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

Ladies and gentlemen, good day, and welcome to Q2 FY '26 Earnings Conference Call for Genus Power Infrastructure Limited hosted by Kaviraj Securities. [Operator Instructions] I now hand the conference over to Mr. Abhijeet Purohit from Kaviraj Securities. Thank you, and over to you, sir.

Good evening, ladies and gentlemen. Kaviraj Securities extends its festive greetings, and welcome you all to the Q2 and H1 FY '26 Earnings Conference Call of Genus Power Infrastructure Limited. Today, on the call, we have with us Mr. Kailash Agarwal, Vice Chairman; and Mr. Jitendra Agarwal, Joint Managing Director. I now hand over the call to Kailash sir for his opening remarks. Post that, we can open the floor for Q&A session. Thank you, and over to you, sir.

Thank you, Abhijeet. Good evening, ladies and gentlemen. A very warm welcome to Q2 FY '26 earnings call of Genus Power. The results, investor presentation and press release are uploaded on the stock exchanges and company website. I hope everybody has a chance to look at it. I am pleased to share that Q2 FY '26 was another strong quarter for Genus Power. We continue to build on the momentum of the past few quarters, driven by steady execution, disciplined operations and continued progress across our smart metering programs. In Q2 FY '26, our stand-alone revenue stood at INR 1,149 crores, a sharp 136% increase over INR 487 crores in Q2 FY '25. This sharp increase was supported by healthy progress across our large AMISP projects, particularly as more of them are now transitioning into the operational phases. EBITDA more than tripled year-on-year to INR 244 crores with margins improving 456 basis points to 21.3%, aided by operating leverage, cost control and overall execution efficiency. Profit after tax from continuing operations grew by 162% to INR 148 crores, translating into a PAT margin of 12.9%, reflected improved operating performance and better absorption of fixed costs despite higher finance expenses. For the first half of FY '26, revenue stood at INR 2,091 crores, up INR 132 crores year-on-year, while EBITDA grew over a threefold to INR 444 crores with margins improving to 21.2%. PAT rose to INR 277 crores, an increase of 185% compared to the same period last year. This consistent performance across quarters reflects our continued focus on execution excellence and financial discipline even as we scale up rapidly. The total meter requirement envisaged under RDSS scheme is approximately 25 crore meters, out of which 15 crore smart meters have already been awarded by different state utilities. And remaining 10 crores smart meters are broadly pending from state like Gujarat, Kerala, Madhya Pradesh, Punjab, Tamil Nadu, West Bengal, Haryana, Delhi, putting a total number of 10 crores. So out of 25 crore meters, 15 crores have already been awarded and 10 crores has to be awarded. And out of these 10 crore meters -- approximate 10 crore meters, 3 tenders are live: one from Tamil Nadu, that is of 3.05 crore meters; one from Delhi BSES, around 50 lakh meters; and one from Punjab, 26 lakh meters. Remaining approximately 6 crore, 6.5 crore meters are expected -- the tenders are expected to come in next 12 to 18 months. So next 12 to 18 months, we are expecting another 10 crore meters which are live or will be -- tenders will be coming to be finalized. And company is very hopeful in maintaining its run rate. Company has a run rate in earlier tenders out of that 15 crores also. So the same run rate, we hope that we will maintain. Even after these 10 crore meters, a few large states like Karnataka, Telangana have yet not taken the drive under RDSS. So these states are out of these 25 crore meters. So if we add these states also, which we are very hopeful that these states also will be coming under the RDSS -- or they will take the drive of RDSS in next 1, 2 years. So if we add that number also, the number of meters required will come to 30 crores, 31 crores. So put together, if we say, we can say that total -- out of total requirement of 30 crore meters -- 31 crore meters, 15 crore meters has only finalized yet. So almost 50% meters, that is 15 crore meters are yet to be finalized. And those tenders or live tenders will be finalized in, say, next 1 to 2 years. Out of 15 crore meters, which has already been awarded, 4.5 crore smart meters have been installed in the country till today out of 15 crores, which has been awarded. So this is the picture. I just want to give you on the market size or the meters already has been awarded and now the remaining meters that has to be awarded in next 1 or 2 years. Now I come to the cash flows and working capital of the company. Being -- we are in an AMISP business where initial 3 years are the phase of installation and completion of projects. Thus, a lot of inventory is required at different sites of different projects. So every -- company is working on almost 15 projects, 20 projects. Out of those 20 projects, every project has a different, different sites, many, many sites. So every site, we have to keep an