Genus Power Infrastructures Limited (530343) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Genus Power Infrastructures Limited Q2 and H1 FY '22 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Kailash Agarwal, Vice Chairman of Genus Power Infrastructures Limited. Thank you, and over to you, Mr. Agarwal.

Good evening, ladies and gentlemen. A very warm welcome to the Q2 FY '22 earnings call of the company. Along with me in the call is Mr. Jitendra Agarwal, who is the Joint Managing Director of the company; and SGA, our Investor Relation advisers. The results and investor presentations are already uploaded on the stock exchange and company website. I hope all must have got a chance to see it. Installation of smart meter was expected to gather pace in Q2 FY '22 post the weakening of COVID-19 wave and widespread vaccination coverage in India. Since June 2021 onwards, the acute shortage of semiconductors has led to a very tough period for the Indian smart metering industry. You might be reading it every day that there is a huge shortage of semiconductors. And thus, our capacity utilization fall drastically to a level of almost, say, 35%, 40%. But now, the normalcy, we expect that semiconductors will be restored in the next 4 to 5 months. We have already drawn plans and secured supply of semiconductors for the entire next fiscal year, assuming capacity utilization in excess of 90%. So we have already secured for almost 1 crore of meters -- semiconductors. We have recorded a sales of around INR 178 crores in Q2 FY '22 as compared to INR 165 crores in Q2 FY '21. For Q2 FY '22, EBITDA stood at INR 14.5 crores as compared to INR 34 crores in Q2 FY '21. EBITDA margins reduced sharply on account of higher raw material prices and lack of absorption of fixed costs on account of poor capacity utilization. As we have all contracts of fixed rates, we don't have any price escalations on that. Profit after tax stood at INR 6.6 crores as against INR 6.8 crores in Q2 FY '21. Order inflow has remained subdued, as a lot of tenders which are about to be finalized when -- to re-tendering after the central government came out with model standard bidding documents. The state electricity boards are likely to submit their detailed project report, DPR, as per the guidelines of the reform-based, result-linked power distribution sector scheme by the end of December 2021. Thus, we anticipate robust order inflows starting from January '22 onwards. We expect sizable order book by the end of March '22. Our current order book stood at INR 882 crores, which gives revenue visibility of over next 2, 3 quarters. With the DRAM distribution sector scheme, the central government has done away with one-size-fits-all approach of previous schemes. Most of the apprehensions of SEB has been addressed by customizing the policy guidelines as per their respective specifications. Thus, all stakeholders are onboard, and the rollout of smart metering scheme across India is anticipated to be very smooth and right. Though the objective of the scheme is to install 10 crore meters by December '23 and the first phase is very optimistic, we anticipate that even the same target is achieved by the end of December or, say, by mid of '25, it would still present an enormous growth opportunity for Indian smart metering industry. The TOTEX model is being promoted heavily among SEB wherein the CapEx will be undertaken by system integrators. From the monthly saving made on account of the smart meters, the SEB will undertake monthly payments through system integrators for a period of 6 to 8 years. We plan to play dual roles of being system integrators ourselves as well as being vendors to other system integrators for their smart metering requirements. Smart metering solution improves the billing efficiencies to almost 100%. A report by the Energy Efficiency Services Limited. ESL showed that all states where smart meters were installed had good results with an average increase in billing of nearly 25%. The process of drafting SBD is nearing completion and are likely to be finalized by -- finalized very soon. Also, the SEBs are likely to submit their detailed project report by the end of December '21. Post which, the rollout of the revamp distribution sector team will gather rapid pace. The installation of smart meters under the new scheme is anticipated to commence by April '22 onwards, by which period, we also expect the supply of semiconductors to largely normalize. The demand is now likely to increase shift from conventional meters to smart meters. We are confident of sustaining our margins going ahead as product mix changes in favor of smart meters. Also, as proportion of smart meters in the overall pie of meter increases, the margin profile of our business will gradually improve. Also, as a strategy, we have designed our building and manufacturing infrastructure in a way which will enable us to easily double our manufacturing capacity in short period of 6 months whenever required. India's energy consumption is set to grow 4.2% a year by 2035, fastest among all major economies. More than 28 crore consumers are grid connected, whose conventional meters will need to be replaced by smart meters. Thus, there is a tremendous growth prospect for us in the years ahead, and we are fully geared up to capitalize on this enormous opportunity. We have continued to focus on technology upgradation and operational efficiency to serve our long-lasting relationship with our clients, which have engraved our leadership position. In smart meters, company will also have a lot of opportunity in terms of recurring revenue as facility management system, FMS, will also be the part of the contract. We, as a company, are specifically targeting recurring revenue as an avenue for sustaining our growth. We also plan to provide our domain-related software to our clients. We can now open the line for question and answers.

