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

So the non-AMI orders, definitely, the margins are a little less. Historically, that has been always the case. When it comes to smart meters being supplied to our own platform to the AMISPs, the margins are almost similar.

Okay. And sir, till date, you mentioned that we have 45 lakh meters operational. They all have started generating revenue for the platform as on date?

So as I said, out of 45 lakh meters, if I install 25 -- 1 lakh meters are already operation go live, where we have started receiving the O&M from the electricity board. So that has started generating the revenue for the platform.

Only 1 lakh have started.

21 lakh.

21 lakh. Okay. Understood. And the share of profit in the associates of INR 8.8 crore is largely related to the platform. There's nothing else in.

Yes, yes, absolutely.

Yes, absolutely.

And sir, just last question. How much equity infusion have we done in the platform till date?

How much?

Equity infusion. We were -- we were supposed to do somewhere around INR 1,700 crores.

That number we have to come back. I exactly don't remember the number, but it is - it will be around -- it will be lesser than INR 100 crores.

Till date, less than INR 100 crores we have announced.

Yes. Exact number we can provide.

But we'll provide you the exact number. Not an issue.

The next question is from the line of Ashwani Sharma from Emkay Global Financial Services Limited.

Congratulations for a stellar set of performance. Just one question on the guidance. We've guided for INR 4,000 crore of top line for this year. So looking at the Q1 and then Q1, as you mentioned, is slightly where you feel -- where you faced certain challenges. Is there a probability of revising our guidance upwards for the current year and the next year as well?

We will be surely doing that, Ashwani. We are just waiting for one more quarter to happen because second quarter normally because of rains and some things, sometimes is not very good. So, we are just -- we are very hopeful that we will be doing the better in the coming quarters. And surely after once the 6 months are finished, we will be revising our guidance for the revenue also and for the profits also.

The next question is from the line of Chandresh Malpani from Niveshaay.

Sir, in your opening remarks, you mentioned that 80% of the total order book at the -- at our platform level flows back to Genus. So, can you just break it up into, let's say, the installation phase and the O&M phase? When you are installing the meters, how much of this revenue will get booked and rest, which is the O&M period of 8 to 10 years? How much would that be?

So just to give you -- to make it simple for everyone. So around 55% to 57% of the revenue will come in the first 3 years. That is where the installation and meter supply installation and the system integration will happen. And remaining around 20% to 22% will happen in the O&M in 6 to 8 years. So if you break up the total order book as on date is take a round figure of INR 29,000 crores, out of INR 29,000 crores, INR 2,000 crores is the direct business for Genus. So INR 27,000 crores comes from the platform. So out of that INR 27,000 crores, 80% to 85% comes as a revenue to Genus, out of that 55% to 58% will be in first 3 years. So you can take an approximate figure of around INR 12,500 crores is like supply and around INR 4,000 crores in installation. So almost INR 16,000 crores revenue will come in the next 3 years in supply and installation and around INR 7,000 crores remaining as an O&M in remaining 6 to 7 years. So this is how you can break up the whole order book.

Okay. Got it, sir. And secondly, like what would be our offering? Like if I have to understand it right, we supply meters, communication as well as Head-End System and also do the installation for our platform and O&M, so we are already doing it. So is it the right way to understand?

So the right way to understand is Genus is doing a complete end-to-end solution providing. Genus meters installed by Genus. Head-End System is also belongs to Genus, installed by Genus. Then the data goes to MDMS, again, belongs to Genus installed by Genus and O&M is also done by Genus. So everything is complete -- the complete gamut of the solution is also designed and developed by Genus and maintained by Genus.

Okay. Got it, sir. And sir, lastly, this is about a news article I would need a clarification from you here. There is an article that in our Goa project, we -- Genus was backlisted for some technical reasons and even we participated in Rajasthan tender. So any clarification on that side, like what is.

There's absolute clarification on this. Whatever in Goa -- in the website they mentioned last year, these two companies has been blacklisted by us, never any notice was given to Genus. Almost after 1.5 months of this uploading done by the Goa Board came to our notice. Immediately, we went to the High Court. It was absolutely illogical and unjustified. And in the first hearing, High Court caused that uploading from the Goa government and really gave them a strong message, this is absolutely unjustified and wrong. So Genus was never blacklisted logically in the past also. And whatever the tender decided by Rajasthan is absolutely as per the terms and conditions of the RDSS and terms and conditions of the electricity board. So whatever has come in the news, we had -- today only it came to our knowledge also, which is very surprising. And we have already given our written clarification to the media. And I'm pretty hopeful that media will also will clarify this very, very soon. It is quite unfortunate that without taking our version, without even asking us the report has come in the media. But yes, we have given them the clarification.

