report by: arnab dasgupta arnab@dynamiclevels€¦ · · 2018-01-16report by: arnab dasgupta –...
TRANSCRIPT
Report By: Arnab Dasgupta – [email protected]
Page 2 Source: Company, www.dynamiclevels.com
Genus Power- Energizing Lives
Company Overview and Stock price ……………………………………….……3
Product Overview……………………………………………………………….….…..4
Energy Conservation and Technology Absorption………………………….7
Industry outlook…………….…………………………………………….……..……..8
Competitive edge of Genus and Future Outlook………..……………......10
Company Financials…………………………………………………………………..11
Peer Comparison…………………………………………………..………………….15
Share holding pattern………………………………………………………………..15
UDAY :A game changer for Genus, in the coming era……….......…....16
Investment Rationale………………………………………...………….......…....17
Page 3 Source: Company, www.dynamiclevels.com
Company’s Overview and Stock Price
Genus Power Infrastructures Limited, an ISO 9001 & 14001 certified company is an integral part of the US $400 million Kailash group. Pioneer in Smart Metering Solutions and ECC turnkey projects, Genus is equipped with avant- grade manufacturing facilities, complete forward and backward integration from plastic parts to final products, automated SMT lines, Lean Assembly techniques and a team of highly qualified and experienced engineers, Genus is committed to develop innovative and customized solution at an affordable price. Genus top-notch R&D Center, recognized by the ministry of Science and Technology, Govt. of India, has enabled it to dominate the power infrastructure and be at the forefront of new technology. Genus is a proud CMMI level 3 Company, accredited with various national and international certifications such as ISI, KEMA SABS, STS, ZIGBEE, UL and more.
EXCHANGE SYMBOL GENUS POWER
Current Price * (Rs.) 47.25
Face Value (Rs.) 1.00
52 Week High (Rs.) 62.45 (12-Jan-16)
52 Week Low (Rs.) 21.50 (16-Jun-15)
Life Time high (Rs.) 95.00 (03-Jan-08)
Life Time low (Rs.) 6.21 (12-Mar-09)
Average Daily Movement 2.57
Average Volume [20 days] 359976
1 Month Return (%) -16.01
P/E Ratio (x) 15.14
Book Value 22.03
Market Cap 1191.59 (Cr)
% of Promoter holding pledged 0
Chart Hypothesis: Above is the 1 year weekly chart of Genus Power, which shows that it has
given correction from the recent high of Rs.60 and currently trading at a support level of
Rs.46.
Page 4 Source: Company, www.dynamiclevels.com
Product Overview
Metering Solution
Smart Meters: With an installation base of over 30
million meters, Genus is a market leader in modern
energy metering solutions. Genus offers a wide range
of customizable products and services for utilities as
well as specialized products for power trading
companies, industries and housing communities.
Prepayment Meters: The Genus-Agrim™ Pre Payment
Energy Metering Solution is a flexible and secure
revenue management solution for electricity
Distribution Companies. It is offered in accordance
with the internationally recognized STS standard which
provides meter inter-operability with vending stations
of other makes. The solution automates and simplifies
advance revenue collection, demand management and
remote two way communication.
Genus has two business divisions offering highly innovative and sustainable solutions to the power sector.
The Metering Solution Division provides a complete range of Electricity Meters such as Multi-Functional Single Phase
and Three Phase Meters, CT Operated Meters, ABT & Grid Meters, DT Meters, Pre-Payment Meters, Smart Meters,
AMI, MDAS etc.
The Engineering Construction and Contracts Division undertakes Turnkey power projects such as Sub-Station erection
upto 420kV, Laying up of transmission & distribution lines, Rural Electrification, Switchyard, Network Refurbishment
etc.
Page 5 Source: Company, www.dynamiclevels.com
Single Phase Meters: 1 phase, 2 wire, class 1, whole
current, Tamper proof, Time of use, Static Electricity
meter conforming to IEC – 62053 – 21/23, IEC – 62054
and IS 13779. Designed for MTBF 200 years.
