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India

Inox optimistic despite loss in Q3

INDIA: Turbine manufacture Inox Wind made a loss of INR 461.2 million ($7.2 million) for the third quarter of its financial year amid a downturn in the country's market and the change from a tariff system to an auction mechanism.

Inox stated its loss in the third quarter was expected due to the transition from regulated tariffs to an auction-based regime
Inox stated its loss in the third quarter was expected due to the transition from regulated tariffs to an auction-based regime

The results marked a small rise from the second quarter — when it made a loss of INR 468.1 million ($7.3 million) — but was down 143% year-on-year, the company’s financial results reveal.

The heavy loss came despite Inox slashing its expenses from INR 10.2 billion ($160.9 million) in the third quarter of India’s 2017 financial year to INR 1.6 billion ($25.4 million) — an 84% reduction year-on-year.

Inox stated that this was to be expected due to the transition from regulated tariffs to an auction-based regime and a "temporary downturn" in the Indian wind industry.

The shift to an auction-based system caused a lull in turbine sales and installations as developers and financial institutions adapted to the new rules and the lower prices.

But the manufacturer added it believed India’s wind power industry was "entering a phase of robust growth" following the announcement of future auctions.

The third SECI (Solar Energy Corporation of India) auction, due to take place later in February, will procure 2GW, and Inox said it looks forward to two further 10GW auctions in India’s 2019 and 2020 financial years.

Devansh Jain, Inox’s executive director, said: "This provides clear visibility on the order inflow for the sector in the coming quarters.

"In our view, the clarity on the quantum of the auction pipeline, issuance of regulatory guidelines, and a renewed focus on increasing the renewable energy footprint in the country all combine to provide an upward trajectory for the sector."

Despite the financial downturn, Inox ended the third quarter with an auction-based order book of 600MW, it said. The manufacturer had won 250MW in the second SECI auction and another 50MW "from a leading IPP (independent power producer)" to add to its backlog.

Jain added that Inox expected the company’s order book to be strengthened following SECI and Maharashtra state (500MW) auctions.  

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