[Operator Instructions] The first question is from the line of [ Amit Shah ] from Ace Securities.

Sir, as you mentioned in your press release, the unavailability of semiconductors have led to how much loss in our revenue for this quarter? Can you provide a ballpark number?

This is Jitendra Agarwal. As we -- during the presentation also, Vice Chairman made it very clear, we are running at 35%, 40% currently. So that is the kind of production we are able to do in the current stage due to the availability of semiconductors and electronic components.

Normally, we run at a capacity of 65%, 70%. So almost, you can say that we are running at a 60% capacity what we normally run.

And sir, when do you expect the availability of the semiconductors to normalize?

So if you will see, worldwide, the normalcy will take definitely 8 to 12 months. But since we have already -- we knew about it, we have already done a lot of planning in terms of our design product availability. So we, as a company, will see this normalcy by the month of April, May. We'll be quite a normal company in terms of availability of electronic components.

So we have already tied up for the semiconductors for the next whole financial year. We're seeing the things and old relation with the semiconductor suppliers and all. We have changed our designs also. A lot of work we have done on our designs also. So we expect that we will be totally normal in this case by the end of March or, say, start of April.

Okay. So that was helpful, sir. Sir, and also, sir, you have mentioned that we have secured semiconductors for smart meters for the next financial year. Sir, assuming 90% capacity utilization in FY '23, can you throw some more insight on the same? And how much revenue can we expect in FY '23?

Kailash sir, you want to take it or you want me to?

You take it.

So FY '23, we expect we should be back to our normal days, that 70%, 80% of the capacity we used to use. This is how we have planned our semiconductor availability also. And when it comes to revenue because these are going to be smart meter primarily, we should be doing at least INR 1,300 crores at the top line for next in year. That is too conservative for me in the current scheme of the things.

So basically, you can take it like that. But right now, we will be giving a guidance that is also a conservative guidance. Because depending on the orders, what flow the orders will come, we are very hopeful that there will be a lot of orders in next coming months, next 2, 3 months. And we are hopeful that our opening order book for the next financial year will be very great. So depending on that, we hope a very good number. So whatever the numbers we are giving you, INR 1,200 crores, INR 1,300 crores is also a conservative number as per we think and seeing the current scenario.

Okay. Sir, and my last question, sir, could you provide the total tender amount which we have already bidded? And when can we expect these tenders to get awarded?

So currently, generally, we break our tender into 2. The one is which will be participated and one -- those are already participated. So tenders which we have already participated is around 4,500 crores, which we expect them to be decided in next 4 to 5 months. Next month, these tenders will be decided. And what tenders we're going to participate in the next 2 to 3 months, these are already live, open, which has due dates like December and January, mid-January and is around INR 6,200 crores. So in total, INR 10,800 crores inquiries are floating in the market.

Next question is from the line of Ashit Kothi from Almondz Global Securities.

Sir, my question is more as an individual investor. And when you all said that we would be having the 80% capacity utilization in '23, that would amount to that -- in terms of both the categories as a system integrator as well as vendor business or only as a system integrator? That is one. And when we say 80% to -- 80% capacity utilization, in that case, the turnover could be approximately around INR 1,200 crores and a net profit margin of around 10% or semiconductor margin would still -- semiconductor would still eat away our margins?

So I'll reply this in 2 ways. The first is, when we say as a system integrator, at the end of the day, we are talking about production capacity. So whether we are supplying to a system integrator or we ourselves are doing the job of a system integrator. 80% capacity, which is utilization, what we are talking is for the production capacity capability only. There's nothing to do with being a system integrator or being a supplier. Second thing, when we talk of margins and the top line, yes, margins have some pressure because of the semiconductors, but we surely see these -- the commodities are at all-time high. So very frankly, I see extraordinary times coming up for people like us because when things are going so up and our order book is very normal in the current state. A lot of orders will flow in the next 3 to 6 months. And in 12 months. A lot of business is coming in on the floor and a lot of tenders will be decided. And these are all long-term contracts and fixed price contracts. If you will see, after 12 to 18 months, what conditions we're in today, yes, we have been badly hit because of the semiconductors, that trend will be much better for companies like us who have long-term contracts and prices will have to come down. So these are abnormal situations. And when you quote in the abnormal situation, you obviously -- your prices are better.