The next question is from the line of Yashowardhan Agarwal from IIFL Capital Services Limited.

I have couple of questions. The first question is that what is the risk to our supply chain in terms of whatever is happening globally? Do we face any uncertainty in terms of sourcing of products from China?

So just to give you a heads up on that, smart meters comes in category 1. So smart meters is completely designed and developed in India, manufactured in India with more than 60%, 65% of the value addition happens in India. So, we are already in category 1 as an industry, as a product. Genus is even higher than that, but I want to speak about the industry, so we are category 1. And there are lot of components which comes from Korea, China, Taiwan, U.S. and we face absolutely no problem in the supply chain. It is absolutely smooth in the current state of the affairs.

Got it, sir. And in terms of manufacturing, communication system and relay these two are very important parts when making a smart meter. So are we sourcing it domestically or we are dependent upon other countries and what is the proportion sorry, sir, just to continue. So compared to earlier versus now, have we increased our sourcing from India? Or has it been constant dependent upon [indiscernible?

So we are continuously building the Indian supplier base. And when it comes to relay, we are importing it also and we are getting it done in India also. When it comes to communication, radio frequency communication RF, Genus has designed and developed its own RF. So, in all the projects, wherever we are using the RF as a communication, it is Genus designed and developed and Genus make only. And when it comes to cellular communication, cellular also, the Mic Card is designed and assembled by us and the components are -- as we are sourcing components for different products, electricity mix also from different parts of the world and the semiconductor giants like Texas instruments, Renesas, same thing we are doing for the communication semiconductor also.

Got it. So pretty much on the communication part, just continuing on relay sales. You told that we are sourcing it from India as well as importing it. So, has the Indian component increased over time? And if you could share the percentage, what part of it we are sourcing from India?

So India is continuously growing in it. Still the capacity has constraint in India. So, that is why we have to import it also. Exactly, I am not in a position to tell you what is the percentage we source from India or we import it from outside. But yes, we are getting it developed in India also.

Got it. And sir, in the call -- in the initial remarks, you told that for FY '27 guidance that you have given 1.1 to 1.2 crores meters installed. So that is under AMISP or that includes servicing or providing smart meters to third parties as well?

That we are -- [indiscernible] number of meters to be installed by Genus.

Yes. Okay. So that includes the AMISP part, right, not providing it to third parties.

No.

The next question is from the line of Darshil Pandya from Finterest Capital.

Sir, my question is more related to installation thing. So sir, in cities like Mumbai and other parts, we are seeing some public pushback with regards to concerns around installation practices, billing and all these things. In fact, even in my own housing complexes, the installations were halted. So just wanted to understand view from your side and how is it beneficial for the consumers? Are they adequately safeguarded? Because this kind of risks are always there for our business and I want to understand how things are for us.

So just to -- and I've been talking about this since long, multiple times that smart meter is not only for utilities, it is for everyone. A smart meter is no more a luxury, it's a necessity. The way electricity consumption is growing all across, a smart meter is a must. And the benefits to the consumer, if you see, there will be 0 intervention of the human being. The government has already offered 3% -- in some places, even 5% rebate on the prepaid systems. There will be -- you will have a complete control on the consumption of the electricity --in your -- on your -- in your palm, through your app. You will get to know what is happening in your electricity consumption at home. Plus, you get a free solar meter along with the smart meter. You don't need to -- practically, you are getting a device ranging anywhere from INR 3,000 to INR 4,000 free of cost by the government and then it will be maintained for next 10 years by the private company. So, you are getting something absolutely free of cost, which has a solar meter built into it. So, you don't -- even if you do a solar installation, you don't have to buy anything. Otherwise, you will have to buy a solar meter and a net meter. So practically, you are getting a gift from the government of India, free of cost. Plus whenever an already central government has passed time of day use, which is everywhere in the world is still not implemented in India. It has to happen over the period of time. And the only way to do time of day use will be -- you need smart meters for that. That will be a huge advantage to every consumer where he will get time of day use, he will get much cheaper electricity and he is paying a standard price all across the 24 hours, where the electricity is purchased much cheaper at some times and much expensive at some times. So, there are multi, multi benefits to the consumers, and there will be anything that new will come, government will -- we are a democratic company -- country. There will be some issues here and there, but smart metering journey is flourishing very, very fast across the country. You'll see every month, if I talk of last month, month of July, which was raining very badly all across the country, still to the best of my knowledge, more than 3.5 million meters have been installed across the country, 3 million, 3.5 million meters. So, there's no stopping smart meters.

