GENUSPOWERNSEQ4 FY2022May 18, 2022

Genus Power Infrastructures Limited

6,897words
143turns
11analyst exchanges
2executives
Management on call
Jitendra Agarwal
JOINT MANAGING DIRECTOR - GENUS POWER INFRASTRUCTURES LIMITED
Kailash Agarwal
VICE CHAIRMAN - GENUS POWER INFRASTRUCTURES LIMITED
Key numbers — 40 extracted
Rs.181 Crore
n coming quarter on back of robust order book and healthy order inflow. We have recorded sales of Rs.181 Crores for Q4 FY2022 as compared to Rs.196 Crores in Q3. For Q4, EBITDA stood at Rs.19 Crores as compar
Rs.196 Crore
ok and healthy order inflow. We have recorded sales of Rs.181 Crores for Q4 FY2022 as compared to Rs.196 Crores in Q3. For Q4, EBITDA stood at Rs.19 Crores as compared to Rs.21 Crores in Q3 FY2022. Higher r
Rs.19 Crore
sales of Rs.181 Crores for Q4 FY2022 as compared to Rs.196 Crores in Q3. For Q4, EBITDA stood at Rs.19 Crores as compared to Rs.21 Crores in Q3 FY2022. Higher raw material prices and lack of operating lever
Rs.21 Crore
Q4 FY2022 as compared to Rs.196 Crores in Q3. For Q4, EBITDA stood at Rs.19 Crores as compared to Rs.21 Crores in Q3 FY2022. Higher raw material prices and lack of operating leverage due to lower capacity ut
10.6%
operating leverage due to lower capacity utilization resulted in lower operating margins of just 10.6%. Profit after tax stood at Rs.11 Crores, up by 34% on sequential basis, as against Rs.8 Crores in
Rs.11 Crore
capacity utilization resulted in lower operating margins of just 10.6%. Profit after tax stood at Rs.11 Crores, up by 34% on sequential basis, as against Rs.8 Crores in Q3 of FY2022. In December 2021, we h
34%
resulted in lower operating margins of just 10.6%. Profit after tax stood at Rs.11 Crores, up by 34% on sequential basis, as against Rs.8 Crores in Q3 of FY2022. In December 2021, we have received o
Rs.8 Crore
of just 10.6%. Profit after tax stood at Rs.11 Crores, up by 34% on sequential basis, as against Rs.8 Crores in Q3 of FY2022. In December 2021, we have received orders worth about Rs.325 Crores across expo
Rs.325 Crore
is, as against Rs.8 Crores in Q3 of FY2022. In December 2021, we have received orders worth about Rs.325 Crores across exports geography and domestic geography. Within domestic geography orders have been rece
Rs.828.57 Crore
and FMS of these one million smart meters from its state utility of Bihar. The total order worth Rs.828.57 Crores (net of tax) is the single largest order finalized by any state utility in India for AMISP to a
Rs.1908.20 Crore
2022 our order book, before adjusting for revenue post March 31, 2022, is stood at Rs.1908.20 Crores (net of taxes). The impact of ’Reform-Based, Result-Linked Power Distribution Sector Scheme’ can
rs,
d Transfer (DBFOOT) arrangement. From the monthly savings made in modern account of the smart meters, the SEBs will undertake monthly payments to system integrators for a period of six to eight years
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Guidance — 20 items
Jitendra Agarwal
opening
“However, we have secured our supply requirements for semi-con for FY2023 and thus expect a robust rebound in revenue in coming quarter on back of robust order book and healthy order inflow.”
Jitendra Agarwal
opening
“These orders will be executed over the next 12 months.”
Jitendra Agarwal
opening
“Thus, we anticipate robust order inflows in FY2023.”
Jitendra Agarwal
opening
“With the implementation of RDSS, we expect the entire landscape of the Indian Metering Industry to drastically change with multi-fold jump in the annual industry size.”
