Inox Wind Ltd Valuation Shifts Signal Price Attractiveness Decline Amid Market Volatility

Valuation Metrics and Market Context

As of 17 Feb 2026, Inox Wind’s P/E ratio stands at 34.83, a figure that remains elevated compared to many of its industry peers but has moderated from previous levels that classified it as 'very expensive'. The price-to-book value ratio is currently 2.68, indicating that the stock is trading at nearly three times its book value, a premium that investors must weigh carefully against the company’s fundamentals and sector outlook.

Other valuation multiples such as EV to EBIT (24.19) and EV to EBITDA (19.08) further underscore the premium valuation, although these have shown slight easing relative to prior assessments. The PEG ratio of 0.48 suggests that, despite high absolute valuations, the stock’s price growth relative to earnings growth remains somewhat attractive, signalling potential value for growth-oriented investors.

Comparative Analysis with Peers

When benchmarked against competitors within the renewable and heavy electrical equipment space, Inox Wind’s valuation profile presents a mixed picture. For instance, ACME Solar Holdings is rated as 'Very Expensive' with a P/E of 27.21 and EV/EBITDA of 13.39, while Indosolar also falls into the 'Very Expensive' category with a P/E of 31.01. Conversely, companies like Websol Energy and Insolation Energy trade at more moderate valuations, with P/E ratios of 12.08 and 20.95 respectively, highlighting Inox Wind’s relatively stretched valuation.

More extreme valuations are seen in firms such as Inox Green and Ujaas Energy, which are classified as 'Risky' due to their exceptionally high P/E ratios of 85.65 and 804.54 respectively, alongside volatile EV/EBITDA multiples. This spectrum of valuations within the sector emphasises the importance of discerning quality and growth prospects when assessing price attractiveness.

Financial Performance and Returns Analysis

Inox Wind’s recent financial metrics reveal a return on capital employed (ROCE) of 9.49% and return on equity (ROE) of 7.81%, figures that are modest within the heavy electrical equipment industry. These returns, while positive, may not fully justify the premium valuations currently assigned by the market.

The stock’s price performance has been under pressure, with a day change of -4.93% and a current price of ₹101.15, down from a previous close of ₹106.40. The 52-week high of ₹201.00 contrasts sharply with the recent lows near ₹97.50, reflecting significant volatility and investor uncertainty.

Comparing Inox Wind’s returns against the Sensex benchmark further highlights the stock’s challenges. Over the past year, Inox Wind has declined by 41.19%, while the Sensex has gained 9.66%. Year-to-date, the stock is down 18.16% versus a modest 2.28% decline in the Sensex. However, the company’s longer-term performance remains impressive, with a three-year return of 333.19% and a five-year return of 490.66%, substantially outperforming the Sensex’s 35.81% and 59.83% gains respectively.

Valuation Grade Downgrade and Market Sentiment

On 9 Oct 2025, Inox Wind’s Mojo Grade was downgraded from Hold to Sell, reflecting a reassessment of its valuation attractiveness and risk profile. The current Mojo Score of 37.0 corroborates this cautious stance, signalling that the stock is viewed as less favourable relative to its peers and market conditions.

The downgrade aligns with the shift in valuation grade from 'very expensive' to 'expensive', indicating that while the stock remains pricey, some moderation in multiples has occurred. This nuanced change suggests that investors are recalibrating expectations amid concerns over earnings growth sustainability and sector headwinds.

Implications for Investors

Investors considering Inox Wind must weigh the company’s strong historical returns and growth potential against its current valuation premium and recent price weakness. The elevated P/E and P/BV ratios, while somewhat reduced from prior extremes, still suggest limited margin for valuation expansion without commensurate earnings growth.

Moreover, the company’s moderate ROCE and ROE figures imply that operational efficiency and profitability improvements will be critical to justify current price levels. The stock’s underperformance relative to the Sensex over the past year and year-to-date period further emphasises the need for cautious positioning.

Given the sector’s competitive landscape and the presence of peers with more attractive valuation multiples, investors may find better risk-adjusted opportunities elsewhere. The recent downgrade in Mojo Grade to Sell reinforces this view, signalling that market sentiment has turned more cautious on Inox Wind’s near-term prospects.

Looking Ahead

Going forward, monitoring Inox Wind’s earnings trajectory, capital allocation efficiency, and sector developments will be essential. Any improvement in ROCE and ROE metrics, alongside stabilisation or growth in earnings, could help restore investor confidence and support valuation re-rating.

However, absent such catalysts, the stock’s current valuation and market sentiment suggest limited upside potential, with downside risks from broader market volatility and sector-specific challenges.

Summary

Inox Wind Ltd’s valuation parameters have shifted to reflect a more cautious market stance, with the stock now rated as 'expensive' rather than 'very expensive'. Despite strong long-term returns, recent price declines and a downgrade in Mojo Grade to Sell highlight concerns over price attractiveness and earnings growth sustainability. Investors should carefully assess these factors alongside peer comparisons and sector dynamics before committing capital.

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