INOXWIND

IWL:NO!:56:2020 7thFebruary, 2020 The Secretary The Secretary BSELimited National Stock Exchange ofIndia Limited Phiroze Jeejeebhoy Towers Exchange Plaza, Bandra Kurla Complex Dalal Street, Bandra (E), Mumbai 400 001 Mumbai 400 051 Scrip code: 539083 Scrip code: INOXWIND Sub: Disclosure of Material Event/ Information under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 - Earnings Presentation Dear Sir/ Madam, Pursuant to the Regulation 30 ofthe Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations, 2015,please find enclosed acopyofthe Earnings Presentation on the Standalone and Consolidated Unaudited Financial Results ofthe Company for the quarter and nine months ended 31stDecember, 2019 that we propose to make during the Conference Call for analyst and investors scheduled to be held on Friday, 7thFebruary, 2020 at 5:30 P.M. The said Earnings Presentation is alsobeing uploaded onthe Company's website, www.inoxwind.com. Werequest you to please take the above on record. Thanking You Yoursfaithfully, For Inox Wind Limite Encl:As above INOXWINDLIMITED,PlotNo.17.Sector16A.NOlda-201301.(UP.). INDIA.Phone +91-120-6149600. Fax:+91-120-6149610 Registered Office: PlotNo.1.KhasraNo.264to267.IndustrialArea.Village-Basal.Distt.Una-174303.(HP) INDIA.Tel:+91-1975-272001 CIN L31901HP2009PLC031083. E-mail:contact@inoxwlnd.com. Web:www.inoxwind.com DISCLAIMER This presentation and the following discussion may contain “forward looking statements” by Inox Wind Limited (“IWL” or “the Company”) that are not historical in nature. These forward looking statements, which may include statements relating to future state of affairs, results of operations, financial condition, business prospects, plans and objectives, are based on the current beliefs, assumptions, expectations, estimates, and projections of the management of IWL about the business, industry and markets in which IWL operates. These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond IWL’s control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of IWL. In particular, such statements should not be regarded as a projection of future performance of IWL. It should be noted that the actual performance or achievements of IWL may vary significantly from such statements. 2 DISCUSSION SUMMARY  OPERATIONAL HIGHLIGHTS  FINANCIAL HIGHLIGHTS  SIGNIFICANT MARKET OPPORTUNITY & WAY AHEAD – Q4 FY20 & FY 21  ORDER BOOK  TECHNOLOGY  O&M – STRONG ANNUITY MODEL  RESULT ANALYSIS  WORKING CAPITAL ANALYSIS  CASH FLOW AND DEBT ANALYSIS  WIND AUCTIONS  WIND SECTOR: GAINING STRENGTH  MANUFACTURING CAPACITY  SHAREHOLDING STRUCTURE  DETAILED FINANCIALS 3 OPERATIONAL HIGHLIGHTS Operations  Successfully Commissioned 200MW of SECI 1 at Dayapar, Gujarat.  Got time extension for Balance 50MW of SECI 1 – to be executed by March 2020.  Consolidated order book: • Bagged fresh order for 250MW from Morgan Stanley backed Continuum Energy. • Bagged fresh orders for 12MW from various Retail Customers and many more orders in progress. • Order Book as on date stands at 1470.7MW.  All future project execution at Dayapar (Gujarat) to be on a plug and play basis given the common infrastructure for the same is already in place which includes: • 220KV Pooling Substation at Meghpar • 220KV Transmission Line for 72 km, longest built till now by Inox • 220KV Bay at PGCIL Nirona End 4 FINANCIAL HIGHLIGHTS Financials  During the quarter, we commenced execution of new orders along fresh supplies of WTGs.  Higher Revenue and EBITDA compared to preceding quarter: • Revenue of Rs. 173 crs in Q3FY20 against revenue of Rs. 139 crs in Q2FY20 • EBITDA of Rs. 24 crs in Q3FY20 against EBITDA of Rs. 4 crs in Q2FY20  Over all continuous improvement in working capital cycle Rs. 635 crs in Q3FY20 as compared to Rs. 828 crs in Q2FY20  Constant reduction in net debt quarter on quarter Rs. 648 crs in Q3FY20 as compared to Rs. 791 crs in Q2FY20.  