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Global Economy

The pandemics negative shocks, the Russian Federations invasion of Ukraine, and the extreme tightening of monetary policy to combat high inflation overlap and linger, leaving the world economy in an unstable state. It is anticipated that the global economys early-year strength would diminish. With Chinas economy recovering more quickly than anticipated and strong consumer demand in the United States, growth in several major economies has been greater than anticipated early this year. However, global economic activity is expected to slacken overall in 2023, with Western economies experiencing a big slowdown and China experiencing a significant increase.

The impact of tighter monetary policy on growth is expected to peak in major economies in 2023, while long-term inflationary pressures persist. Recent tensions in the banking industry will make credit conditions even more restrictive, resulting in a noticeable slowdown in the second half of this year.

Although base effects, easing supply chain pressures, and declining commodity prices have all led to a slowdown in global headline inflation, core inflation remains high in many nations. After reaching a peak of 9.4 percent in July measurements of core inflation, however, indicate that the disinflation that began last year has advanced only haltingly.

Lower energy costs are reducing headline inflation and relieving pressure on household budgets, while Chinas earlier-than-anticipated reopening has boosted global activity. Inflation and trade volumes in 2022 were significantly influenced by changes in commodity prices. The price of natural gas in Europe had notably sharp oscillations, rising 48% between January and August 2022 and decreasing 76% by February 2023. Natural gas prices typically vary widely among locations, in contrast to oil prices, which tend to be highly connected. Regional gas costs may eventually be equalised by increased commerce in liquified natural gas (LNG), but for the time being this convergence is constrained by pipeline and shipping infrastructure.

In all, global growth is forecast to slow from 3.1 percent in 2022 to 2.1 percent in 2023, before edging up to 2.4 percent in 2024. Relative to the January projections, this is 0.4 percentage point stronger in 2023 and 0.3 percentage point weaker in 2024. Greater-than-expected resilience of major economies at the end of 2022 and early in 2023 led to the overall upgrade to growth in 2023.



After Indias real GDP contracted in FY20/21 due to the pandemic, growth bounced back strongly in FY21/22, supported by accommodative monetary and fiscal policies and wide vaccine coverage. As a result, Indias economy grew at one of the fastest rates in the world in 2022, despite significant obstacles in the global environment, such as supply chain disruptions that have returned because of rising geopolitical tensions, synchronized tightening of monetary policies around the world, and inflationary pressures.

The World Bank predicted "limited spill overs" from a projected global slowdown to Indias third- largest economy in 2023-24 (FY24), which is a drop from the forecast 6.9 percent growth in 2022-23 (FY23). India appears to be on course to overtake China as the third-largest economy by 2047. Strong domestic demand, solid investment activity supported by the governments push for infrastructure construction, and brisk private consumption, particularly among higher income earners, served as the foundation for growth. Due to fiscal consolidation, the domestic demands composition also shifted, with government consumption declining.

However, since Q3 FY22/23, there have been indications of moderating, even though the overall growth pace is still strong. Indias economy in FY23/24 is anticipated to be hampered by the continuous headwinds of rising borrowing rates, tightening financial conditions, and persistent inflationary pressures. Real GDP growth is anticipated to slow from the expected 6.9 percent in FY22/23 to 6.3 percent in FY23/24.

The construction, real estate, and services industries are all still doing well. Additionally, this is supported by rising sales of cement and steel, rising freight and passenger traffic, rising IIP numbers for construction, and rising bank lending to the services sector. After shrinking in Q2 and Q3 of FY23, the manufacturing sector expanded by 4.5% in Q4, bringing the overall growth in positive territory at 1.1% for FY 23. Since September 2022, growth in lending to manufacturing, particularly major industry, has substantially decreased. Expenditure on private consumption (PFCE) increased by 7% in FY 23 compared to FY 22.

However, PFCE decreased in Q4 of FY 23 compared to Q3 of FY 23. In dollar terms, Indias service exports expanded by more than 28% in FY 23 compared to 9% growth for non-oil merchandise exports. Exports of non-oil goods have decreased during the past five months compared to the same period last year. From their heights in early 2022, commodities prices have significantly decreased. As a result, Indias imports of products have decreased. After falling to US$531 billion in October 2022, Indias foreign exchange reserves have since increased to around US$600 billion.