Jitendra Agarwal
opening
“Further, the ‘TOTEX’ model is now getting increasingly accepted among SEBs wherein the capex will be undertaken by AMISPs, also known as system integrators under the Design Build Finance Own Operate and Transfer (DBFOOT) arrangement.”
Jitendra Agarwal
opening
“We plan to play dual roles of being a system integrator ourselves as well as being vendors to other system integrators for their smart metering requirement.”
Jitendra Agarwal
qa
“We have given the guidance earlier also and we surely maintain the same pattern that FY2023 will be around Rs.1,200 Crores; this is what we have given the guidance earlier.”
Jitendra Agarwal
qa
“Surely quarter-on-quarter you will see improvement, the things are becoming better, electronic components shortage is also improving every day, because whatever the works we have done in last six to nine months will start showing from next quarter onwards, so you will only see improvement in a quarter-on-quarter basis.”
Jitendra Agarwal
qa
“And you asked about the lifetime of these orders, so if we take this order book currently what we have in around Rs.2000 Crores, out of this Rs.2000 Crores you can see that around Rs.1,000 to 1,200 Crores are to be executed in next 12 months and remaining are orders of FMS, installation that will be executed over the period of time, so this is how you can differentiate between the order book.”
Mohit K
qa
“Given the input inflation, given the chip shortages, do you think there is a risk to our margin profile or do you think the margin can expand from 10-ish to around improvement, is it possible to improve the EBITDA margin going forward given that our sales are expected to increase in FY2023?”
Risks & concerns — 10 flagged
The impact of ’Reform-Based, Result-Linked Power Distribution Sector Scheme’ can be felt on ground as almost every SEB has come out with inquiries and floated tenders for installation of smart meters.
— Jitendra Agarwal
Given the input inflation, given the chip shortages, do you think there is a risk to our margin profile or do you think the margin can expand from 10-ish to around improvement, is it possible to improve the EBITDA margin going forward given that our sales are expected to increase in FY2023?
— Mohit K
From the current levels, the EBITDA margin will improve significantly, so I do not see any challenge in that and whatever the guidance we have given earlier around 16% of EBITDA margin, we are pretty confident of achieving that 16% by the end of this financial year.
— Jitendra Agarwal
And the project what we are going to do now in this large orders with AMISP only the financial model has been changed where there is less of capex and mainly it is going to be per meter per month, but the technology, the product, the solution, the ground level working is same, so Genus as a company has developed themselves in last three to four years in handling such projects, so technology wise I am not seeing any challenge at all on the ground.
— Jitendra Agarwal
Whenever we will get such large orders, we will have sufficient time to reach to that capacity level so that we are not seeing as a challenge at all.
— Jitendra Agarwal
Justone more thing as I said earlier that first two quarters are going to be very difficult.
— Jitendra Agarwal
Right now, it is very difficult for us to do the sourcing properly if something is available.
— Jitendra Agarwal
I just want to for the interest of everyone, a smart meter can be prepaid, postpaid, online, so it is not a difficult topic.
— Jitendra Agarwal
The full financial year 50%, 60% is I wont not say it is impossible, but yes because first two quarters are going to be difficult, the reason is component availability.
— Jitendra Agarwal
Will glad to be super optimistic so 4000-,5000 is a very doable figure, but yes since the past two years it has been very difficult, any number I do not want to speak.
— Jitendra Agarwal
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Q&A — 11 exchanges
Q
Good afternoon, Sir and congratulations on a decent set of numbers in Q4 and winning the building a large order book. My question is given the order book of 19 billion now, what is the kind of revenue is possible in FY2023 and what is the time life cycle of these orders?
Jitendra Agarwal
We have given the guidance earlier also and we surely maintain the same pattern that FY2023 will be around Rs.1,200 Crores; this is what we have given the guidance earlier. Surely quarter-on-quarter you will see improvement, the things are becoming better, electronic components shortage is also improving every day, because whatever the works we have done in last six to nine months will start showing from next quarter onwards, so you will only see improvement in a quarter-on-quarter basis. And you asked about the lifetime of these orders, so if we take this order book currently what we have in
Q
Thanks for the opportunity. In the last con-call, you had said that you will look at capex in the month of May and June if required, so could you update us on? Any new capex is required and when will you do that?