Net Debt to Equity ratio stands at 0.34x (vs. 0.42x in Q2FY20). 5 SIGNIFICANT MARKET OPPORTUNITY & WAY AHEAD – Q4 FY20 & FY 21  Post the painful transition, the sector is now catching up, certain project time extension approvals which are now being acted upon by concerned authorities. As a result of the painful transition over the past ~3 years, multiple wind turbine manufacturers have either closed down or are facing severe financial issues. This has resulted in shortage of supplies of WTGs in the market. Inox sees a significant opportunity to further leverage from these manufacturers' closure/ financial problems to increase market share; moreover virtually being the lowest cost producer of wind turbines in India, is well placed to thrive under the auction regime. The tariff is also inching up and has stabilised in the range of Rs. 2.85 – 2.95/Kwh. Inox is gaining traction in the market post the transition period pain and has recently concluded new deals with Adani, ReNew Power and Continuum. Due to the lower intensity of competition and with our new 3.3MW world class WTGs, going forward, we expect to get back to normalised profit levels. 6 SIGNIFICANT MARKET OPPORTUNITY & WAY AHEAD – Q4 FY20 & FY 21 Supplies of 3.3MW to commence in FY 21 which will be amongst the most competitive WTGs in the Indian Market. This will improve our margins and also address any potential issue of lower tariffs. We will continue focus on optimization of our Working Capital cycle. Balance 50MW out of 250MW of SECI 1 (200MW commissioned upto Q2 FY20) is expected to be commissioned over Q4 FY20. Our O&M business gives us a “real” significant opportunity for monetization and has the potential for significant organic and inorganic growth. 7 ORDER BOOK Particulars Capacity MW SECI 3: 200MW Auction based order book 950 SECI 2: 300MW Others (Retail) 12 •IWL: 250MW •Adani: 50MW SECI 4: 100MW Supplied (304) Net order book 658 SECI 1: 300MW Inox Wind LOI for 3.3 MW from Adani 501.6 •IWL: 250MW Order Maharashtra state •Adani: 50MW Agreement signed with Book = auction: 50MW 23.1 leading MNC IPP for 3.3 MW 950MW Order from ReNew 38 Order from Continuum 250 Total 1470.7 •Above order book will translate into revenues of ~Rs.8400 crores over the next ~ 24 months. 8 TECHNOLOGY  Inox Wind extends its existing 2MW product offering Technical Specification with the launch of the 3.3MW wind turbines which are ideally suited for low wind regimes in India. Rated power: 3300KW Drive Train : DF, 6 Pole Generator The newly launched 3.3MW turbine is a globally Turbine Design : AMSC, Austria operating proven platform which will further improve Rotor diameter : 146m energy yields and reduce levelised cost of electricity. Tower construction type : Tubular Steel The 3.3MW wind turbine will have a 146 meter rotor Cut-in wind speed (10 min mean) Vin : 2.9 m/s dia which will probably be the largest rotor dia in Rated wind speed (steady wind) Vr : 9.5 m/s India and will be available in a host of hub heights which can be selected as per site conditions. Cut-out wind speed (10 min mean) Vout : 20 m/s 9 O&M – STRONG ANNUITY MODEL  Inox Wind has multi year O&M agreements for its fleet across customers and from the upcoming new financial year, a significant part of the WTGs will be beyond the free O&M/warranty period.  Moreover, with the increase in the fleet size on the back of strong auction order inflow, we expect this revenue stream to pick up strongly in the coming years.  O&M revenues are noncyclical in nature, have steady cash flow generation and higher margins.  Our O&M business gives us a “real” significant opportunity for monetization and has the potential for significant organic and inorganic growth. 