inventory, we have to keep finished meters and so a large inventory is required at different sites. Once these projects are streamlined and start operating in full swing, the inventory will also start reducing. The debtors days have already started coming down and have reduced from 187 days as on 31st March 2025 to 126 days on 30th September 2025. So there is a reduction of almost 61 days in debtors days. But the inventories remain same because, again, the new projects are being started, new areas are being started. But we are hopeful that in coming time, inventory days will also come to a reduction. We are very hopeful that every 6 months, you will see a reduction of 40 to 50 days in working capital cycle, say, in '26 -- by March '26, another reduction of 40, 50 days; then next 6 months to 12 months, another reduction of 40 to 50 days. So by end of '27, we are very hopeful that our working capital cycle from here also will go up to 160, 170 days, which we have earlier told to the investors. As on 30th September 2025, company had a total gross debt of INR 1,744 crores, which is about INR 400 crores more than the gross debt that was on 31st March 2025. The increase in gross debt is primarily from short-term loans, and this will start reducing from middle of FY '28 onwards. The expected peak borrowing by the company will go to maximum of INR 2,000 crores to INR 2,100 crores. So basically, we are saying that whenever we will reach to a revenue -- expected revenue in '27, '28, but the debt will not go above INR 2,000 crores or INR 2,100 crores. As on 30th September '25, company had a cash and cash equivalent of approximately INR 600 crores. So when we say INR 600 crores cash and cash equivalents in the form of fixed deposits, the gross debt is INR 1,744 crores and the net debt will come -- net debt actually is INR 1,100 crores, INR 1,150 crores. As on 30th September '25, the company had invested approximately INR 318 crores in the joint venture platform and SPV of joint venture platform with GIC. Company expects investment of another INR 700 crores to INR 800 crores in the joint venture platform in next 3 years. That is over financial year '26, '27 and '28. So put together, the company's investment in the platform where we are a 26% partner will go to a level of INR 1,000 crores, INR 1,100 crores, not more than that. The company estimates revenue of INR 4,500 crores for financial year '26 and INR 5,500 crores to INR 6,000 crores for financial year '27 with an EBITDA margin of 20%. So the company is revising its guidance for FY '26. Earlier, we have given a guidance of INR 4,000 crores and 18% EBITDA. Now we are giving a guidance of INR 4,500 crores for FY '26 with an EBITDA of 20%. And for FY '27, around INR 5,500 crores to INR 6,000 crores with EBITDA of 20%. In H1 FY '26, company manufactured around 90 lakh meters. So last 6 months, company has manufactured around 90 lakh meters, out of which 50% meters have been supplied to government utilities and private utilities, which are buying non-smart meters also and to the other AMISPs also. Balance about 50% of the meters have been supplied to the joint venture platform with GIC. As on 30th September 2025, the company had a total order book of INR 28,758 crores net of taxes for about 3.6 crore meters for supply to utilities, other AMISPs and to the joint venture platform. In H1 FY '26, the company had also received orders from different utilities of INR 127 crores for approximately 9 lakh meters, which are non-smart meters. So these are the regular meters which we were doing earlier, we were supplying earlier. These are the regular meters which utility buys on urgent basis and are for meter supply only. And then these are non-smart meters. These are the regular meters. Out of 24 AMISP projects, which we are implementing, 13 projects totaling to 10 crore meters have received operational go-live certificates from utilities. Remaining 11 projects are expected to achieve operational go-live status in the December 2025, January 2026 time frame. Further, company is also setting up a new injection molding plant in Kotputli, Rajasthan. In first phase, we are willing to install 40 machines, which are expected to be operational by end of financial year '26. This unit will supplement our capacity to supply plastic molding components or meters manufactured by us. So basically, this, I have tried to give you a data on the market size, the debt of the company, the investment of the company in the platform and the order book. Now I open the floor for the question and answers.

[Operator Instructions] The first question is from the line of Divyansh Thakur from Finterest Capital.

Sir, congratulations on the great results. I'd like to ask that what are the -- how many meters have been installed in quarter 2 of this fiscal year?

Hello, can you hear me?

Hello sir?

Yes sir, please go ahead.

How many meters have been installed in quarter 2?

Yes, sir.

So quarter 2, we have installed around 19 lakh meters?

And sir, how are we planning to reach the target of 80 to 90 lakh meters that we had given the guidance of?

