as an investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions. 

 

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