So basically, to add on this, we have to understand that whatever the margin pressure that comes to us, that is we are in a fixed price business, and these all are the old orders, which we are executing right now. Now whatever tenders we are participating, whatever the prices we are giving, we are giving on the basis of today's current commodity prices and today's current semiconductor prices and all. So whenever we will receive these orders, they will be, again, the fixed price contract. So whatever the correction -- we anticipate a good correction in the prices of commodities also and we anticipate a good correction in the price of semiconductors also. So whenever these corrections will come, that will benefit to the company. Because, again, now whatever the orders where we will be getting in new tenders are quoted as per the current prices, and ours is a fixed price contract, so we will be getting a benefit. Whatever loss we are making right now, we will be doing far better than in that in-coming time because of that.

Two questions. One is a short question, semiconductor in final product cost is falling how much? That is one part. And second question was basically with regards to a merger of your subsidiary companies, so the rationale of creating those subsidiary companies, infra companies and then now merging and the ratios which has been given, so any financial resolution on what basis this valuation has been done on -- for the swap ratio?

So regarding the semiconductors ratio, basically, we have to come back to you. You'll see that what exactly is said.

But it is not only semiconductor -- let me answer the first question, [indiscernible] is not depending only on the semiconductor and price of each and every commodity has increased substantially in the current market scenario. It's not only an economic component which have given pressure on the margin. It is your [indiscernible] metal, brass or everything is giving pressure on the margin. So the commodities are at all-time high. So it's not only semiconductor, which is giving the pressure. Sir, you can take the second question.

Basically, whatever -- these all ratios are being divided by -- are derived by the valuations done by the companies, the top companies we have appointed, like KPMG and other valuation companies and all. So whatever swap ratio or that valuation they have given in the swap ratio they given is being seen by the Board and approved by the Board.

No, I'm not raising question on that. The point is, having more information on the same, that is one part of it. And second is, the rationale of having those subsidiaries earlier as an infra company or as an investment company which are they and now merging the same within the company?

No, no, we are not merging anything within the company and there is no subsidiary of Genus Power.

No, you are merging it with -- we are now dividing the company into 2 part, right?

No, no, we are not dividing the company into the 2 part. We are just demerging investment division of that part to a separate company. That's all -- on as-need ratio. And that infra company has nothing to do with Genus Power.

So the Genus investment would be basically infra investment company? What exactly the structure of that company would be?

Basically, there is an investment division of Genus Power, where Genus Power is having investments in different companies. So basically, to make it a pure power play metering company only and to get out of any other things -- any long-term investments and all from the company, we are demerging this investment which belong to a separate company, which is a separate company and that investment is going to that company. And the shareholders of Genus Power is getting shares of that company also against this demerger. And all the valuations have been done as per the norms.

So what would be the focus after the demerger in that company, new company?

Focus is basically metering only that is why Genus Power is doing this. Basically, Genus Power wants to be a pure metering company. The total focus will be the metering only in Genus Power.

No, I'm talking about Genus Prime Infra.

Still it will be, again, an investment company only. It's just the investment company that. Right now, also, it's an investment company. At that time also, it will be investment company. There is no running business in that.

[Operator Instructions] Next question is from the line of [ Suraj Navandar from Sampada Investments. ]

Sir, hearing your answers to the previous participants, can you say that the worst is behind for the company?

Your voice is not very clear. Can you please come closer?

Is it better now?

Yes.

Yes. Sir, listening to your answers to the previous participant, can you say that worst is behind for the company and things can only look up from here?

The only thing on this statement I can tell you I have never seen so important in my life than what I have felt in last 45 days. I've not traveled the way I've traveled in the last 45 days because the whole country is looking for this smart metering, each and every distribution company. Each and every customer is seeking to meet us, get presentations from us and looking forward to things that is completely smart metering. Because the pressure on the central government and the need of the smart meters is the best we could dream of. So worst is over, for sure, and we are only looking ahead in the times to come. Whatever the bad results are mainly due to the commodities and semiconductor and things has to improve in the future. They have to improve for very good.