Jitendra Agarwal
Currently, we are not needing any capex, so as such we do not have any. Small capex, here and there, we keep doing it and it is a regular feature of the manufacturing industry, but nothing major we are going to do currently. Okay, but if that Rs.25,000 Crores order book, which is to be quoted in the next three, four months so if we get a good part of that order, then the new capex will be done accordingly? As we have always maintained earlier also as Genus since we have a very strong hold because we are a vertically integrated manufacturing company, so we have a very strong hold on our product
Q
Congrats on getting a large order. My question is with this kind of large pipeline, are we seeing any new players coming to the foray and bidding or we have the usual, if I remember correctly, our peers being Schneider, L&T and those type of player only are bidding and how do you see the competitive landscape in that context, also if say all tenders come together, do you think industry has a capacity to build and execute this large order or the people who are probably late in the timelines may face challenges in procurement itself and given the scenario that you mentioned, we do have those ele
Jitendra Agarwal
Thank you very much. You asked many things; can you repeat it, I am sorry. I will ask one by one in the areas. One is, if you can give me the sense of competitive landscape and also if there are any new bidders coming in Sir? There are two types of very clear markets. One is, a meter manufacturer, which we are currently doing like companies like Genus, Schneider, Secure Meters, HPL, I am not seeing any new participant coming as a meter manufacturer. It was quite concentrated with all the players which are already there, A category, B category, C category, but there is no new player. No interna
Q
Thanks for the opportunity. Pardon my ignorance if I am asking something very basic, but I just wanted to understand from a macro perspective, the whole scheme that the government is running right around Rs.1.5 Lakh Crores for the deployment of the installation of the smart meters, right maybe over the next decade; if you can help me break up this number into two, three categories because the whole system will require manufacturers, communication guys, software guys, and then somebody who will be running the whole thing right, so if you can help us break down into these four segments and also
Jitendra Agarwal
It is a very broad question; it is like explaining the whole industry., So there is one way, in the interest of time of everyone I can explain you separately. There will be four components and just speak very broadly, the government is talking about 250 million smart meters and we are… Better, we can ask SGA, they can draw mail to us and we can just to clarify on that. It will be better, because if I had to explain broadly, it will take lot of time. No issues, I will send the mail. We will be more than happy to explain it. Sure Sir.
Q
Thank you very much for providing me this opportunity. My question is, I want to know how much portion of the smart meters that belongs from indigenous components, percentage-wise, and how much we are outsourcing from outside India?
Jitendra Agarwal
Almost 70% of the raw material is indigenous and 30% is imported, so we have given the same numbers to the Government of India also, so we can say depends on the different companies have different designs, but the ballpark that the industry has given to Government of India 60% to 70% as indigenous and 30% to 40% as imported. Okay, thanks a lot and want to know Sir that we have already got a Rs.828 Crores order book from a state utility, from which state utility we have got that order Sir? Rs.828 Crores means? Rs.828 Crores order book. That is from Bihar state electricity board, South Bihar, SB
Q
Good afternoon, so just couple of bookkeeping questions Sir. I see our inventory levels have gone up year-on-year, so what it has been that relating to?
Jitendra Agarwal
I could not understand. Can you repeat? Inventory on the balance sheet has gone up from Rs.177 Crores to Rs.220 Crores, so why it has gone up? I have been maintaining every year also, but we are continuously stocking components so the only reason is that. Right now, it is very difficult for us to do the sourcing properly if something is available. We are running in a shortage period, so how it has been planned, so wherever we get something, don’t so that is the only reason the inventory has gone up. It is a very planned inventory going up, nothing unusual at all, it is very well planned. Inves
Q
Thank you for the opportunity once again Sir. You have just mentioned that you will be receiving Rs.76 Crores per year, is that from the second year onwards from the implementation?
