Dear Stakeholders,
It is a pleasure to share my thoughts with you about the year gone by. FY 2023-24 has
been a year where Inox Green Energy Services Limited (IGESL) demonstrated its resilience
in the face of challenges, its resolute commitment to excellence and its relentless
pursuit of growth. As we continue to strengthen our position as a key player in the Indian
wind energy O&M industry, we are not merely adapting to change-we are ushering in the
winds of change.
In this letter, I have also at length discussed both our financial and operational
highlights for the reporting period. This past year, we undertook several strategic
initiatives and promoted robust operational practices to improve the performance of our
fleet while expanding our footprint through both organic and inorganic routes. I am happy
to share that our efforts have borne fruit, as we have been able to strengthen our
position in the year gone by.
Eyes on excellence and growth, always
For over a decade, IGESL has been building on its O&M asset portfolio which is
annuity-based and resilient to unforeseen challenges, establishing itself as a trusted
provider of O&M services nationwide. Our long-term contracts, ranging from 5 to 20
years, provide us with reliable and stable cash flows, ensuring a solid foundation for
sustained growth. The long-standing relationships that we have nurtured with wind farm
asset owners, spanning public sector undertakings (PSUs), independent power producers
(IPPs) and private investors, have been instrumental in our success. Leveraging our
expertise and the synergies with our parent company, Inox Wind Ltd., we are now geared to
capitalise on emerging opportunities in India's renewable energy space.
Looking at the current environment, wind O&M dynamics are shifting in favour of OEM
backed players such as Inox Green, as opposed to smaller third-party providers. Many
customers who previously managed their portfolios independently are now looking to switch
to established, specialised O&M providers due to difficulties in supply chain and cash
flow management. Additionally, we are seeing several independent service providers and
multinational OEMs exit the market, creating new opportunities for IGESL to step in and
expand our presence.
An overview of our operational and financial highlights
I am glad to report that our assets under management stood at over 3.2 GW at the close
of FY 2023-24, with machine availability averaging 96.1%-a significant improvement driven
by our continued focus on digital innovation and streamlined operations.
We have strategically positioned ourselves to seize growth opportunities through PSU
wind O&M tenders and fleets managed by IPPs. To enhance our capabilities, we have
acquired a 51% stake in l-Fox and Resowi, leading independent O&M service providers.
These acquisitions have expanded our offerings with multi-brand and specialised services.
Beyond our core wind O&M services, we also provide value-added products and services
to asset owners, creating additional revenue streams. Notably, l-Fox has secured a
contract with NLC India, a Navratna CPSU, to refurbish a 50 MW wind farm in Tamil Nadu and
will manage its O&M for the next 5 years.
Speaking of our financial performance, our total income from operations in FY 2023-24
surged to Rs. 261.2 crore, up from Rs. 237.5 crore in the previous year. Our EBITDA grew
from Rs. 97.3 crore in FY 2022-23 to Rs. 128.7 crore in FY 2023-24, reflecting improved
margins and enhanced operational efficiency. Additionally, our PAT for the year totalled
Rs. 29.8 crore, underpinning our persistent emphasis on profitability.
At Inox Green, we use a strong internal valuation framework and due diligence
methodology to prioritise the right targets for creating value. While we evaluate various
opportunities, our capital allocation policy ensures we meet defined valuation multiples
and IRR thresholds to guarantee mutually beneficial deals.
The Board has engaged consultants and a Registered Valuer to assess the demerger of our
Power Evacuation Business. The demerger of our Power Evacuation Business, once approved,
will streamline our balance sheet by removing heavy infrastructure assets. This will make
our balance sheet cleaner and more asset-light, while also eliminating depreciation costs,
ultimately enhancing the overall value of Inox Green.
Committed to driving responsible growth
As a responsible corporate citizen, we are seeking to reduce our environmental impact
through initiatives focused on climate action, water and waste management and clean
energy. I am delighted to share that our adherence to IS014001:2015 standards has resulted
in tangible improvements in our sustainability performance.
For us at IGESL, contributing to socioeconomic development is an ongoing endeavour. In
keeping with this, we continue to undertake Corporate Social Responsibility (CSR)
initiatives that widen access to affordable healthcare and quality education while also
offering skill development programmes to enable inclusive growth.
As part of our commitment to responsible growth, we also introduced the ‘VayuVeer'
programme. This initiative focuses on developing highly skilled professionals through
six months of technical and on-the-job training. This will create sustainable business
operations with more effectiveness and cost control to achieve the desired results while
creating job opportunities for local youth and fulfilling our social commitments.
Our vision for the future
As we look ahead, we are excited to share that IGESL plans to nearly double its O&M
portfolio in revenue terms, growing from its current levels to 6 GW by FY26, and 10 GW in
the following 3-4 years. With around 80 GW of new wind capacity expected over the next 8
years according to the National Electricity Plan, we see a tremendous opportunity for our
O&M services to thrive.
With a proven track record and a well- defined growth strategy, we are poised to
deliver superior value to our shareholders while substantially contributing to India's
green energy ambitions. Before I conclude, I would like to extend my heartfelt gratitude
to all our stakeholders for their continued support in our journey so far.
Best regards,
SK Madhusudhana
Chief Executive Officer.