So in the first half yearly, we have installed around 36 lakh meters, and we are confident of the guidance what we gave earlier around 80-plus lakh meters we will install because November to March is the best period for the installation of meters historically also. So we are more than confident of achieving the target what we have set earlier for ourselves.

Next question is from Bhavin Chheda from Enam Holdings.

Congratulations, sir, overall, a very good performance on the operational and also revising the guidance. Sir, how many meters are on OGL have operational gone live?

So as on date, out of 3.62 crore meters, we have installed total 80 lakh meters. Out of 80 lakh meters, 42 lakh meters SAT has been done. And out of this 42 lakh meters, 40 lakh meters have achieved the operation go live.

Sorry, sir, till date, you said till date, we have installed 80 lakh meters?

Till date, we have installed 80 lakh meters, out of which 42 lakh meters have been -- SAT has been done. The reason I'm giving the detailed answer is so that other participants don't need to ask the same thing again. So 80 lakhs has been installed. Out of that 80 lakhs, 42 lakhs site acceptance test, SAT, has been done. And out of that 42 lakhs, 40 lakhs have achieved the operation go-live.

So we have started receiving monthly revenue on 40 lakh meters, right?

So this 40 lakh meters, we have started receiving the monthly revenue because monthly revenue starts after the 45 days of achieving of OGM.

Okay. Okay. And you mentioned the manufacturing of 90 lakhs in H1. How much was in the quarter? This quarter?

For the quarter, exact number, I don't have it offhand with me, but around 50 lakh meters we can take.

Around 50 lakh meters. So basically, if I see on a per day basis, you have achieved almost 50,000, right?

Hello?

Yes. Hello?

Yes.

So on -- I was just looking on a per day basis, basically on a per day basis...

It is almost 50,000 meters per day, 50 lakh meters per month.

It is almost 50,000 meters per...

Yes. So how is the ramp-up on a per day basis now planned going ahead?

So currently, we are very comfortable in the current capacity and whatever the requirement we have ahead of us, current capacities are capable of handling it. And if we need to ramp up, we can add some more shifts. So it's very well taken care in the current market scenario.

Right, right. And on the, sir, volume front, I think the previous guidance was 75 lakhs for FY '26. Now you're saying 80 lakhs. Obviously, on a revenue number also -- absolute revenue number also, you have upped the guidance. So next year, we are looking at over 1 crore based on the revenue number, what you have guided, installations.

Yes.

[Operator Instructions] Next question is from Eshwar from ithought PMS.

So question I have was what degree of indigenization do we have in our smart meters? Why I'm asking this question is for context, our competitor, HPL Electric, they have partnered with a Chinese company to develop relay manufacturing in India. And another player called Permanent Magnets, they have also invested in latching relay capacity to -- through a licensing agreement. And they are also beginning production in the second half of this year. So what is our capability in that side? And how much percentage of our smart meter is indigenized?

So just to give you a understanding on this, smart meters is already in the category 1 of manufacturing in India. So more than 60% of the value addition has to happen in India. Smart meters are already in this category. And Genus very comfortably is part of this category being the largest meter manufacturer in the country. A lot of people are doing different kind of partnerships. I don't want to comment upon them. But yes, we are comfortably category 1 and whatever the requirement of Make in India or Made in India comes in future, Genus is very well placed in taking care of that.

Understood, sir. And the latching relay capacity, do we also have it in-house? And do we plan to supply it outside to other players as well? Because smaller meter manufacturers, they primarily procure parts from China. So do we have plans to...

I think relay, we are not -- at Genus, we are not manufacturing latching relays. We are buying it from our suppliers. So -- and we don't intend to manufacture latching relays in the future also.

Are we buying it from China?

It is being imported from China also. It is being made in India also. There are multiple manufacturers based in India who are also supplying us latching relays.

The next question is from [ Darshil Jhaveri ] from Crown Capital.

Sorry, sir, I joined a bit late. I couldn't get the revenue guidance and the margin guidance that we have given. Could you reiterate, please, sir?

So revenue guidance for FY '26 is INR 4,500 crores. And for FY '27, it is INR 5,500 crores to INR 6,000 crores with EBITDA margin of 20%.

So EBITDA margin for both the years, right, is 20%, right?

Yes.

Okay. Okay. That's great to hear, sir. And just wanted to know like, as you said, a lot of tendering from Tamil Nadu and all these states have started to come up. So what kind of an order flow are we targeting right now, sir, like in terms of value, how much can we expect in this year or next year, sir?

So we've always...

Brother, I have given these all things in my opening speech. So it's -- let us take it -- your question afterwards because there might be many other questions coming on the same thing and clear numbers have already been given in my opening speech.

