GENUSPOWERNSEQ2 FY23November 18, 2022

Genus Power Infrastructures Limited

4,898words
97turns
6analyst exchanges
2executives
Management on call
Jitendra Agarwal
JOINT MANAGING
Kailash Agarwal
THE VICE CHAIRMAN DIRECTOR
Key numbers — 40 extracted
INR 219 crore
company website. I hope everybody has had a chance to look at it. So, we have recorded sales of INR 219 crore in Q2 FY23 up by 23% as compared to INR 178 crore in last quarter. Revenue growth for Q2 was impac
23%
ody has had a chance to look at it. So, we have recorded sales of INR 219 crore in Q2 FY23 up by 23% as compared to INR 178 crore in last quarter. Revenue growth for Q2 was impacted on account of re
INR 178 crore
e to look at it. So, we have recorded sales of INR 219 crore in Q2 FY23 up by 23% as compared to INR 178 crore in last quarter. Revenue growth for Q2 was impacted on account of reduced capacity utilization due
INR 17 crore
that, we expect to carry forward that momentum in financial year '24. For Q2 FY23, EBITDA stood at INR 17 crore as compared to INR 15 crore in last quarter, an increase of 16%. Higher prices of raw materials an
INR 15 crore
ward that momentum in financial year '24. For Q2 FY23, EBITDA stood at INR 17 crore as compared to INR 15 crore in last quarter, an increase of 16%. Higher prices of raw materials and a lack of operating levera
16%
Q2 FY23, EBITDA stood at INR 17 crore as compared to INR 15 crore in last quarter, an increase of 16%. Higher prices of raw materials and a lack of operating leverage as a result of lower capacity uti
INR 10 crore
t of lower capacity utilization continued to hamper operating margins. Profit after taxes stood at INR 10 crore as compared to INR 7 crore in the last quarter, a growth of 56% on YoY basis. In April 2022, we
INR 7 crore
ion continued to hamper operating margins. Profit after taxes stood at INR 10 crore as compared to INR 7 crore in the last quarter, a growth of 56% on YoY basis. In April 2022, we received a LOA for appointm
56%
fit after taxes stood at INR 10 crore as compared to INR 7 crore in the last quarter, a growth of 56% on YoY basis. In April 2022, we received a LOA for appointment of AMISP, including design of AMI
10 lakh
pointment of AMISP, including design of AMI system supply, installation and commissioning of about 10 lakh smart prepaid meters. DT meter reliable energy counting and FMS for these smart meters from a sta
INR 828.57 crore
liable energy counting and FMS for these smart meters from a state utility. That total order worth INR 828.57 crore (net of tax) is the largest single order finalized by any state utility in India for AMISP during
INR 1,761 crore
utility in India for AMISP during that period. As on 30th September 2022, our order book stood at INR 1,761 crore (net of tax). On 30th July 2022, Prime Minister Shri. Narendra Modi ji launched the Power Minist
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Guidance — 20 items
Jitendra Agarwal
opening
“However, we anticipate a sharp revenue rebound in H2 on account of robust order book and healthy order inflow and normalcy in supply chain to be restored within the next 3 to 4 months.”
Jitendra Agarwal
opening
“Post that, we expect to carry forward that momentum in financial year '24.”
Jitendra Agarwal
opening
“As a result, we anticipate strong order inflow in coming quarter of financial year '23.”
Jitendra Agarwal
opening
“With the implementation of RDSS, we expect the entire landscape of the Indian metering industry to drastically change with multifold jump in the annual industry size.”
Jitendra Agarwal
opening
“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
“All these developments will culminate into robust order inflows, healthy top line growth, better operating margins as well as improved working capital cycle for coming 6 to 7 years starting from next quarter, next half yearly for Indian metering industries.”
Jitendra Agarwal
opening
“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.”
Jitendra Agarwal
qa
“And this includes tenders which are already participated and tenders which will be participated.”
Jitendra Agarwal
qa
“As I said earlier in my statement, that we will be playing the dual role in this industry.”
Jitendra Agarwal
qa
“Tenders, which will be participated in the next, I would say, 2 to 3 months which are already in the market, but it will be participated in next 2 months or to the tune of -- for Totex model they are to the tune of INR 20,000 crore from MP, Maharashtra, Mizoram, West Bengal, Himachal, Chhattisgarh, from multiple states has come out with the system integrator tenders on the Totex model.”
Risks & concerns — 3 flagged
These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
— Jitendra Agarwal
So, off late, we have seen some slowdown in the installation.
— Anshuman Ashit
And what are the primary reasons for the decline in operating margins in H1 despite increased sales?