So I will add that the worst is over for securing the orders. There will be a lot, lot of orders in coming months. And worst will be over in next 3 to 4 months for execution. So there -- so worst for ordering, for getting business is over, and we are expecting a lot of business. And execution might take another 3, 4 months to regularize because of these semiconductors, commodities and old orders and all, everything. So you can say that worst is over.

Okay. And sir, what is the utilization rate in this current quarter going on? What is the utilization growth currently, as on today?

So there will be an improvement from second quarter, for sure. There is no doubt in that. There will be improvement in third quarter, better than second quarter. And fourth quarter will be further better than third quarter. And as we told that things will be online by first quarter of next financial year as all these problems what we are facing right now with the old orders, semiconductors, some commodity things and all, that will all will be over, and a lot of a big order book will also be there.

Sir, how much worth of old orders are pending where our margins are under pressure?

So the current order book, which is selling...

The company's order book is old order book, and margins are under pressure in the company's order book?

See, exactly, we will not say that it is around INR 800 crores. It's because whatever the orders we have got in the last 2, 3 months, say, last quarter of around INR 150 crores to INR 200 crores. These orders are for the new prices or a better prices than the old orders and all. But still, we can say that INR 500 crores, INR 600 crores or whatever will be executed in next 2 quarters, it will be over, for sure. In the next 2 quarters, whatever the pressure we are facing due to our old order book and all.

Next question is from the line of [ Shantanu Chatterjee from Mount Intra Finance Private Limited. ]

I have got a couple of questions. First question is, in metering business, how much margin expansion is expected due to change from electronic meter to smart meter?

Margin expansion?

Is there any chance of expansion of margin due to a conversion from electronic to smart meters?

Basically, they surely -- when whatever more value-added product is there, there is expansion of margin always there. And this smart metering is a value-added product. That's why we -- whatever the targets we are giving for the margins, that is because of smart meters. Earlier, you will see that company was making an EBITDA level of 12%, 13%. And now, we are talking about 16%, 17%. Once the smart meters numbers will increase, it may go further up also. So basically, that is a margin expansion because of smart meters only.

Okay, sir. And my second question is, in hardware segment, we are the market leader. But how we had placed ourselves in communication modules and software segment because this is going to be crucial for AMI/ESP business. Have we got any indigenous software solution for that? Or we are going to procure that from outsiders?

So you're talking about only the communications or the further software after the communication?

That is whatever you were talking about the facility management system, that business -- I'm talking about on that point only, that as far as the hardware...

Hello? I could not understand your question properly. If you can ask me again.

Sir, as far as the hardware segment is concerned, we are the manufacturer, smart meter manufacturer, and a leader over there. And as the new system is giving us the opportunity, on the service part, they will require lots of software service. So in that particular segment, have we got any in-house solutions or we are going to get that solution from the outside vendors?

So I'll answer this in 2 ways. First of all, when you do smart metering, there will be a lot of external partnerships that will happen, which are already happening with communication providers, with HCS providers, with MDM providers. So that is already part of the ecosystem. But apart from that, Genus is not only a hardware company. Whatever the smart meter or the meters we have been making -- we are currently also quite a lot of software mergers done in the meters. They already have more than 50, 60 engineers only in the embedded software. It's not from today, it's from like decade and a half because all the electronic meters also need a lot of software. And once we started this journey 5, 6 years back, when we started providing the complete solution, a lot of application software generally was also started by Genus. So as on date, if Genus employs more than 100 people who are experts in embedded application software -- so Genus is not a company which is only into hardware or manufacturing or meter. Genus is a solution provider. It's always been an end-to-end solution provider when it comes to metering. Plus everything cannot be done in-house. You will have a lot of partnerships also in the ecosystem. So when we talk what FMS we are going to do, we will be part of -- that ecosystem will be working closely with us as partners and a lot of solutions will be provided in-house. So this is how this whole smart metering solution is going to work. And this is what we are doing currently also. And this is what we are going to do in future also. So Genus is continuously has been expanding its portfolio in terms of providing products and solutions.

Okay, sir. And my last question, what company is doing to prune down the level of trade receivables?