In terms of medium-term growth, India remains in a favourable position for growth over the next few years. The country is steadily digitising and moving towards a greener future as macroeconomic factors remain stable, the external sector is steady, NPAs are at an all-time low, corporate balance sheets have been deleveraged, the consumption story is unaffected, and service exports are booming. India may anticipate a multi-year economic cycle with a pick-up in the private investment cycle for manufacturing and infrastructure. The Indian economy is nevertheless positioned for growth in this uncertain time.

Solar Power Industry

Solar energy has a bright future! Energy prices are predicted to stay at record highs through 2023, so its no surprise that renewable and sustainable energy sources, led by solar, are gaining popularity. In fact, it is estimated that by the end of 2023, the world would produce more solar energy than a terawatt. Considered to be the best feasible replacement for traditional power sources like coal and oil, renewable energy sources are known to minimise carbon emissions and serve as an affordable supply of daily power.

Population growth has a direct impact on energy generation and consumption in emerging nations. With the increased need to reduce carbon emissions, power generation from renewable sources is the best viable replacement for conventional power sources. For instance, the price of coal and oil goods is rising steadily. Another option for the expansion of the solar power sector is the building of new grids and mass storage systems by utilities to use the energy produced from renewable sources.

The size of the worldwide solar power market is anticipated to increase from USD 234.86 billion in 2022 to USD 373.84 billion in 2029, representing a CAGR of 6.9%. With a compound annual growth rate of 41.39%, Indias total installed solar energy capacity climbed from 6.76 GW in FY 2016 to 54.00 GW in FY 2022. Solar energy is one of the most often used renewable energy sources in India, a market that is consistently growing through effective government and private sector cooperation. The government announced the issuance of sovereign green bonds as well as the grant of infrastructure status to energy storage technologies, including grid-scale battery systems, under the Union Budget 2022-23. Additionally, the government provided Rs. 19,500 crore ($2.57 billion) for a PLI programme to promote the production of high-efficiency solar modules. With investments made along the whole value chain, India is poised to become a hub for global manufacturing. Indias electricity needs, according to the Central Electricity Authority (CEA), are expected to increase and reach 817 GW by 2030. By the same period, the government wants to install 500 GW of renewable energy capacity. In terms of the global deployment of solar electricity, India came in fifth.

Solar EPC Market Outlook

The size of the global solar EPC market exceeded USD 215 billion in 2022, and from 2023 to 2032, it is anticipated to grow at a rate of above 6.9% CAGR prompted by the increasingly stringent sustainable development goals across many major economies. Governments across the world are pushing solar energy projects as investments, thereby promoting sustainability and aiding the switch to sustainable energy sources. Solar energy system development and installation are encouraged by government support provided through advantageous policy frameworks including Renewable Portfolio Standards (RPS), Feed-in Tariffs (FITs), and Power Purchase Agreements (PPAs). These regulations offer grid access, long-term contracts, and price guarantees, which support the growth of the solar EPC (Engineering, Procurement, and Construction) business. Asia Pacific is likely to hold the highest proportion of the solar EPC market from 2023 to 2031. In 2022, the region held a sizeable share of 51.4%.

Indias solar EPC (Engineering, Procurement & Construction) market is expected to have significant growth between 2023 and 2032 on the back of advantageous government initiatives including strict regulations, laws, and norms to reduce carbon emissions. Additionally, the ongoing use of renewable resources in several applications will improve the overall business climate. The Indian Green Open Access Policy 2022, for instance, was a significant win for the solar industry. The World Bank awarded US$ 165.0 Mn in June 2022 to help the household sector in India deploy rooftop solar systems and increase access to solar energy. These solar photovoltaic (PV) projects aim to reduce greenhouse gas emissions while providing clean, renewable electricity. They will probably reduce GHG emissions by 13.9 million tonnes. The value of the solar EPC (Engineering, Procurement, and Construction) industry is therefore predicted to increase in the next years due to the surge in investment in PV projects.



The Union Budget for 2023-24 has provided for a budgetary allocation of Rs 7,327 crore for the solar power sector including grid, off-grid, and PM-KUSUM projects, a 48 per cent increase over the previous Rs 4,979 crore provided in the Revised Estimates in the document.

The Expenditure Budget document for 2023-24 states that Rs 4,970 crore, Rs 1,996 crore, and Rs 361 crore are allotted for grid-interactive solar power projects, PM-KUSUM, and off-grid solar power projects, respectively.