Correct. No, sir, I just asked with regards to there were some outages. So I was just concerned about the risk that is associated with it.

Which is very...People get misguided. Very frankly, if I'm a consumer, I'm getting a gift from the government of INR 3,000 to INR 4,000 device without paying a single penny from my pocket, the latest technology with so many benefits. And the immediate benefit, which I can see is 3% to 5% rebate on the prepayment plus a free solar and net meter, which otherwise I have to buy from the market of INR 1,500 to INR 2,000, somewhere even INR 2,500 when it is in shortage. So, I see only advantage to the consumer.

The next question is from the line of Darsh from Axis Securities.

Congratulations on a good set of numbers. So I just had one question, sir. Basically just wanted to know your views and updates on the export segment and the smart -- water meters and gas meter segment.

So we have been -- so water meter is currently -- if you will see the water meter and the gas meter, so water meter currently have a higher potential than the gas meter for the export market. This is what our understanding currently is from the last 3 years, whatever work we have done in the international market. And we are seeing a good momentum of water meters in the Western and the ANZ market. But the meaningful revenue will, however, take at least 2 to 3 years to materialize. That is where you will start seeing a very meaningful revenue, which is coming to the company. Same way water meters has a fairly good scope in India, which is also building up. If you see that Jal Jeevan Jal Yojana, almost I think 19 crore installations to be done, and 12 crores are already done. So slowly and gradually, everything has to be metered by the government. So even in domestic, we see water will have a significant future. When it comes to gas meter segment, we are more focused on expanding reach of our data loggers. So which can be utilized by gas utilities to extract data from the existing installed gas meters. So yes, it is slowly and gradually, it will pick pace. Gas meters, currently, we are not seeing as a very large business. It will be more like a non-AMI single-phase meter business in India. So it will have a reasonable size, but it's -- currently, we don't see it exploding like the electricity meters.

Understood sir, any color on the export for the smart meters? Any color on export of smart meters.

Smart meters, we are already -- for electricity smart meters, we are already working in 2, 3 major markets, especially ANZ, Middle East, Southeast Asia and some of the African markets. We are seeing a good traction there. This financial year, I would say the export business revenue will go a little bit up from the last financial year. There won't be a major difference in this financial year. But from next financial year, you will see a much meaningful revenue growth in the export business from the markets we are already working.

[Operator Instructions] The next question is from the line of Yash from Shaan Patel Asset Management.

Congratulations, sir, on the great set of number. Sir, I wanted to ask you with respect to [indiscernible], like is there any finding that could result in future obligation with respect to Genus Power specifically?

So after the search, they called us for -- after that, we haven't received anything from the department yet. So it's almost 7 months has passed, and we haven't received anything from the department. So if anything will be received from the department, then only we can say that -- we don't see there is any impact from the company because of that, the revenue or the sales or the ordering or anything. And last 7 months, we haven't received anything from the department.

Okay. Means you haven't got any clarification or notification from [indiscernible]? You haven't got any clarification or any additional information from [indiscernible]?

After the search and inquiry, we -- from last 7, 8 months, we haven't received anything from the department regarding this.

The next question is from the line of Rohit from Intelligent Capital.

My question is regarding working capital again. So, I understand, again, because of we installing the smart meters aggressively now going forward, I think last year, you did mention that this year guidance and the next year guidance would be more like a 20% up than FY '26 as well. So, based on the aggressive installation of those meters, is it fair to assume that the working capital issue would remain a bit constrained on -- at least for the next 2 years or 3 years until the O&M revenue really kicks in majorly?