So because, unfortunately, we've been dealing with the state electricity board, as you all know, they are generally in that difficult situation. So once this journey of smart meters what we are entering into, it will surely help majorly in our trade receivables also, where the smart meters is going to be completely secured money, either central government or the state -- primarily the state government is going to be -- if we become a system integrator. Then our money is secured because there is a clearcut provision given in the SBD, either they will have to open an escrow account or they will -- along with the sovereign guarantee of the state. Or if we are supplying to system integrator, most of the payments will be on the LC. So once this journey of smart metering comes into place, I would say, in 6 to 12 months, in a major way, trade receivables problem will also resolve significantly for companies like us. But yes, it will take time. It won't happen from the go.

[Operator Instructions] Next question is from the line of Lakshit Jain, an Individual Investor.

Am I audible?

Yes, Lakshit.

Yes, yes. You have mentioned that we have an order book going to the market of -- I mean the tender, going in the market is around INR 10,800 crores, right?

So -- yes, INR 10,800 crores is the tender, which will be participated and to be participated.

Yes, yes, yes. And seeing historically, we have a winning rate of about, say, 30%. So we'll be getting approximately INR 3,500 crores, right?

I hope we will keep doing what we have been doing in the past. It depends on the ratio, but I don't want to make any such statements.

So...

So with the current capacity -- you may continue, sir, sorry.

Whatever we -- our market numbers are, we will be achieving that, but we cannot comment on that.

Yes, correct. Yes, true, true. And so for the current capacity, having the ability to double, shouldn't we start from the current month itself, I mean, the planning of doubling our capacity? So because by the end of -- in the beginning of first quarter of next financial year, we'll be completely ready to meet the demand.

Two things we have to understand, see, when we say this order book of, let's say, INR 3,500 crores. This is not only from the hardware, it is also from the service and software also. And then all these projects has to be executed in 18 to 24 months. These are not the projects because these are all smart meter project where we are doing the complete end-to-end solution providing. So it is not all INR 3,500 crores comes from the hardware, can a lot come from the software also and a lot come from the FMS services also. So this is how it gets divided. So for doing this kind of number, capacity currently is sufficient.

Next question is from the line of [ Akash Mehta from [indiscernible] Investments. ]

Sir, I just wanted to know that our capacity utilization was quite low in Q2 FY '22. But how was the demand product offtake from DISCOMs?

So demand-wise situation is DISCOMs are absolutely in need of meters. One of the reasons, they have got retail slowing, deciding on that also because they are currently basing -- their current orders are not getting fulfilled. So now they have realized, yes, there is a lot of shortage of the semiconductors. People have to be given orders well in advance to plan it properly. A week back only, MOP had a meeting with all the top manufacturers to understand the problem. Most of the state electricity board chairmans are doing one-on-one meetings with us, how do we plan our ordering, our whole system so that this -- because we need meters. We are unable to give connections to our consumers. We want to change from normal meters to smart meters, and we are not getting products. So that is why these number of tenders has come up, more tenders will come up in future, very, very near future because electricity boards have understood if they want material, they have to order well in advance. Offtake is not a problem. Problem is availability of material. Each and every customer is lining in the queue currently to get meters for themselves, which they are unable to get. This is the situation currently. It is as good as the automobile industry where the people want automobile, customer is not a problem, problem is supply chain.

Correct. Correct. So in that case, what is the percentage of smart meters in our order book? Are they -- what are they likely to constitute in our order inflow, going forward?

So currently also, more than 65% is a smart meter in terms of value. And in future also, it will take up to 70%, 75% is going to be smart meter?

Okay. And just lastly, sir, how much is the order inflow that we can expect in the last quarter of the year, considering the revamped distribution sector scheme, which is expected to be rolled out by December end?

Quarter 4 means Jan-Feb-March?

Yes. Yes.

So very conservatively, it should be INR 500 crores to INR 700 crores. It can be even much larger.

Next question is from the line of Anurag Patil from Roha Asset Managers.

Sir, in the presentation, you have mentioned you will be targeting 30% business from this service provider business model. So I just wanted to understand, what will be the, means, attractiveness of this model apart from the recurring revenue? So in this model, we have to incur a CapEx initially and ultimate return on capital might depend on your ability to raise the funds. So will the ROCEs will be attractive enough compared to the -- just being a provider to vendors?