Implementation of Phase-III of the off-grid solar PV initiative, which entails the installation of 100 MWp worth of solar power packs as well as the distribution of 25 million solar study lamps and 3 lakh solar streetlights. Additionally, more than three lakh solar streetlights would be built as part of AJAY Phase- II. The document said that additional concentrated solar thermal installations totalling 20 MW would be implemented.

A total of Rs 1,214 crore has been allotted for wind energy projects for the current fiscal year, which is a 14% decrease from the Rs 1,413 crore allotted in the Revised Estimates. The Expenditure Budget Paper for 2023-24 allocates Rs 279 crore to the National Green Hydrogen Mission.

The Union Cabinet chaired by the Prime Minister has approved the introduction of Production-Linked Incentive (PLI) Scheme in High Efficiency Solar PV Modules to increase Indias manufacturing capacity and increase exports as part of Atmanirbhar Bharat. National Program on High Efficiency Solar PV Modules: Tranche 1: INR 4500 Cr ($ 605 Mn) - Tranche 2: INR 19,500 Cr - B$261 (B$25) for setting up a fully integrated solar PV module manufacturing capacity of 8.737 GW/ Annual GW of partially integrated solar PV module manufacturing capacity of about INR 17,500 crore per year import substitution, and promotion of research and development to achieve higher efficiency in solar PV modules.

Global EV Industry

The world of electric vehicles (EVs) saw tremendous disruption in 2022 and 2023 is expected to be even bigger with further developments in the EV sector. Despite supply chain disruptions that are challenging manufacturers, 2023 is predicted to be one of the finest years for the adoption of electric vehicles. Technology in this industry is advancing at a rapid rate. With the advancement of technology and consumer interest, the landscape of electric vehicles is rapidly shifting. In the upcoming years, a significant increase in the number of EVs on land, sea, and in the air is expected.

The environmental impact of conventional fuel vehicles and the increase in fuel prices have paved the way for alternative fuel vehicles in the market. The global electric vehicle market is projected to grow from USD 500.48 billion in 2023 to USD 1,579.10 billion by 2030, showing a CAGR of 17.8%. A total of 14% of all new cars sold in 2022 were electric, from about 9% in 2021 and less than 5% in 2020. Global sales were dominated by three markets. China once again led the way, accounting for nearly 60% of global electric car sales. The country currently accounts for more than half of all electric vehicles on the road and has already surpassed its goal for new energy vehicle sales by the year 2025.

More than one in every five electric vehicles were sold in 2022 in Europe, the second-largest market for electric vehicles, thanks to a 15% increase in sales. In 2022, electric car sales in the third-largest market, the United States, increased by 55%, resulting in an 8% sales share. Outside of the major markets, sales of electric vehicles are typically low, however India, Thailand, and Indonesia saw increases in 2022 by more than three times. In 2022, Thailands proportion of electric vehicle sales to total vehicle sales was just over 3%, compared to an average of 1.5% for both India and Indonesia last year. The governments USD 3.2 billion incentive plan, which has garnered USD 8.3 billion in investments, is helping Indias EV and component manufacturing ramp up. To promote the adoption of EVs, Thailand and Indonesia are also improving their policy assistance programmes, which might be a great lesson for other emerging market economies.

Indias EV Market

The Indian electric vehicle market is witnessing remarkable growth due to various factors such as the increasing demand for high-performance and fuel-efficient transportation systems, as well as the escalating costs of traditional fuels like petrol, diesel, and CNG. Advances in battery technology, an expanding network of charging infrastructure, and increasing consumer demand have made electric vehicles a viable option for many drivers around the world. Changing the way we think about driving, these vehicles run on electricity stored in batteries instead of fuel and use electric motors to turn the wheels. Electric vehicles are also preferred owing to their environmental friendliness, as they do not produce exhaust emissions, reduce dependence on oil and have lower operating costs compared to conventional vehicles.

In addition, the Indian government is committed to reducing its carbon footprint by enforcing strict regulations on vehicle emissions and providing financial incentives to consumers to purchase electric vehicles. Creating a favourable environment for the growth, the EV market in India is projected to reach USD 23.5 billion by 2031, registering a CAGR of 23.47%. The charging infrastructure is expanding with investments in the installation of charging stations by governments and private companies.

