Prominent brokerage firm JM Financial has initiated coverage on INOX India, suggesting a ‘BUY’ with a target price of INR 1,240 per share. The brokerage sees a potential upside of 26% from its current levels. For seasoned investors familiar with the company’s trajectory since its IPO, this comes as both validation and a reminder of the latent potential within India’s quiet cryogenic powerhouse.
INOX India often flies under the radar. It is India’s largest manufacturer of cryogenic equipment, boasting over 30 years of engineering excellence, global certifications, and an impeccable execution track record. The company operates across three primary segments—Industrial Gases, LNG, and Cryo Scientific Division (CSD)—and has more recently forayed into stainless steel beverage kegs, a business that’s already showing promise.
Market Dominance
What sets INOX India apart is its sheer scale and market dominance. With FY24 revenues pegged at INR 1,130 crore, the company is reportedly four times the size of its nearest Indian competitor (VRV Asia Pacific) and six times larger than Cryolor. As regulatory barriers remain high in cryogenic manufacturing, given the complex engineering, safety, and compliance requirements, INOX’s early and aggressive investment in global certifications has made it a preferred supplier globally.
JM Financial’s report underscores these structural moats, emphasizing that the company is not just a domestic leader but one of the top players globally. The brokerage notes, “INOX operates in a heavily regulated industry with high entry barriers, and its global compliance credentials position it favorably across international markets.”
Business Growth
Beyond its legacy in cryogenics, INOX India is now preparing for high-growth adjacencies—from semiconductor supply chains to LNG trucking, and a growing keg business. In particular, the Savli-based stainless steel keg manufacturing facility, developed with an INR 200 crore investment, is expected to contribute up to 10% of revenues by FY27.
JM Financial projects a 16% CAGR in earnings between FY24 and FY27, with RoE averaging 30% and a strong cash flow profile—hallmarks of capital-efficient compounders. Valuing the company at 37x FY27E EPS, JM assigns the INR 1,240 price target while noting several upside triggers, including:
- The emerging semiconductor ecosystem in India, which could significantly increase demand for precision cryogenic equipment,
- Rising LNG usage as a trucking fuel,
- Full-scale ramp-up of the beverage kegs vertical.
A Professional Core
INOX’s promoter group, the Jain family, is actively involved in strategy, but the operational reins lie firmly with a professional leadership team. The CEO and CFO have been with the firm since the early 1990s, while divisional heads in Industrial Gases, LNG, and CSD bring decades of institutional memory to the table.
This blend of visionary promoters and long-tenured professionals creates a stable foundation, a rarity among mid-cap industrials.
INOX India Post-IPO Performance
INOX India launched its IPO on 14 December 2023 with an issue size of INR 1,459.32 crore. The IPO got an overwhelming response from the investors and was subscribed to 60.9X. The listing performance was as impressive as the subscription, the IPO delivered 42.42% returns on listing.
Notably, INOX India reached its all-time high of INR 1,441.80 per share on 5 July 2024, reflecting a multibagger 118% return on investment. Currently, the stock is trading around INR 983 per share with a correction of 31% from its all-time high.
Risks to Watch
No investment story is without its caveats. JM Financial flags the key risks to INOX’s future performance, which include:
- Regulatory hurdles in new markets or sectors,
- Order delays or cancellations in a volatile global environment,
- Execution dependency on product development for newer businesses like semiconductors and kegs.
The Verdict
For investors who spotted INOX India during its IPO, today’s coverage initiation by JM Financial feels like a full-circle moment. With industry leadership, moat-worthy operations, and expansion into scalable verticals, INOX India appears well-positioned to deliver on both value and vision. As institutional interest builds, retail investors would do well to take notice—because this cryogenic giant is just heating up.
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Disclaimer: This article is for informational purposes only and not investment advice. Please consult a financial advisor before making decisions.