Surely, there will be a better ROCs in all these things because whatever the -- our point investment is coming. So that is -- that the revenue is coming for 8 years, and it's not a total cost of hardware or whatever the initial investments are there. So basically, if we count on that 8 years and discounting on all that, there will be a far, far better ROCE on that.

Okay. And sir, initially, all the CapEx you have to do, right? Am I right in understanding?

Yes, sir. Your understanding is right.

Okay. And we will be restricting this part to 30% of overall business? Or it's just a ballpark number as of now?

Yes, it is a ballpark number, but we have decided the way we want to target our business because the opportunity is very large. So we have made our own process as this is how we are going to attack every opportunity.

And depending on time to come, we will surely balance that depending on the balance sheet position and funds and CapEx a little bit.

Next question is from the line of [ Nisha Desai from Raga Securities ].

Yes. Sir, I have a couple of questions. So firstly, I wanted to ask, sir, can you throw some light, I mean, throw some more insight on the dual business model, which we plan to work with, basically that of the system integrator as well as the product supplier?

It is very simple. There are multiple tenders in the market. Few tenders -- because every tender gives us the opportunity being a meter manufacturer to play the dual role. So we can be a system integrator also, and we can be a OEM supplier to our customer also. So as we have decided, we are going to play both the roles.

Okay. And how does the management plan to balance these between these both the roles?

So as I said earlier, the balancing is -- this is what we have decided as on date that most of the opportunities because all these projects are not going to be single large projects. So there will be different sizes of projects which are going to come in the market. So according to our appetite, we'll choose the area, choose the size where we want to become the system integrator. As an OEM vendor, we are open to supply all 250 million meters in the country. So...

Okay, sir. Okay. Sir, my next question is, I mean, doesn't a business model of -- I mean system integrator involve more risk in terms of CapEx requirements and working capital pressure?

So yes, everything when you do little differently, it has more risk but it is more rewarding also because you have a fixed revenue for 8 to 10 years. And for us, the risk is much less than the normal system integrator because what is the difference between the normal system integrator and us is, he may be sitting on the much more cash than us. That is the only difference, otherwise, this whole project has to be driven by people like us. This is not a typical, I would say, a project where the technology is not required. These are hardcore technology products. There's a hardcore technology solution which has to be provided. So basically, the role has to be played by the meter manufacturer and the service provider like us. So our risk in comparison to the system integrator is much less because we don't know the domain. We know the terrain. And we -- and they have been doing this kind of work in the last 15, 20 years. It's not that Genus is for the first time thinking of doing an end-to-end solution provider. On CapEx basis, so we have been doing it from last 15 years. We have a very strong service team. We have projects department which employs more than 150 people as on date. So it's not that for Genus it is something new. The only new thing is, in earlier projects, there's some CapEx, in some parties in the OpEx. In future, there will be projects which will be -- where there will be a lot of -- on the OpEx. That is only going to be the difference. So I think we are best placed to do this kind of work.

Okay. Sir, and one other question. How does the company basically plan to secure itself on the risk which arise out of the state government policy intervention if it plans to basically play a long-term role of being a system integrator?

Can you repeat your question, I missed it somewhere?

I'm saying, how does the company basically plan to secure itself from the risks arising out of the state government policy intervention if it plans to play a long-term role of being a system integrator?

You have taken the work from the government. Whatever the policy can give, metering is a compulsion. It is not a -- it is not a choice that you need metering or you don't need a metering. So it is a compulsion. So state government, what are the policy they change, they cannot change metering. They will never tell you, "Okay, you stop previous smart metering ones those who have taken. But now, we don't want meters. We don't want to build electricity to our consumer." So in that sense, I'm unable to understand what exactly is this. So I'm unable to find out any risk in that.

[Operator Instructions] Next question is from the line of Subrata Sarkar from Mount Intra Finance.

Yes. My question is, like, sir, we have decided to be partly, like, the system integrator. So what is the philosophy behind that? Like, we believe that, that is more profitable, that part of the business or market size is big that's why we want to be in the system integration business? Or we believe that if somebody else becomes system integrator, like, it will be difficult for us to get, like, contract from them. Number one. And sir, while deciding about the system integrator, have you done any calculation, like, how much profitability and any internal mathematical calculation that what kind of capital is required, and based on that, what kind of revenue we would -- if you help us to walk through on some mathematical calculation or any internal ballpark understanding, that will help -- really help us as an investor.