10 RESULT ANALYSIS REVENUES EBITDA & EBITDA MARGIN (%) In Rs. Cr. 16.3% 391 13.6% 64 173 139 2.5% 24 4 Q3 FY19 Q2 FY20 Q3 FY20 Q3 FY19 Q2 FY20 Q3 FY20 REVENUES EBIDTA EBIDTA % PAT & PAT MARGIN (%) 2 0.5% Q3 FY19 Q2 FY20 Q3 FY20 (27) -15.0% (45) -31.6% PAT PAT % During the quarter, we commenced execution of new orders along fresh supplies of WTGs. 11 9 MONTHS RESULT ANALYSIS REVENUES EBITDA & EBITDA MARGIN (%) In Rs. Cr. 1,258 15.5% 196 12.1% 571 71 9M FY19 9M FY20 9M FY19 9M FY20 REVENUES EBIDTA EBIDTA % PAT & PAT MARGIN (%) 14 1.1% 9M FY19 9M FY20 (86) -14.7% PAT PAT % Post Common Infra readiness, focus is on execution and reducing working capital. 12 WORKING CAPITAL ANALYSIS – POSITIVE MOMENTUM CONTINUES In Rs. Cr. Particulars Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Inventory 779 764 756 944 933 1,086 993 Net Receivables 1,175 1,305 1,446 1,261 1,058 723 519 Payables 635 838 956 889 1,083 1,103 1,002 Others 137 5 2 1 9 103 (103) (122) (125) Net Working Capital 1,181 1,179 1,227 1,213 1,011 828 635 • Inventory: Consolidated Inventory levels are on decline mainly on account of optimization and includes the project work in progress at sites which will be commissioned over coming quarter(s). Going ahead we expect inventory levels to come down as the execution picks up pace in the coming quarters. Inventories will also be consumed towards new orders bagged by the Company. •Net Receivables: Continuous reduction in net receivables quarter on quarter. In Current quarter Net receivable reduced by Rs.204 crs which is also due to continued collection from past receivables. •Net Working Capital: Despite the huge delay in the central grid readiness, working capital cycle is improving and with the grid now finally in place, further efficiencies will kick-in and lead to further reduction in working capital. 13 CASH FLOW AND DEBT ANALYSIS In Rs. Cr. Particulars Q3FY20 Q2FY20 Q1FY20 FY19 Opening Net Debt (791) (849) (916) (705) Cash Profit ( 5) (26) 3 27 Net Working Capital 193 183 202 26 Capex (92) (95) (77) (113) Others 47 ( 3) (61) (151) Closing Net Debt (648) (791) (849) (916) Particulars Q3FY20 Q2FY20 Q1FY20 FY19 Net Debt 6 48 7 91 8 49 9 16 Equity 1 ,878 1 ,905 1 ,950 1 ,964 Net Debt: Equity (x) 0 .34 0 .42 0 .44 0 .47 Healthy Net Debt to Equity ratio of 0.34x 14 WIND AUCTIONS Auction Period Volume (MW) SECI 1 – SECI 3 Feb’17 – Mar’18 4050MW State Auctions Feb’17 – Mar’18 1500MW SECI 4 April 2018 2000MW NTPC August 2018 1200MW SECI 5 September 2018 1200MW Hybrid 1 December 2018 840MW SECI 6 February 2019 1200MW Gujarat May 2019 745MW Hybrid 2 May 2019 720MW SECI 7 June 2019 480MW SECI 8 August 2019 440MW Total 14375MW • The ~14 GW auctions conducted in the past 24 months should reflect in capacity addition over FY20 and FY21. • In addition, the government has announced wind auctions of 10GW per annum till 2028* which provides huge potential runway for the sector. • RPO target increased to 21% for FY22 for state discoms from 17% in FY19**. • Strong volume of upcoming auctions from SECI, States and Wind solar hybrid etc in the next 6-12 months. * https://www.financialexpress.com/economy/india-to-auction-40-gw-renewables-every-year-till-2028/1226479/ ** https://www.livemint.com/Money/enQ7h8JaD6rKXGXiMTsORM/Govtsrenewableenergyusagetargets-ambitious-scaling-up.html 15 WIND SECTOR: GAINING STRENGTH Withdrawal of AD Reintroduction of AD The sector witnessed an (GW) & GBI Provision & GBI Provision abrupt transition to the auction regime. 5.5 3-5 3.2 3.3 2.3 2.3 2 1.7 1.7 1.7 1.5 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E* Feed In Tariff Regime (FIT) Auction Regime Impact of the abrupt transition to auction Regime from FIT regime seen in wind installations in FY18 and FY19. The impact of 14GW auctions conducted during last two years would be visible in installations in the next couple of years. 