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Check Before You Invest : Inox Green Energy Services Ltd

BSE: 543667 NSE: INOXGREEN ISIN: INE510W01014
  |   Sector:  Construction & Infrastructure   |   Industry:  Engineering - Construction

Snapshot

Q.1 Which industry/sub-sector does Inox Green Energy Services Ltd belong to?
Inox Green Energy Services Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Engineering - Construction segment.
Q.2 Is Inox Green Energy Services Ltd a good quality company?
Inox Green Energy Services Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Inox Green Energy Services Ltd undervalued or overvalued?
Inox Green Energy Services Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 130.38 103.80
Price to Book 3.21 2.56
Price to Sales 30.08 18.15
EV to EBITDA 55.53 35.66
Q.4 Is Inox Green Energy Services Ltd a good buy now?
Inox Green Energy Services Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Inox Green Energy Services Ltd?
Inox Green Energy Services Ltd revenue growth is 1.4% for FY-2025, which is above its 5-year CAGR of -12.52%, indicating faster growth.

Q.2 Gross Profit margin of Inox Green Energy Services Ltd?
Inox Green Energy Services Ltd Gross profit margin which is the profit after deduction of direct costs, is 52.3% for FY-2025, which is above its 5-year median of 24.3%, indicating increasing margins.

Q.3 Operating Profit Margin of Inox Green Energy Services Ltd?
Inox Green Energy Services Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 23.88% for FY-2025, which is below its 5-year median of 39.56% indicating decreasing margins.

Q.4 Net Profit Margin of Inox Green Energy Services Ltd?
Inox Green Energy Services Ltd Net Profit Margin is 18.81% for FY-2025, is above its 5-year median of -2.53%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 52.3 24.3
Operating Profit Margin (%) 23.88 39.56
Net Profit Margin (%) 18.81 -2.53

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Inox Green Energy Services Ltd?
Inox Green Energy Services Ltd Return on Asset is 1.83%, which is above its 5-year historical median of -0.21%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Inox Green Energy Services Ltd?
Inox Green Energy Services Ltd Return on capital employed is 3.9% for FY-2025, which is above its 5-year historical median of 3.11%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Inox Green Energy Services Ltd?
Inox Green Energy Services Ltd Return on equity is 2.49% for FY-2025, which is above its 5-year historical median of -0.87%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Inox Green Energy Services Ltd?
Inox Green Energy Services Ltd Cash conversion cycle is 284 days, above its 5-year historical median of 41 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.1 0.1
ROE (%) 2.49 -0.87
ROCE (%) 3.9 3.11
Cash Conversion Cycle 284 days 41 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Inox Green Energy Services Ltd?
Inox Green Energy Services Ltd Debt-to-Equity ratio is 0.07, which is lower the industry average of 0.38, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Inox Green Energy Services Ltd?
Inox Green Energy Services Ltd Debt to cash flow from operations is 1.77, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of Inox Green Energy Services Ltd?

Q.1 Promoter shareholding and pledge status of Inox Green Energy Services Ltd?
Promoters hold 56.12% of the Inox Green Energy Services Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Inox Green Energy Services Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Inox Green Energy Services Ltd vs industry peers?
Inox Green Energy Services Ltd revenue CAGR is -12.52%, compared to the industry median CAGR of 0.00%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 1.4 0
Gross Profit Growth (%) 13.8 16.3
Operating Profit Growth (%) -38.8 13.9
Net Profit Growth (%) 225 20.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.1 0.62
ROE (%) 2.49 6.32
ROCE (%) 3.9 10.58
Cash Conversion Cycle (days) 284.01 51

Valuation & price assessment

Q.1 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 130.38 103.80 21.52
Price to Book 3.21 2.56 1.74
Price to Sales 30.08 18.15 1.51
EV to EBITDA 55.53 35.66 11.49
Q.2 Stock return of Inox Green Energy Services Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of 61.42% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - 61.4% 42.7%
Q.3 Valuation ratios of Inox Green Energy Services Ltd vs historical?
The current P/E ratio of 130.38 is higher than its historical median of 103.80, indicating that the stock is trading above its historical average valuation.

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