Next question is from Mahesh Patil from ICICI Securities.

Sir, my first question is on the open tenders that you highlighted, the Tamil Nadu, Delhi and the other one, totaling around 4 crore smart meters, right? So I would like to know the status of this, especially the Tamil Nadu one? And have we bid for all the projects in Tamil Nadu?

Just to give you adds up on this, there are 6 projects in Tamil Nadu, 2 in Delhi and 5 in Punjab, totaling around 4 crore meters. Genus has quoted all 13 projects, and status of Tamil Nadu is, it is under technical evaluation. Status of Delhi, it is under technical evaluation. Punjab, 26 lakh meters has been quoted to date.

Okay. And sir, my second question is on the guidance that you have given on EBITDA margin. So in H1, we have achieved more than 21%, you have guided for 20%. And historically, over the last year, so if we see Q4 has been the best quarter in terms of margin. So in FY '26, we will be definitely crossing 21%, 22%, right?

So basically, guidance is -- we want to be a little conservative on the guidance. Let's see.

Okay. And sir, if you can just elaborate on what is leading to this better margins you highlighted? Some cost measures, so if you can elaborate that?

Can you -- sorry, come again with your question? Your voice was not clear.

Sir, on the margins, you mentioned that you have taken some measures for improving the margins like some cost improvements, cost efficiency improvements...

So these are basically, operational efficiencies that is coming, that is -- it's mainly because of the operational efficiencies. It -- mainly, it goes to that.

And sir, what is the difference in terms of margins for the meters that we supply to third parties and budget varies...

That number we don't -- that number we don't share.

[Operator Instructions] Next question is from [ Mahesh ] from Agility Advisors.

Congrats for a good set of numbers. So just wanted to know your thoughts on the export market as well as the smart meters for the gas and water. So what are your views? And how are we approaching that area as earlier...

So we have been talking about it earlier also. So I'll go one by one. On the export market, Genus is working strategically on some -- in some markets. They take their own time. So if you'll see historically also, Genus reached a good 3-figure turnover in terms of exports, but then because of COVID, it slowed down. So again, we have started working on some strategic markets, and you will see very meaningful numbers coming from the export business in the next 2 to 3 years. Currently, it is pretty small, but you will see it growing year-on-year because perfect work is happening in some of the markets. When it comes to gas meters in India, there is a requirement of around 12 crores to 14 crore gas meters as per the latest reports, which will be required to be installed in the next 5 to 6 years. So Genus is definitely going to play an important role in that market. And we also envisage, in future gas meter also takes a route of DSS because at the end of the day, they have to become prepayment for a right metering and taking a gas meter reading entering into a house is not easy. So government is already talking about and thinking of the prepayment gas meters. So we see that as a good opportunity. But yes, on the ground, currently, it is an opportunity where 12 crore meters has to be installed in the next 5 years. Whether they will be prepaid or whether they will go to the RDSS route or they will be simple typical electronic electricity meter kind of a business, that only the time will tell. There's no clarity on it today. When it comes to water meters, we see water meters as a very, very large opportunity, as big as or even bigger than the electricity meters, where it has started coming up. Currently, we have done some very small projects with some municipal corporations. Things have started rolling out in the country. And even in the international market, water meters are going to be a big opportunity. 4 years to 6 years down the line, we see water meter business to be as large or even larger than electricity meter business. So this is what our understanding and thinking about the water meter and the gas meter market.

Okay. Understood. So basically, we are targeting those areas, but it will be 1, 2 years down the line. Is that understanding correct?

I could not hear you properly. I'm sorry.

What I'm trying to say is these are our area of focus, but it will take some time to fructify into the...

Mr. [ Mahesh ], your voice is not clear. Can you please be more loud?

Hello.

Yes, I understood. You are saying, yes, it will take some time for gas meter, water meter, export meter business to be of a meaningful revenue. 2 to 3 years down the line, you will see a very meaningful revenue coming from these sectors. I hope I answered your question.

Yes, yes. Understood. Understood. And sir, so one more question was on the tender side. So we have participated for 3.5 crore meter tenders. And it has been in technical evolution, I think, from the last 2 quarters is what I remember. So when can we expect the order to be finalized? And when can we receive some positive news from them?

Very, very, very difficult to say because these are large tenders. Electricity boards take their own time to evaluate. So right now, technical evaluation is going on. It may take 30 days, it may take 90 days, very difficult to put any number on to it.