India is at the inflection point for all types of electric vehicles as far as electric penetration is concerned. As of September 1, 2022, 3.5 lakh units of EVs were registered, with Uttar Pradesh topping the country for EV registrations, followed by Tamil Nadu. and Karnataka. The e-rickshaw/e-cart category (top speed below 25 km/h) dominated the market where three-wheeler sales grew by 45%, the highest the market has seen. Sales of all EVs are expected to grow at a CAGR of 68% by 2027. e2Ws and electric auto categories which are three and four-wheeler EVs will account for increased sales (including e-rickshaws). Electric buses are gaining traction due to the need for more fuel-efficient and cleaner buses that produce minimal pollution. Currently electric buses are found on the roads of Lucknow, Delhi, Kerala, Dehradun, Manali and Hyderabad as public transport and state road transport services.



Amounts totalling INR 35,000 crore are set up in the Union Budget for 2023-24 for capital expenditures in the energy transition and net-zero goals by 2070. Battery Energy Storage Systems having a capacity of 4,000 MWH are supported by the government. With a budget increase of 80%, programmes like FAME-II and PLI assist clean energy cars. Imports of foreign electric vehicles could rise as a result of excise duty exemptions and lower customs taxes on lithium-ion batteries.

Ahead of Japan and Germany, India is the third-largest vehicle market worldwide in terms of sales. To move consumer demand towards greener solutions, there is currently pressure on producers and governments to work together. With 7.1 percent of Indias GDP and a considerable employment component, the automotive industry plays a key role in the countrys economic development. According to the Economic Survey 2023, the domestic electric vehicle industry in India will develop at a 49 percent compound annual growth rate (CAGR) between 2022 and 2030, reaching 10 million sales every year by that point. Furthermore, it is anticipated that by 2030, the electric car industry would generate 50 million direct and indirect jobs.

News reports believe EV technologies will stabilise by approximately 2030, rather than the 2040s as had previously been predicted, and that the heavy trucking sector may experience changes a little later. EVs not only sell themselves, but the Indian government has done a tremendous job of supporting the growth of EV demand and production. In addition to their general roles as policymakers, the state and federal governments also play important roles.

The market for electric vehicles in India is expected to expand significantly during the next few years. The nation is ideally situated to make the switch to a more sustainable and environmentally friendly form of transportation thanks to supporting government legislation, rising consumer awareness, and technological breakthroughs. The opportunity for both domestic and foreign businesses to participate in and support the expansion of Indias EV ecosystem is enormous as the demand for EVs rises.

Business & Segment Overview

Business Overview

The Company Gensol Engineering is a renewable-energy solutions provider with a prime focus on end- to-end solar engineering, procurement, and construction ("EPC") projects. The Company has carved a niche in commercial and industrial (C&I) category of consumers, whose pure focus rests on optimising power costs. The company designs, engineers and manages all aspects of project execution from conceptualizing to commissioning for solar projects envisaged for development by the C&I consumers.

The Company has in-house, qualified, and competent engineering and project managements teams that, with their deeply rooted domain expertise, ensure that only solar power projects stamped with impeccable quality are raised. The Companys massive domain experience that stems from a decade- long hard work and an immutable focus on quality of materials, compliance to safety and engineering standard helps it raise solar assets that outmatch their contracted parameters.

The Companys closed-loop policy, which it employs in managing its vendors relations and, thus, the entire procurement process has helped it tide over the turbulence created by the steaming commodity markets and the plunging Indian currency. Clarity of the process and polished oversight of the management has kept it afloat in these murky waters and, finally, come out profitable.

Segment Overview

The total revenue from operations of the Company stands at f 3926.5 million as against f 1604.1 million in the Financial Year 2021-22, reflecting a growth of over 145% on a YoY basis. The Companys EBITDA stood at f606.7 million compared to f174.8 million in the previous fiscal. The Company reported a total profit after tax of f 249.1 million as against a profit after tax of f 110.9 million in the Financial Year 2021-22.

The companys growth was driven mainly by a sustainable improvement in the delivery of services, amid commodity inflation and sliding Indian currency.

Review of Financial Performance for the Year

(Rs. Million) FY 23 FY 22
Revenue from Operations (Net) 3926.5 1604.1
Other income 46.9 19.8
Total income 3974 1624
Operating Profit (EBITDA) 606.7 174.8
EBITDA Margin (%) 15.45% 10.90%
EBIT 493.2 161.7
EBIT Margin (%) 12.56% 10.08%
Net Profit 249.1 110.9
Net Profit Margin (%) 6.35% 6.91%

Key Ratios (Consolidated)

Particulars FY 23 FY 22
EBITDA to Sales (%) 15.45% 10.90%
PAT to Sales (%) 6.35% 6.91%
Total Debt to Equity 2.499 1.774
Net Debt to EBITDA 3.916 4.081
Return on Capital Employed (%) 7.00% 13.00%

Capital Expenditure

Total capital expenditure incurred for the year was Rs. 1696.6 million majorly includes purchase of four-wheel electric cars which are further leased-out to ride hailing platform.