Three Phase Meters: A 3 phase, 4 wire, class 1, whole
current (10-100A), Time of Use, static Electricity meter
conforming to IEC-62053-21/23 and IEC-62054. Dual
processor Environment with a processor dedicated to
metrology & computation and the other for
communication & calculations. Designed for MTBF
better than 250 Years.
Group Meters: Genus Smart group Metering Solution
is an innovation for Group Housing Apartments &
clustered Areas. The Metering Solution is an
integration of 12Nos of Single Phase Individual DIN-rail
mounted meter with residential/ Remote Enabled
Display Unit (REDU) unique to each meter, Data
Collector unit, Relay Switches & GSM/GPRS module.
Wall/Pole mounting arrangement of Metering unit and
Energy display unit at Consumer premises makes it
tamperproof and cost effective solution for AMR.
Meter Test Equipment: Genus AchookTM - 1080/3080
is a portable Reference Standard Meter available for
both Single Phase & Three Phase Energy Meter Testing.
It measures the power system parameters and verifies
the accuracy of Single Phase & Three Phase Electronic
Energy Meters in laboratory as well as 'on site' testing
conditions. The use of Clamp-on CT facilities to verify &
record the accuracy of energy measurement of
Installed Meters in the field without disconnecting
them.
Page 6 Source: Company, www.dynamiclevels.com
Meter Reading Instruments: Genus Samvaad is a
microprocessor based high speed Hand Held Unit for
Data Downloading from Electricity Meter both rometly
& locally. The device is available with different
communicating topologies i.e. Optical Communication
(RS-232), Infra Red, IrDA, LPRF. Internal memory
storage can store all Data, Load Survey & other
Tamper/Event of Meter for uploading at base station
computer software Genus URJATM for Meter data
analysis. Being rechargeable battery operated device,
it can communicate with local computer/laptop using
RS-232 (D-9pin) port.
Engineering Construction and Contracts Switchyard / Sub-stations: Genus has undertaken
projects on total turnkey basis for establishing Grid
Sub-Stations up to 220kV and capable of executing
projects up to 420kV. Following services are on offer:
New Sub-stations
Capacity augmentation
Renovation & modernization of existing
substations
Laying of associated Transmission lines
Laying of associated Under-ground cables
Transmission Lines: Genus has undertaken projects on
total turnkey basis for transmission lines up to 220kV
and capable of executing projects up to 420kV.
Following services are on offer:
Engineering, Procurement, Erection, Testing
and commissioning Transmission lines up to
420KV
Laying of under-ground cables
Re-Conductoring & Capacity enhancement of
existing transmission lines
Distribution Lines & HVDS: Genus has completed more
than 9,000 kilometer of HT lines & 25,000 kilometers
of LT lines with ACSR conductors as well Ariel bunched
cables in rural & urban areas. Following services are on
offer:
Pole mounted transformers
11,22 and 33 KV distribution lines
Re-Conductering of old lines
Arial bunched conductor on different type of
supports, erection and renovation
Load balancing, bifurcation of existing feeders
Single Phasing work
Process Industry Plant Electrification: Genus is capable
to undertake complete electrification of process plants
such as Paper Mill, Sugar Mill, Bio-mass generation
plants etc. The services on offer include following:
Conceptualize, Design, Engineering
Procurement, Erection, Testing and
commissioning
Sub-Station in co-ordination with local utility
Associated Transmission / distribution line to
supply / evacuate power
HT/LT distribution of power inside the plant
Load centers
Area Lighting
Street Lighting
Rural Electrification: Genus has completed
electrification of more than 10,000 villages in and still
counting in variety of terrains and difficult
geographies. Following services are on offer:
Pole mounted transformers
11,22 and 33 KV distribution lines
Page 7 Source: Company, www.dynamiclevels.com
Energy Conservation and
Technology Absorption
Steps taken or impact on conservation of energy: Though the Company is enchanted to see reduction in electricity uses, the management considers it necessary to make constant efforts by using new/improved solutions to save energy everywhere to the possible extent. The Company continues its efforts to reduce and ameliorate the use of energy consumption at its all offices and at its manufacturing facilities by installing hi-tech energy monitoring and conservation systems to monitor usage, minimize wastage and boost overall efficiency at every stage of power consumption. The Company has taken the following steps in this direction:
Installation of new LED lightning having load of 20KW as compared to conventional lightning which takes approx 40 KW.