16 MANUFACTURING CAPACITY CURRENT CAPACITY (MW) Una, Barwani, Rohika, Plant Location Himachal Madhya Total Gujarat Pradesh Pradesh Nacelles & Hubs 1,100 - - 1,100 Blades - 800 800 1,600 Towers - 300 300 600  Well positioned to take advantage of the growing market.  Potential to debottleneck our nacelle and tower capacity with minor capex.  Tower capacity can also be outsourced depending on project location. 17 SHAREHOLDING STRUCTURE Inox Wind Share Price (Rs) Market Data As on 06.02.20 (BSE) 90 Market capitalization (Rs. Cr) 862 80 70 Price (Rs.) 38.85 60 50 No. of shares outstanding (Cr) 22 40 30 Face Value (Rs.) 10.0 Feb/2019 Apr/2019 Jun/2019 Aug/2019 Oct/2019 Dec/2019 Feb/2020 Source - BSE Source - BSE % Shareholding – As of 31st Dec 2019 % Key Investors as of 31st Dec 2019 Holding Public, 12 DII, 6 Nomura Singapore Limited 4.5% Aadi Financial Advisors 1.4% FII, 7 Elaara India Opportunity Fund 1.0% Promoter & Promoter Mangal Bhanshali 1.0% Group, 75 Source - Company Source – Company 18 DETAILED FINANCIALS CONSOLIDATED P&L STATEMENT (In Rs Lakhs) Q3FY20 Q3FY19 Q2FY20 9M FY20 9M FY19 Income a) Revenue from operation (net of taxes) 17,274 39,078 13,861 57,093 125,789 Other Income 702 367 473 1,670 1,196 Total Income from operations (net) 17,976 39,445 14,334 58,763 126,985 Expenses a) Cost of materials consumed 5,437 24,972 6,434 18,828 76,556 b)Changes in inventories of finished goods, (1,522) (2,448) (3,253) (159) (2,670) work-in-progress and stock-in-trade c) Employee benefits expense 2,313 2,248 2,366 6,870 6,862 d) Finance costs 4,471 4,544 5,470 14,790 12,392 e) Erection, Procurement & Commissioning Cost 6,132 4,064 7,049 20,524 10,580 f) Foreign Exchange Fluctuation (Gain)/Loss (net) 778 (984) 15 413 (714) g) Depreciation and amortization expense 2,151 1,623 1,899 5,741 4,908 h) Other expenses 2,445 5,108 1,354 5,197 16,719 Net Expenditure 22,159 39,171 21,349 72,180 124,655 Profit/(Loss) from ordinary activities before tax (4,183) 274 (7,015) (13,417) 2,330 Total Provision for Taxation (1,436) 105 (2,455) (4,695) 972 Profit/(Loss) for the period (2,747) 169 (4,560) (8,722) 1,358 Other Comprehensive Income (after tax) 46 17 34 90 32 Total Comprehensive Income for the period comprising Net Profit/(Loss) for the (2,701) 186 (4,526) (8,632) 1,390 period & Other Comprehensive Income Earning Before Interest, Tax, Depreciation & Amortization (EBITDA) Incl Other 2,439 6,441 354 7,114 19,630 Income Paid-up Equity Share Capital (Face value of Re 10 each) 22,192 22,192 22,192 22,192 22,192 Basic & Diluted Earnings per share (Rs) (1.24) 0.08 (2.06) (3.93) 0.61 (Face value of Re 10 each) - Not annualized 19 FINANCIAL SUMMARY ROE: PAT/Avg. Equity, ROCE: EBIT/Avg. Capital Employed [(Capital Employed = Equity + Total Debt) Consolidated financials, FY13-15 as per IGAAP, FY16-19 as per Ind AS Revenue from Operations EBIDTA (Inc OI) & EBIDTA Margin % PAT & PAT Margin % 4,451 19.0% 17.4% 17.6% 18.3% 14.2% 8.4% 10.9% 10.3% 8.7% 11.8% 783 12.0% 461 3,415 626 -2.7% 472 296 303 2,709 150 132 1,567 1,437 201 185 -11.9% 173 -38.6% 1,059 480 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY13 FY14 FY15 FY16 FY17 FY18 FY19 -39 FY13 FY14 FY15 FY16 FY17 FY18 FY19 -57 -185 EBITDA (cr) EBITDA Margin % PAT (cr) PAT Margin % Return Ratios Net Debt/Equity 70% 0.92 1.05 1,844 2,190 2,004 1,964 41% 37% 0.35 0.36 33% 0.00 0.35 0.47 28% 28% 21% 27% 1,392 16% 916 15% 779 705 3% 448 641 296 428 273 5 FY13 FY14 FY15 FY16 FY17 FY18 FY19 -2% -3% -9% FY13 FY14 FY15 FY16 FY17 FY18 FY19 Equity Net Debt Net D/E ROCE % ROE % In Rs. Cr 20 THANK YOU Jitendra Mohananey Group Financial Controller Contact No: 0120 6149600 Email : Investors.iwl@inoxwind.com 21