Diwali to Diwali -3

▪ At present, India loses around 30% of its power generated due to transmission, distribution, billing generation and collection inefficiencies

▪ Theft is the one of the main causes of the high losses. Theft occurs in several ways, viz: by tapping power lines and tempering / by-passing meter etc

▪ Meters play a vital role in reduction of AT&C Losses – Replacement of defective meters by tamper proof electronic meters / smart meters – AMI / Smart metering to the consumer for reduction of commercial losses and billing and collection ease

▪ Smart meter has the following capabilities: – Smart Meters and AMI Meters have communication capability – It can register real time or near real time consumption of electricity or export both. – Read the meter both locally or remotely – Remote connection or disconnection of electricity – Remote communication facilities through GSM / GPRS / RF etc

Here comes the company which tackles the problem head on and manufacture smart meters

Genus Power

CMP 223

Stock PE 71, ROCE, ROE <10%, Debt to equity < 0.3 (based on screener)

Also Read Pick1, Pick2

➡️It is engaged in manufacturing and providing Metering and Metering Solutions and undertaking ‘Engineering, Construction, and Contracts’ on a turnkey basis

➡️In 1996 it pioneered unique tamper-proof single & three-phase electronic energy meters in India.

➡️1st company in India to obtain various certifications like DLMS certification for Energy Meters, BIS certification for Smart Meters, etc.

➡️Current Order book is massive 19K crore –many order they have won recently

➡️Many State Electricity Boards (SEBs) have initiated the process of inviting bids for the deployment of smart meters under RDSS scheme

➡️In May 2023, the company has signed a commitment letter with United States International Development Finance Corporation (“DFC”) to obtain a Loan up to USD 49.5 million to scale up the deployment of electric smart meters.

➡️Company expects a substantial recovery in revenue from Q3FY24 onwards on back of our robust orderbook and consistent order inflow, further bolstered by the normalisation of the supply chain

➡️GIC Affiliate and Genus Power Infrastructures Limited to set up a Platform to fund Smart Metering projects

o Company signed definitive agreements with Gem View Investment Pte Ltd, an affiliate of GIC, Singapore (“GIC”) for setting up of a Platform for undertaking Advanced Metering Infrastructure Service Provider (“AMISP”) concessions

o Genus Power would be the exclusive supplier to the Platform for smart meters and associated services

➡️Largest player in India’s electricity meter industry ~27% market share in Meter Industry

~70% market share in Smart Meters

➡️Annual Production capacity of 10 mn+ meters

➡️Empanelled with 40+ different utilities across the country

➡️Only Indian company to receive BIS certification for Smart Gas Meters

➡️CMMI level 3 Company Accredited with – ISI, KEMA, SGS, STS, ZIGBEE, UL, DLMS etc., which is amongst the highest in Indian Metering Solutions Industry

➡️Big and reputed clientele

➡️In-House NABL Accredited Electronic Energy Meter Testing Laboratories

GOVERNMENT INVESTMENT

The government is planning to invest up to $21 billion till 2025 in smart grid technologies

The smart cities initiative is targeting 100+ cities in India, out of which 20 have been declared

More than 14 smart grid pilots have been launched in cities across India, to push smart solutions in Power Generation & Distribution Industry

Risks

➡️Fairly valued to bit overvalued until Earnings kick in

➡️Increase in employee cost and other expenses, as expanding workforce and enhancing systems in preparation for the execution of the substantial orderbook

➡️Significant increase in financing costs as a result of the company’s obligation to provide new bank guarantees to secure the massive order inflow

➡️Delay in execution of existing orders received by a quarter or two

➡️New order tenders getting delayed

➡️Change in policies

➡️Increase in RM costs

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