Genus Power delivers stable Q1 earnings despite Covid-19 second wave; Stock sheds 2.5%

The Board of Directors has recommended a dividend of 50%.

Jul 30, 2021 01:07 IST India Infoline News Service

Genus Power Infrastructures Ltd., a leading Metering solutions provider & manufacturer for the Power Distribution Industry has announced its unaudited financial results for the quarter ended June 30 , 2021.

Performance Highlights for Q1FY22:
  • Q1FY22 revenue stood at Rs130.4cr as against Q1FY21 revenue of Rs84.0cr. Our operations were severely hampered primarily in the months of April and May on account of second wave of COVID-19 which had led to lockdowns across various geographies in India
  • EBITDA Profit for Q1FY22 stood at Rs5.1cr as against EBITDA Loss of Rs1.7cr in Q1FY21. Higher employee expenses and steeper raw material prices resulted in lower operating margins.
  • PAT stood at Rs0.1cr, as against Net Loss of Rs3.4cr for Q1FY21
  • Cash PAT stood at Rs4.5cr, as against Rs0.2cr in Q1FY21
Key Business Updates:
  • The Board of Directors has recommended a dividend of 50% (Re. 0.50 per equity share) for the financial year 2020-21, subject to approval of the shareholders
  • Tender enquiries have been very robust and are at all-time high – with active engagement of various state DISCOMs. However, order closures have been delayed on account of COVID-19 led disruptions. We expect metering tenders to be rewarded during Q2 or Q3 of FY22. As on 30th June 2021, our order book stood at Rs978cr (net of tax)
Commenting on the performance, Jitendra Kumar Agarwal, Joint Managing Director, Genus Power Infrastructure said, “Our operations in Q1FY22 were severely impacted as inspections were delayed on account of disruptions caused by second wave of COVID-19 - resulting in lower dispatches to SEBs. Lower absorption of fixed costs on account of muted operations also eroded our operating margins, which we expect will be back to earlier levels in the second half of this fiscal year. With rising relaxation of lockdown measures along with increasing vaccinations, our operations are expected to revive sharply over the coming months.

The new scheme i.e. ‘Reforms-Based, Result-Linked Power Distribution Sector Scheme’ that has been approved by the Government of India portents to significantly change the entire landscape of power sector in India – unlike earlier reform schemes – this scheme has been designed by consulting all stakeholders involved. Implementation of the Scheme would be based on the action plan worked out for each state rather than a “one-size-fits-all” approach.

The Standard Bidding Documents has been made by taking inputs from across state DISCOMs, making the entire execution process more practical and easier to implement. It is becoming quite evident from the scale of tenders that have been floated recently, that various states are eager to implement this scheme thoroughly.

The Revamped Distribution Sector Scheme is being seen to address the core issues of billing-collection inefficiencies and pilferage that cripple the Indian power sector. The Scheme provides for annual appraisal of the DISCOM performance against predefined and agreed upon performance trajectories including AT&C losses, ACS-ARR gaps, infrastructure upgrade performance, consumer services, hours of supply, corporate governance, etc.

About half of the total funds of the scheme i.e. about Rs1.5 trillion are to be deployed for installation of smart meteRsAt the same time the ‘Pay-as-you-save model’ devised by IntelliSmart could be the game changer for Indian smart metering business, for it will lead to easier capex funding as well as lower working capital cycle for DISCOMs.

While in all 250 million Smart meters are planned to be installed during the scheme period of five years, priority would be given to install Smart Meters in a mission mode in the first phase in all Electricity Divisions of 500 AMRUT cities with AT&C Losses > 15%, all Union Territories, MSMEs and all other Industrial and Commercial consumers, all Government offices at Block level and above etc. The scheme proposes to install approximately 100 million Smart Meters by December 2023 in the first phase.

Considering the specialized nature of smart meter industry in India and an enormous market, we expect price realizations to remain healthy and the forthcoming period of 5 to 6 years to remain very favourable. 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.

As smart meters are high-end products (viz-a-viz conventional meters), the profitability is also better. And with end-clients increasingly requesting for end-to-end solutions with Facility Management Services (FMS) leads to increased incentive of recurring revenue. We expect the FMS component of our revenue to constitute about 8 to 10% of our total revenue, in foreseeable future.

We provide end-to-end metering solutions to clients with metering communication, services and solutions. India’s energy consumption is set to grow 4.2% a year by 2035 – fastest among all major economies. More than 25cr consumers are grid connected, whose conventional meters will need to be replaced by smart meteRsThus, there is a tremendous growth prospect for us in the years ahead and we are fully geared up to capitalize on this enormous opportunity.”

On Sensex, at around 1:05 PM, Genus Power was trading at Rs72.20 apiece down by Rs1.95 or 2.63% on Sensex.

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