So you open up the market, the opportunity has become better. So when you want to play the system integrator also because we are doing it currently also. Please understand the simple difference. This terminology, system integrator has just come up in the last 2 years. Even before that, Genus, as a company, has been doing supplying meters, installing meters and maybe reading in some cases. Those numbers were not very large, but not very small also. We had been doing a project of almost 6 lakh meters, single-phase meter in Maharashtra from last 5 years. We are doing a project of 80,000 meters in Orissa from last 4 years. We have been doing a project of 40,000 DT meters in BESCOM, Bangalore form last 8 years. It's not that this is something absolutely out of the block, new for Genus. This word, system integrator, has been coined in the last 3, 4 years when smart meters has come into the foray, and the opportunity is very large. So since we have been already doing that kind of work on end-to-end solution provider, we have extended our feets, "Okay, yes, why not we do it on the OpEx basis also. It makes lot of sense, and definitely, margins will be better, and the opportunity increases." So we are not only a player where we're running behind system integrators to sell your product, we are playing the role of a system integrator also. First thing. Risk-wise, as I said earlier, earlier also whatever the projects we are doing, as an end-to-end solution provider, everything involves risk. Because we know the domain, we know the terrain very well. So for us, this should be minimized. The margins are better, minimized risk. And third question you asked about the calculation, of course, when we are quoting tenders and when we are making any big inroads into something and we are making a headway, we have done all our calculation. Experts are working very closely with us in making sure we don't end up in any mistake in making calculations. And recently, we have quoted a couple of tenders and while the prices have opened up has given us even more confidence as we are on the right path.

Yes. Sir, my last question is, like, as of now, Genus is definitely the market leader in this space. There is -- like, there is -- previously, LNG was there. So now Alstom is there, and like, other global player also is there. So my point is, sir, these -- despite competing with this company, we are currently #1 in terms of market share. So now only thing which I'm trying to understand, sir, when this market size become -- market sales will increase, won't these global players will be more interested? What I mean to say, we are #1 because one of the reasons may be because current market size is not that attractive to the MNC and other players. So once this market size, like, increases, won't this player become much more aggressive than their previous experience of implementing a smart meter in the -- globally in other countries? Or we will be -- what will be their advantage vis-a-vis what will be our advantage?

First of all, smart metering is not something which has not been implemented in India till now. Only the numbers are less. So we are very well geared up as industry. Second thing, a lot of customization is required when it comes to metering in India. So even the government realized it that, yes, we cannot make a "one size fits all kind of a specification." Utilities won't accept it. So even today, each and every tender, which is coming -- even the SBD has given a lot of leeway to the local utilities to do their customization. So for them to compete with us will be much more difficult than in comparison to us competing with them. So very frankly, I don't see any threat from these international companies coming to India and dislodging us. As an industry, we are very well placed to compete with this multinational or international companies coming in India for smart metering companies.

Next question is from the line of [ Keerthi Tibrewal from Yashwi Securities. ]

Yes. So I wanted to ask, is it possible to put a number of the units of smart meters sold in the quarter?

Some of your voice broke in between, and I could not hear the question.

Sir, my question was that is it possible to put a number for the smart meters sold in this quarter.

In the?

Quarter.

In this quarter. We don't have exact number right now.

Exact you can find which is sold in this quarter from the country. In the country or by Genus?

By Genus? Sir, by the company?

Jitendra, they are asking for the number, exact number, of the meters. So that we can provide them through SGA. I don't think right now...

Exact number, I don't have on my hand. Exact number of smart meters we have made in this quarter, you mean to say? Later we can provide you the numbers, not an issue.

Thank you very much. As there are no further questions, I now hand the conference over to the management for closing comments. Over to you.

Thank you. Thanks a lot to all ladies and gentlemen, for putting your confidence in the company. I wish you all a very, very Happy Diwali and a Prosperous New Year. And we assure you that company will be doing and achieving great highs in the coming quarters, we will be coming overall the shortcomings what we are facing since last 2, 3 quarters. Thank you very much. Thanks a lot.

Thank you, everyone. Wish you a very Happy Diwali. Thank you.

Thank you very much. Ladies and gentlemen, on behalf of Genus Power Infrastructure, that concludes today's conference call. Thank you all for joining us, and you may now disconnect your lines.