Risk Management

Risk Business Impact Mitigation measures
Supplier Concentration Risk With limited number of local and global suppliers, the Company faces the risk of delayed supply or unavailability of desired quality of key raw materials. This may impact timely completion of projects or may lead to increase in cost for the Company. Over the years, the Company has established long-lasting relationships with most suppliers. The robust vendor selection process ensures all its suppliers have a strong history of supplying high quality materials, with a strong financial strength and market reputation. Periodic supplier audits and good market monitoring throughout the entire supply chain enables the Company to keep a check on timely supply of desired quality raw materials.
Competitive Risk With limited number of local and global suppliers, the Company faces the risk of delayed supply or unavailability of desired quality of key raw materials. This may impact timely completion of projects or may lead to increase in cost for the Company. The lucrative growth of the market exposes the Company to an increased threat from competition both domestic and international. This may impact the successful bidding and winning of projects.
Operational Risk Operational risks may result from inadequate control on internal processes, people, and systems. External factors also pose threat to business operations. Business operations are carried out basis well-defined policies, operational processes, and systems and are regularly subjected to systems audits. Strong HR practices and a people-friendly approach helps to keep motivational levels high and ensure a high retention rate.
Module Price Hike Risk In case of a sharp increase in the price of polysilicon, a key input for cell and module manufacturers, the price of solar modules may increase. Higher solar module prices will likely impact the returns of solar power project developers. The Company closely monitors price of all products it uses and maintains inventory accordingly.
Commodity Risk The Company has a diverse business with operations spread across geographies. The Company faces risk related to change in the price and other terms of commodities which may have a bearing on its profitability. The Companys risk management team adopts various strategies like hedging on the commodity through forwarding contract, futures contract, options contract etc., to minimise any risk due to fluctuation in price of different commodities.
Cyber Fraud Risk With higher adoption of work from home and increased use of technology to redefine business especially in the post Covid -19 era, cyber risk has emerged as one of the big threats for businesses. The Companys cyber security team assesses, analyses and monitor the various risks related to increased use of technology. The Company has developed cyber risk management strategies in the enterprise and emerging technologies as they are deployed.

Human Resources Overview

Our people are the most prized assets of our business. The well-being of employees is of high priority to the Company. The Companys HR initiatives primarily focus on the physical and psychological concerns of the employees. The training initiatives are focused on up-skilling, re-skilling, and cross skilling to leverage human resources, as well as to identify and focus upon specific areas of role-based skills-building. The Company strives to uphold a culture of close-connect with people, build sustainability and talent retention.

Development initiatives that serve these objectives include cross-business synergy, focus on individual leadership, synergy and cohesiveness, and building leaders as mentors. Enabling all-round leadership accountability and commitment to personal growth as a leader, being a role model for the teams below are focus areas on a top-down approach which enable building of a deeper learning focused momentum.

The Company has been undertaking several measures to keep its employees safe, engaged, and productive.

Environment Health and Safety

The Company is invested in creating resilient occupational safety and health systems by drawing on past experiences and learning. The Company is now certified both for ISO 45001:2018 & ISO 9001:2015 for its Health Safety & Environmental Management system at par with global practices.

The Company has always endeavoured to harmonise health and safety at its workplaces with that of the surrounding habitat. The managements prompt efforts ensured zero loss of business due to the pandemic across sites worldwide.

Internal Controls and Their Adequacy.

Internal Financial Controls are an integrated part of the risk management process, addressing financial risks and financial reporting risks. The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

An extensive program of internal audits and management reviews supplement the process of internal financial control framework. Documented policies, guidelines and procedures are in place for effective management of internal financial controls. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively considering the nature of our industry and are operating as intended.

The Audit Committee comprises of professionally qualified Directors, who interact with the Statutory Auditors, Internal Auditors, and management in dealing with matters within its terms of reference. The Audit Committee reviews the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Companys risk management policies and systems.


The statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be forward-looking statements within the meaning applicable to securities laws and regulations.

Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand or supply and price conditions in the domestic and overseas markets, changes in the Government regulations, tax laws and other statutes and other incidental facto.