Inox India Ltd - Management Meet and Plant visit KTAs; positive reading - 2QFY26 Company update

We have retained Buy rating on the stock but increase TP to Rs 1,540 (from Rs 1,500). Management interaction and recent plant visits at Kalol and Savli reinforced our positive view on Inox India, allayed fears of a tariff impact, and strengthened conviction in the company’s moat in the cryogenic industry. Global trends, like decarbonization (LNG, Hydrogen) and increasing cryo-scientific collaboration opportunities (ITER, ISRO, Defense), coupled with future buildout of semiconductor fabrication plants and data centers in India are credible tailwinds supporting decent growth over the next decade. Furthermore, the company will also see improved operational leverage on a ramp up in beverage kegs production in the recently constructed Savli plant. The need for a major capex over the next 3 years looks minimal. We continue to factor in an 18%/19% revenue/PAT CAGR over FY25–28E and have made no changes to our estimates . Retain BUY

Industrial gases segment an anchor; structural tailwinds for the LNG segment:

Industrial gases remain Inox India’s core and is expected to outpace industry growth of 6–8%, driven by new offerings in ultra-high-purity ammonia tanks, beverage kegs, and project-based opportunities like LAES where further orders from Highview Power may materialize by March 2026. Industry tailwinds supported by investments in data centers and semiconductors could further aid growth. The management also remains confident of a strong order book build up in its LNG segment driven by future orders for mini-LNG terminals, LNG fuel stations, and LNG fuel tanks for OEMs. Global decarbonization efforts is a long-term trend and should continue to positively impact the company.

Cryo-scientific segment expecting new order from ISRO:

With ITER project running till 2035, Inox India continues to receive enquiries across cryo and non-cryo applications which could translate into incremental business. Beyond ITER, Inox India is also pursuing other high-potential projects, including ISRO’s upcoming third launchpad which offers an orderbook potential of Rs 4-5 bn with initial orders expected by March 2026. It also recently executed an order for a leading US-based space research organization, highlighting its engineering capabilities and global credibility. With a proven track record across projects like ITER, ISRO, and FAIR, Inox India is well positioned to see sustained order inflows for the segment. The current cryo-scientific order book stands at Rs 3.3 bn, with ITER-related repair orders forming a significant portion.

Growth prospects intact with possibility of margin expansion:

Inox India’s growth is expected to be driven by (i) the global transition towards clean energy, like LNG and Hydrogen (ii) scientific research projects in space and nuclear fusion and (iii) rising investments in industries such as data centers and semiconductors.  We believe that with its domestic leadership in cryogenics and collaboration in various pilot scientific projects, the company has expanded its TAM. With growth prospects intact, a gradual ramp up of the Savli plant should also be margin accretive, though we have not yet factored that into our forecast as we await confirmed orders from global alcoholic beverage companies for kegs.

Valuation:

Our estimates have remained unchanged, but our TP has increased slightly due to valuation rollover. We have valued Inox India at 40x P/E and 30x EV/EBITDA on SEP 2027 estimates to arrive at a TP of Rs 1,540. Key risks: Sharp increase in LNG prices leading to delayed LNG adoption, delay in new cryo-scientific projects.

Company website: https://inoxcva.com/

Click to download the full Inox India Ltd. 2Q FY26 Company Update

Analyst: 

• Mohit Surana - Senior Research Analyst, Institutional Equities (NISM-202300189881)
• Mohd Haris - Research Associate, Institutional Equities (NISM-202400161268)

Open your MNCL Demat Account