— Shreya Varma
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Q&A — 6 exchanges
Q
Sir, the first question is on the tenders which have been floated recently. If you could quantify and give us some more details on which states have come out with what amount of tenders? And how confident are you of these being awarded over the next 3 to 6 months?
Jitendra Agarwal
So, I'll just give the brief in the interest of everyone. The tenders to the tune of INR 60,000 crore are in the market right now. And this includes tenders which are already participated and tenders which will be participated. So, tenders which are already November 14, 2022 Genus Power Infrastructures Limited participated are to the tune of INR 36,000 crore which are in the Totex model or AMISP. Not every tender, Genus participates as a system integrator. So, we participate few tenders as system integrators, few tenders as a meter manufacturer. As I said earlier in my statement, that we will
Q
I just wanted to understand, in the last quarter, say, July to September, how much tenders were actually awarded? Do you have any idea?
Jitendra Agarwal
Can you repeat your question? I missed somewhere in between. No, I was just trying to understand, in the last quarter, so like while the tender processes have started, like how much worth of tenders were awarded? In last quarter? Yes. Last 3, 4 months, let's say, from -- since the time the activity has fixed up? How much of orders -- tenders has been awarded? Yes, not to us but to the industry globally or to the industry here? So, I don't have the exact figures with me, so I don't want to comment on that because very few tenders have been decided in the last 2 quarters. But cannot give you any
Q
Just had a couple of questions. Firstly, when you think the supply of semiconductors will return to normal?
Jitendra Agarwal
So, as I said earlier, it is improving by the day, but it is not yet normal, not yet to the pre-COVID levels. That will take some 3 to 4 months. Okay. And what are the primary reasons for the decline in operating margins in H1 despite increased sales? What has been our capacity utilization for the first half? As I said during the speech also, it is due to lower capacity utilization and some increase in the raw material prices. November 14, 2022 Genus Power Infrastructures Limited And when can we expect the revenue traction to pick up given our strong order book? And when can we expect the comp
Q
I had 3 questions really. So first 1 on the CapEx side. So, what is the level of capital expenditure that the company is required to make for participating as a system integrator say coming in the next 2 years?
Jitendra Agarwal
Kailash sir, you want to answer this? No, no CapEx, I think there won't be much CapEx required. We already have a meter manufacturing capacity of 10 million meters, we have to increase, even if we have to increase to 15 million or 20 million that won't require a lot of CapEx also. That will be -- in case if it will be done, it will be hardly INR 25 crore, INR 30 crore for making it just the double from the capacity we have from here. So, you can just assume that for doubling the capacity, there might be our CapEx requirement in next 2 years. Okay. But given the expected multifold increase in s
Q
I have couple of questions. Does the company have any significant entry barriers that give it an advantage over its competitors? And given the expected multifold increase in the industry size, are we witnessing any new players entering the smart metering industry? Being the leaders of the industry and providing end-to-end solutions, I don't say there is a entry barrier for others to do it but since we have been doing it and the reach what we have created for ourselves across the country is definitely not easy for anyone to do it and they will need a significant time to reach to this level. It'
Parth Dattani
Okay. Got it. Just the last one, how much revenue growth can we expect from the current level in the next 3 to 4 years? And also, with the smart meters replacing the traditional meters, what is our outlook for operating margins in the coming year for the overall industry and Genus Power? So that we will -- this guidance, we will be liking to give in the concall of fourth quarter of this financial year because we -- as a lot of business is coming in the November 14, 2022 Genus Power Infrastructures Limited markets. Business is coming in the market. So, we are aggressively bidding on that and we
Q
So, thank you, everyone. We apply our deep industry domain knowledge to manufacture quality products and successfully resolve our clients' challenges. 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 marketplace. We shall continue to raise the bar and strive to maintain our leadership position. In case you have any further queries, please get in touch with SGA, our Inves
Management
Speaking time
Jitendra Agarwal
40
Srijan Sinha
14
Anshuman Ashit
10
Nikhil Jain
8
Moderator
7
Shreya Varma
7
Kailash Agarwal
7
Akash Mehta
3
Parth Dattani
1
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Opening remarks
Jitendra Agarwal
Ladies and gentlemen, good day, and welcome to Genus Power Infrastructures Limited Q2 FY23 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 date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance, during the conference call, please signal an operator by pressing “*” then “0” on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jitendra Agarwal, Joint Managing Director of Genus Power Infrastructures Limited. Thank you, and over to you, sir. Good evening, everyone. A very warm welcome to the Q2 FY23 earnings call of Genu
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