Installation of AC frequency drive in SM 350T, 250T, 210T & 150T injection moulding machines.
Insulation of heating barrel of moulding machine.
Examined the plant frequently when not in operation to recognize energy squander and taken preventive measures.
A reviewed plant consistently to analyze the fidelity of procedures established for energy power cut, and periodically inspects these plant managers and employees.
Executed a regular lighting upkeep program.
1. Steps taken by company for utilizing alternate sources of energy :
Installation of 3 KW solar panel for water lifting.
Accentuating to utilize the maximum natural sources of energy instead of using electricity.
2. Technology Absorption :
Developed linux based common meter reading instrument.
Developed Single Phase Net Metering Solution for Solar Energy.
Developed Three Phase Net Metering Solution for Solar Energy.
Developed Zigbee based AMI Metering Solution.
Developed Energy Management solution for Building Management.
Developed Single Phase and Three Phase PPEM with FSK PLC split type with CIU.
Developed AMR Metering Solution for telecom towers.
Developed DC Meters for Telecom towers.
Upgraded ‘SAMPOORNA’ Thread – through DT Meters as per the latest ant – tamper and value added features.
Upgraded Single Phase 10-60A Meter as per the latest anti-tamper and value added features.
Upgraded Three Phase 10-60A Meter as per the latest anti-tamper and value added features.
Developed Smart solution for On-line Pre Payment Metering.
3. The benefits derived like product improvement, cost reduction, product development or import substitution :
Successfully deployed POC at Uttar Gujarat Vij Company Ltd. (Gujarat), Himachal Pradesh State Electricity Board (Himachal Pradesh) and Chhattisgarh State Power Distribution Company Limited. (Chhattisgarh) for AMI Solution under Ministry of Power Smart Grid Pilot Project Mission.
Awarded with India’s first order for AMI solution deployment from Himachal Pradesh State Electricity Board.
Successfully deployed Three Phase Smart Metering Solution at CESC Kolkata.
Successfully supplied Genus Make Linux based CMRI.
Page 8 Source: Company, www.dynamiclevels.com
Industry Outlook Power Sector – Overview and Outlook: A competent and financially viable power sector is essential for growth of a nation. The availability of quality, reliable and affordable electricity is necessary for rapid socio-economic growth of the nation. In the recent past, the Indian power sector has witnessed significant progress. The Gol’s is focused to achieve “Power For All” has accelerated the growth in this sector. During the previous year the overall power generation has been increased significantly. The huge capacity addition coupled with higher power generation and improved transmission capacity has resulted in reducing the power shortage during the last 2 to 3 years. The Central Electricity Authority (CEA) of India has projected a base load energy shortage and peak shortage to 2.1% and 2.6% respectively, in 2015-16. However as the Indian economy is on the sustained growth path, energy consumption in the country will continue to rise. India need smart and proactive approaches to meet the future demand of electricity as constant availability of the electricity would play a vital role in both fighting poverty and achieving the target of inclusive growth. The Indian power sector has been a hotbed of activity since the NDA government took over the reins two years ago. From providing a lifeline to the ailing state-owned power distribution utilities (discoms) in the form of UDAY (Ujwal DISCOM Assurance Yojana) to ramping up the country’s traditionally neglected transmission network to boosting domestic coal supply, providing subsidized gas to stranded fuel-starved plants and introducing e-auctions for short-term power purchases by discoms, many initiatives have been introduced. Power Transmission and Distribution Sector: After addressing the issue of power deficit, the government’s focus is now more on Transmission and Distribution (T&D) sector. India has set very ambitious targets for transmission sector in 12th and 13th Five year plans. During the 12th plan, around 1,10,000 ckt.