No, no, I don't think so. So basically, here, you have to understand that if you see the absolute numbers, the absolute numbers will surely go up because the revenue is going up. Last year, company has made a revenue of -- before last year, it was INR 1,200 crores. Last year, it was INR 2,400 crores. This year, we have given a guidance of INR 4,000 crores. And even we feel that we have to revise the guidance also. Next year also, there will be a good jump in revenues also. So once the revenue is going, absolutely, you will see that in absolute numbers, there is increasing of working capital. But when you see the percentage or day-wise, there will be surely -- it will be -- in financial year '26, it will be better than '25. In financial year '27, it will be better than '26. In '28, it will be better than '27. Every time the number goes up, you will see in percentagewise, in absolute days-wise, there is an improvement in working capital.

Got it. Got it. So, is it fair to assume that maybe by FY '27 ending the cash flows will be positive cash flow from operations at least?

Sorry, which FY you're saying?

Sorry?

You're saying FY '26?

Yes, FY '27, I'm saying FY '27 ending can be

We feel that by FY '26 itself, we will be cash flow positive.

Cash flow positive. Yes, definitely.

Sir, last one question from me. I think that was something that was written in the investment presentation. A bit clarification on the demerger aspects. Basically, what percentage of revenue and the business of the entity that is getting demerged that -- maybe a bit clarification on that. What is the percentage of

There is absolutely almost 0 number of business or the profits going out of this demerger. These are mainly the investments that were listed --- non listed companies of the group and other than group that is going out.

The next question is from the line of Harshil from Titanium.

Sir, I had a question regarding the debtor days only. So, like what would be your future guidance regarding the debtor days? Is there any different practices from the industry you are following to increase the operational efficiency?

Your voice is not very clear, but what I understand you are talking about the debtor days.

Correct.

Can you please clarify your question? Your voice was not clear.

So, like what would be your future guidance regarding the debtor days? Like is there any different practices you will be implementing from the industry, which increases your operational efficiency?

So, debtor days as for us, we are supplying most of the meters or most of -- all AMISP is being done through the platform. And we have certain agreements with the platform about the debtors days. Initially, as I told earlier also, it's an initial phase where we are starting the projects. That's why it is getting delayed in terms of inventories also and in terms of debtors day also. The exact proper numbers of debtors day, we will be seeing another 1 quarter also and after second quarter, as I told in the earlier question also, we will be in a better position to give you a proper number where we could see our debtor days.

The next question is from the line of Alok Shah from SRE PMS.

I just want to understand that in this current year, are we expecting any fresh raise of funds through debt? Or can you guide me the debt level at the end of the year?

I have answered the same thing for an earlier question also that debt levels, we are just working on our working capital that how it looks like. We have our internal targets of debt and working capital. We will be more clear after this quarter. After quarter 2 H2 in the conference, we will give you a proper number where we see that our debt will [ lie ] in this financial year and how our working capital cycle will be.

The next question is from the line of Rahul Kothari from VRK Ventures. As there is no response, the next question is from the line of Pranjal Mukhija from GrowthSphere LLP.

Sir, just one question. Could you please share some data around the total capacity of smart meters in India currently? And do we foresee this capacity to be sufficient to cater to the demand of 31 to 32 crore meters? I'm only asking this because, I mean, there are new players who are trying to break into this market and I mean, they're citing this lack of demand, like the difference between demand and supply to be the reason why they're entering this market. Just wanted to understand, given that the government has also sort of extended the deadline for this target, the current capacity -- what is the current capacity in India and will be sufficient to cater to the like 31- 32 crore meter demand?

So current capacity in terms of manufacturing of smart meters?

Right, right.

Yes, it is more than sufficient. So current capacity is not a problem. Rather I will suggest all the new players who want to enter into this market, please do your survey before entering into the manufacturing.

Any idea on the number part of it, like what will be the number -- approx number?

So, in general, what we understand from the manufacturing capability of the large players that country has a comfortable capacity of, I would say, 7 to 8 crore meters per annum.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Jitendra Agarwal for closing comments. Over to you, sir.

Thank you all for joining today's call and your continued engagement. Q1 FY '26 has reinforced the strength of our integrated business model, our execution agility and the structural tailwinds driving India's smart metering transformation. With over INR 29,000 crore order book, clear revenue visibility and projects steadily transitioning to the operational phase, we are uniquely positioned to capitalize on this transformative national infrastructure upgrade. We remain focused on disciplined execution, prudent capital allocation and delivering long-term value to all stakeholders. I thank you once again. Thank you, everybody.

Thank you, sir. On behalf of Kaviraj Securities Private Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.