Jitendra Agarwal
Once we complete one million, I am just giving you the maximum what we can receive in a year, once we complete one million. This recurring revenue start once we do 5,000 meters, after every 5,000 meters the UAP is done . Once the UAP is done, the meters go live. Is this the opex returns, which you can say? This is the opex returns. Once the 50,000 meters are completed, the revenue will start coming. 5% of the total. Revenue will start coming. Because this is also under the RDSS scheme so the state government will be getting the grants of 15% and the incentives as well from the center? It is no
Q
Thank you for the opportunity. I am a little new to the company, so pardon me if my questions go somewhere. I just wanted to know that you mentioned that the capacity is right now 11 million units, which is for conventional meters, so what would be the capacity in terms of smart meters like do they take the same time in assembling smart meters and conventional meters?
Jitendra Agarwal
They do not take same time in assembly, but we have already upgraded our facility, so when we talk about capacity 75% to 80% is the capacity for the smart meters. When we say 11 million, 75%, 80% is the capacity for smart meters. Basically, you can say by ramping up, can we run for 50% to 60% utilization in FY2023 for smart meters,, once we start the order for the smart meters in September? The full financial year 50%, 60% is I wont not say it is impossible, but yes because first two quarters are going to be difficult, the reason is component availability. Okay and the order that you have rece
Q
Thank you Sir again for the opportunity. My question is during the call you mentioned that Adani and Tata Power are taking interest in AMISP, so would they be procuring the smart meters from us?
Jitendra Agarwal
Yes, people like us. Currently there are two, three big quoted, which they could not win. But they are quoting with people like us only. Surely we will play a role of being a smart meter manufacturer for them. Okay and my next question is our capacity is 10 to 11 million meters so what kind of turnover you expect to do with the major smart meters being produced at full capacity? All full capacity, if we take a ballpark figure, we can comfortably do 3,000 plus. Okay and my last question is with all the states joining in to procure smart meters, so where do you see the company let us say after t
Q
Good afternoon, Sir. Most of my questions have been answered. Just one thing I missed, could you give the revenue guidance for FY2023 please?
Jitendra Agarwal
I gave it in the beginning itself, it is around Rs.1,200 Crores. Thank you so much.
Q
Thank you ladies and gentlemen. We apply our deep industry domain knowledge to manufacture quality products and successfully resolve our clients’ challenges. So we are confident of delivering sustainable growth as it is on the back of robust processes. With rapid adoption of smart meters over the coming years, we are committed to continuing to deliver top notch innovative smart metering products to meet evolving demand in the Indian market. We shall continue to raise the bar and strive to maintain the leadership position. In case you have any further queries, please get in touch with SGA, our
Management
Speaking time
Jitendra Agarwal
54
Anshuman Ashit
19
Moderator
13
Rajiv Rupani
10
Amish Kanani
10
Kailash Agarwal
9
Suraj Nawandhar
7
Mohit K
5
Jainam Gelani
5
Shantanu Chatterjee
4
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Opening remarks
Jitendra Agarwal
Good evening, ladies and gentlemen. A very warm welcome to the Q4 FY2022. I have Mr. Kailash Agarwal, Vice Chairman of the company and SGA our Investors Relations along with me in this call. The results and investor presentation are uploaded on the stock exchange and company website. I hope everybody had a chance to look at it. So few highlights, revenue of Q4 2022 was impacted by lower capacity utilization due to shortage of semiconductors and other critical electronic components. However, we have secured our supply requirements for semi-con for FY2023 and thus expect a robust rebound in revenue in coming quarter on back of robust order book and healthy order inflow. We have recorded sales of Rs.181 Crores for Q4 FY2022 as compared to Rs.196 Crores in Q3. For Q4, EBITDA stood at Rs.19 Crores as compared to Rs.21 Crores in Q3 FY2022. Higher raw material prices and lack of operating leverage due to lower capacity utilization resulted in lower operating margins of just 10.6%. Profit afte
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