Page 9 Source: Company, www.dynamiclevels.com
Km of transmission lines, 2,70,000 MVA of alternating current (AC) substation capacity and 12,750 MW of HDVC capacity will be added. During the 13th paln around 62,800 ckt.Km of transmission lines and 1,28,000 MVA of AC substation capacity and 15,000 MW of HDVC capacity will be added. The gol has set a target of reducing India’s Transmission and Commercial (ATC) losses to 17.1% by 2017 and to 14.1% by 2022. India’s Power T&D networks represent the critical arteries of the entire power supply value chain. The growth of power sector is clearly dependent to development of a robust and reliable T&D network. Despite attaining focus from the policy makers, India’s T&D sector remains under stress and T&D industry continues to face a number of issues such as delay in statutory clearances for commissioning of projects and sluggish redressal systems, no guidelines on use of technology and the focus for lowest price in competitive bidding, inadequate pre bid due diligence of inexperienced players and financial disability of power distribution agencies to upgrade the outdated and faulty systems due to high T&D losses. High T&D losses are mainly caused by poor and non performing infrastructure, illegal tapping of lines and faulty electric meters that undervalues actual utilization of electricity and also lead to reduce payment collection. As per the report the discoms posted around 25% AT&C losses in 2012 – 13, which is still very high. Moreover, the actual AT&C losses of discoms might be higher than official estimates as a large number of consumers still remain unmetered and their information is not available for calculation. Hence, there is an urgent need to timely address the issues of T&D sector to ensure power demand is effectively met in the future. Taking the above, Government of India has taken several positive initiatives through a range of schemes and programs to improve the T&D sector. Energy Metering Industry – Review and Outlook: Energy Metering is the backbone of the power distribution channel, which is the most critical and the only revenue generation link in the entire power supply value chain. It holds more significance in Indian context, given that the distribution sector suffers from
aggregate technical and commercial (AT&C) losses of around 25%. Electricity theft costs the Indian Power Sector around $16.02 billion per year, which is very high as compared to other countries. In India’s current power situation smart metering system is very essential in reducing AT&C looses through accurate monitoring and billing, and thereby improving revenue collection efficiency of power Discoms. It is considered as an automated process key to AT&C losses reduction. In the past few years, metering industry has been revolutionary changes, where advanced technologies have fast replaced the conventional ones. Most power utilities in India have replaced their electromechanical meters with electronic meters. These electronic energy meters are accurate, fast, tamper proof and secure instruments as compared to conventional meters. This technology advancement is giving a fillip to revenue collection efficiency of power utilities mainly by reducing instances of tampering and by correct billing.
Page 10 Source: Company, www.dynamiclevels.com
Competitive edge of Genus Power and Future Outlook
For, over two decades Genus backed the growth of the Indian Metering Industry with installation of around 31 million electronic energy meters across the country.
Genus, with a commitment of continuous value addition through its world class in house Research and Development Centre provides a best series of smart metering solutions to the power distribution sector of India.
Genus has successfully developed Net Meters for solar energy sector and has started selling of these meters to selective users and grid-tied project developers.
In 2014-15, Genus has touched new milestone in production and sale of metering solutions. During this financial year, Genus has produced around 5.26 million meters and installed around 4.90 million meters.
Genus to grab the emerging market opportunities and with an aim to contribute toward “Make in India” drive is aggressively magnifying the areas of operation, technology domains and execution capabilities.
Esteemed Clients
Page 11 Source: Company, www.dynamiclevels.com
Company Financials
Income Statements (In Cr)
Mar'16 Mar'15 Growth %
Annual Annual
Net Sales/Income from operations 857.65 915 -6.27%
Other Operating Income 2.11 1.01
Total Income From Operations 859.76 916
Increase/Decrease in Stocks 15.72 -46.83
Consumption of Raw Materials 548.31 663.53 -17.36%
Employees Cost 65.39 65.24 0.23%
Depreciation 13.99 16.09
Other Expenses 103.96 110.27
Total Expenditure 747.37 808.3 -7.54%
Operating Profit 112.39 107.7 4.35%
Other Income 12.03 11.36
P/L Before Int., Excpt. Items & Tax 124.42 119.06
Interest 28.88 33.24 -13.12%
P/L Before Exceptional Items & Tax 95.54 85.82
Exceptional Item 2.36 -17.44
P/L Before Tax 97.9 68.39
Tax 19.45 17.17
P/L After Tax from Ordinary Activities 78.45 51.22 53.16%
Extra Ordinary Items -- 1.9
PAT 78.45 53.12 47.68%
Equity Share Capital 25.68 25.67
Reserves 633.86 461.59
EPS (Rs.) [Before Extraordinary items] 3.06 2 53.00%
In spite of fall in Top line by 6.27% annually company through its efficient management and better economies
of scales showed jump in Net Profit by 53.16% annually.
Raw material cost came down by 17.36%
Interest cost came down by 13.12%
Unlike last year company does not had any big exceptional Item for current year.
Operating profit margin 13.11% for current year.
Net Profit margin for current year is 9.14%
EPS 3.06 vs 2.00 for 2016 and 2015 respectively
Page 12 Source: Company, www.dynamiclevels.com
Balance Sheet (In Mn) Mar’16 Mar’15 Mar’14 Mar’13 Mar’12
Total Current Assets 7,199 6,957 5,769 5,833 6,610
Cash & Near Cash Items 619 257 95 39 46
Short Term Investments 1,010 667 915 251 223
Accounts & Notes Receivable 4,146 3,996 3,443 3,612 4,353
Inventories 1,176 1,560 866 970 902
Other Current Assets 249 478 450 961 1,087
Total Long-Term Assets 3,564 3,534 3,051 3,482 3,008
Long Term Investments 1,773 475 515 175 76
Gross Fixed Assets 1,883 1,678 1,538 1,338
Accumulated Depreciation 582 503 401 329
Net Fixed Assets 1,404 1,301 1,175 1,137 1,009
Other Long Term Assets 386 1,758 1,360 2,171 1,923
Total Current Liabilities 3,911 5,192 3,932 3,827 4,559
Accounts Payable 1,105 1,254 868 910 1,225
Short Term Borrowings 2,153 3,437 2,851 2,552 3,013
Other Short Term Liabilities 653 502 213 365 322
Total Long Term Liabilities 257 426 550 609 603
Long Term Borrowings 13 169 259 302 221
Other Long Term Borrowings 244 257 291 308 382
Total Liabilities 4,168 5,618 4,482 4,436 5,162
Long Preferred Equity 0 0 0 0 0
Minority Interest 0 0 0 0 0
Share Capital & APIC 257 1,068 1,068 1,808 1,808
Retained Earnings & Other Equity 6,339 3,804 3,269 3,072 2,648
Total Share holders’ Equity 6,595 4,873 4,338 4,879 4,456
Total Liabilities & Equity 10,763 10,490 8,820 9,316 9,618
Book Value Per Share 26 19 17 31 28
Company reduced its long term borrowing by 39.67% from Rs. 42.60 crores to 25.70 crores.
Company has not made any huge investment for new asset during the year.
Company’s cash and cash equivalent has increased by 140% from Rs. 25.70 crores to Rs. 61.90
crores.
Page 13 Source: Company, www.dynamiclevels.com
Cash Flow (in mn)
Periodicity: Mar’15 Mar’14 Mar’13 Mar’12
Net Income 531 605 446 661
Depreciation & Amortization 161 106 89 77
Other Non-Cash Adjustments 555 -13 -48 -274
Changes in Non-Cash Capital -1,545 -219 388 -578
Cash From Operating Activities -298 478 874 -114
Disposal of Fixed Assets 5 2 2 2
Capital Expenditures -203 -155 -238 -237
Increase in Investments -84 -221 -216 -31
Decrease in Investments 61 10
Other Investing Activities -25 0 0 0
Cash From Investing Activities -245 -375 -451 -256
Dividends Paid -30 -19 -19 -19
Change in Short Term Borrowings 567 281 -475 -8
Increase in Long Term Borrowings 0 0 81 231
Decrease in Long Term Borrowings -84 -63
Increase in Capital Stocks 0 0 0 100
Decrease in Capital Stocks 0 0
Other Financing Activities 3 4 11 12
Cash From Financing Activities 456 202 -402 316
Net Changes in Cash -87 306 21 -54
Free Cash Flow (CFO-CAPEX) -501 324 637 -351
Free Cash Flow To Firm -316 584 962
Free Cash Flow To Equity -13 543 245 -126
Free Cash Flow per Share -1.95 1.73 4.01 -2.24
Page 14 Source: Company, www.dynamiclevels.com
Ratios
Valuation Ratios
Mar’16 Mar’15 Mar’14 Mar’13
P/E 17.3x 12.2x 3.3x 4.2x
EV/EBIT 12.5x 8.1x 5.1x 7.0x
EV/EBITDA 11.2x 7.1x 4.6x 6.1x
P/S 1.6x 0.7x 0.3x 0.3x
P/B 2.1x 1.3x 0.6x 0.4x
Div Yield - 82.10% 92.20% 87.00%
Profitability Ratios
Mar’16 Mar’15 Mar’14 Mar’13
Gross Margin - - - -
EBITDA Margin 14.7 13.8 13.8 11
Operating Margin 13.1 12.1 12.4 9.7
Profit Margin 9.1 5.8 7.9 6.8
Return on Assets 7.4 5.5 6.7 4.7
Return on Equity 13.7 11.5 13.1 9.5
Leverage and Coverage Ratios
Mar’16 Mar’15 Mar’14 Mar’13
Current Ratio 1.8 1.3 1.5 1.5
Quick Ratio 1.5 0.9 1.1 1
EBIT/Interest 3.9 4.4 3.6 1.8
Tot Debt/Capital 0.2 0.4 0.4 0.4
Tot Debt/Equity 0.3 0.7 0.7 0.6
Eff Tax Rate % 19.9 25.8 1.4 4.9
Page 15 Source: Company, www.dynamiclevels.com
PEER Comparison
Company Name: GENUS POWER INFR
CENTUM ELEC LTD
MIC ELECTRONICS
BHARAT ELECTRON
Latest Fiscal Year: 03/2016 03/2016 03/2016 03/2016
52-Week High 62.45 929.95 29.50 1,416.85
52-Week High Date 1/12/2016 8/7/2015 7/10/2015 1/4/2016
52-Week Low 21.50 450.10 11.65 984.00
52-Week Low Date 6/16/2015 2/15/2016 6/8/2015 8/25/2015
Daily Volume 115,231 3,900 444,969 277,239
Current Price: 47.25 480.45 13.10 1,217.35
52-Week High % Change -21.9% -48.1% -54.2% -14.9%
52-Week Low % Change 127.0% 7.2% 23.3% 22.6%
Market Capitalization 12,532.2 6,106.4 2,242.9 289,452.0
Total Debt 2,165.4 814.2 1,610.3 286.4
Minority Interest - 302.1 - 47.6
Cash and Equivalents 1,628.7 632.1 5.6 75,528.9
Current Enterprise Value 13,068.9 6,590.6 3,847.6 214,257.1
Shareholding Pattern Shareholding Pattern Mar’16 Dec’15 Sep’15 Jun’15 Mar’15
Promoter and Promoter Group %) 50.58 50.58 50.58 50.58 50.61
Indian 50.58 50.58 50.58 50.58 50.61
Foreign NIL NIL NIL NIL NIL
Institutions (%) 5.41 0.55 0.39 0.44 0.25
FII 0.57 0.37 0.03 0.07 0.19
DII 4.84 0.18 0.36 0.37 0.06
Non Institutions (%) 44.01 48.87 49.02 48.98 49.15
Bodies Corporate NIL NIL 8.85 8.31 8.67
Others 44.01 48.87 40.18 40.66 40.47
Custodians NIL NIL NIL NIL NIL
Total no. of shares (cr.) 25.68 25.68 25.68 25.68 25.67
Page 16 Source: Company, www.dynamiclevels.com
Ujwal DISCOM Assurance Yojana (UDAY) –A game changer for Genus, in the coming
era: UDAY is the financial turnaround and revival package for electricity distribution companies of India (DISCOMs).DISCOMs in the country have accumulated losses of approximately Rs. 3.8 lakh crore and outstanding debt of approximately Rs. 4.3 lakh crore (as on March, 2015). Financially stressed DISCOMs are not able to supply adequate power at affordable rates, which hampers quality of life and overall economic growth and development. Initiated by the Government of India with the intent to find a permanent solution to the financial mess that the power distribution is inGoI has proposed to revive/restructure discoms’ financial health for the third time through Ujjwal Discom Assurance Yojna (UDAY), with an outlay of USD 7 bn. The earlier two bailouts have failed miserably with losses of discoms amounting to Rs 3.8 tn.
UDAY has 3 elements.
clears up the legacy issues of past losses and debt - Under UDAY, state governments are being asked to take over 75% of the debt of the discoms over two years - 50% in 2015-16 and 25% in 2016-17. The balance 25% of the debt will be converted into loans or bonds at concessional interest rates. Collectively discoms owe Rs 5.5 tn to banks;
provides a financial road map to bring tariffs in line with costs by FY19; and
provides enough deterrents for the state government to not allow the state discoms to become loss ridden, post FY18, as losses start to impact their fiscal responsibility and budget management (FRBM) limits.
The scheme comprises 4 major initiatives i.e.
improving operational efficiencies of discoms (through strict discipline of quarterly fuel cost adjustment, annual tariff increase, taking regulators on board and finally including discom losses in the FRBM limits for the states);
reduction of cost of power (through coal swapping);
reduction in interest cost of discoms (through low interest rates); and
enforcing financial discipline on discoms through alignment with state finances.
UDAY is a step in the right direction which has potential to unclog the entire power chain. Genus has 20% market share in the electronic meter’s market is set to be a major beneficiary of this scheme. Smart metering solutions offered by Genus precisely tackles the issues of discoms through its unique features such as tamper-proof design & packaging, AMR techniques, accurate billing, auditing, meter data analysis, outage etc. With extensive experience and state-of-the-art indigenous technology in smart metering solutions.
Page 17 Source: Company, www.dynamiclevels.com
Investment Rationale
The company is in the leading position in India’s electronic meter industry.
Genus Power has been providing one-step advanced solutions of energy metering to Indian Power distribution
utility for over two decades.
The Company aim to contribute towards “Make in India” project of government.
Genus is firmly ready to entrench itself as ‘Technology Leader’ and ‘Market Leader’ in providing the turnkey ECC
solution for the power T&D sector.
The stock is trading at a low PE ratio of 15.22 with Book Value 22.03 and Market Capitalization of 1195.44(Cr).
The Company is continuously decreasing its long term borrowing in YoY basis.
Smart metering solutions offered by Genus tackles the pain points of distribution utilities through its unique
features such as tamperproof design & packaging, automated meter reading (AMR) techniques, accurate billing,
auditing, meter data analysis, outage, etc. With extensive experience and state-of-the-art indigenous technology,
Genus helps power utilities in shrinking their T&D losses and enhance revenues and is at the forefront of power
infrastructure.
India plans to spend USD 21.6 bn in development of smart grid technology during 2015-25 and ~130 mn smart
meters are expected to be installed during this period.
Meter business is expected to grow with a CAGR of 14% during FY15-18E and margins to stabilize.
If UDAY is implemented as planned, then Genus, which has 20% market share in electronic metering market, will
be a direct beneficiary
We recommend BUY in Genus Power @ 46-48, TARGET 60 as Genus Power is in the leading position in India’s electronic meter industry trading at a low PE of 12 and If UDAY is implemented as planned, then Genus, which has 20% market share in electronic metering market, will be a direct beneficiary
Page 18 Source: Company, www.dynamiclevels.com
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DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation from the subject company in the past twelve months? No
DYANMIC/its Associates/ Research Analyst/ his Relative have managed or co-managed public offering of securities for the subject company in the past twelve months? No
DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months? No
DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months? No
DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation or other benefits from the Subject Company or third party in connection with the research report? No
DYANMIC/its Associates/ Research Analyst/ his Relative have served as an officer, director or employee of the subject company? No
DYANMIC/its Associates/ Research Analyst/ his Relative have been engaged in market making activity for the subject company? No
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