Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Genus Power Infrastructures Ltd (BOM:530343, Financial) reported a significant revenue increase of 88% to INR487 Crores compared to the previous year.
- EBITDA for Q2 rose by 232% to INR81 Crores, with margins improving by 724 basis points to 16.7%, driven by operating leverage.
- The company recorded a PAT of INR58 Crores, more than five times the previous year's figure, including a one-time gain from an arbitration settlement.
- A robust order book of INR31,007 Crores positions the company for sustained growth, with full-scale execution expected to accelerate from Q3 FY25.
- Genus Power Infrastructures Ltd is exploring new opportunities in gas and water metering markets, both domestically and internationally, indicating potential future growth avenues.
Negative Points
- Employee expenses are expected to continue growing over the next 6 to 8 months due to increased execution and development work.
- The company faces challenges in managing high trade receivables, which are more than half of the half-yearly sales, impacting cash flow.
- There is uncertainty regarding the exact future employee cost figures, which could affect financial planning.
- The company has seen a reduction in promoter shareholding, with a 3% stake sold to Namura, which might concern some investors.
- Execution challenges in smart meter installations due to consumer resistance and policy issues could impact project timelines.
Q & A Highlights
Q: Can you provide insights on the expected growth in employee expenses for FY25 and FY26?
A: Employee expenses are expected to grow over the next 6 to 8 months due to increased execution and development work. However, a specific number cannot be provided at this time. (Kailash Agarwal, Vice Chairman)
Q: What is the outlook for the order book in the second half of FY25 and beyond?
A: The order book is not expected to increase significantly in the next 6 to 8 months as there are no live tenders currently. However, 40% of the market is still untapped, and tenders are expected to start from Q1 of the next financial year. (Kailash Agarwal, Vice Chairman)
Q: Can you explain the high trade receivables and the impact on cash flow?
A: High trade receivables are due to the initial capital outlay required for projects, which take 6 to 9 months to normalize. Once projects go live, cash flow and working capital are expected to improve. (Kailash Agarwal, Vice Chairman)
Q: What is the status of the expansion plan for smart meter production capacity?
A: The expansion plan is on track, with the new plant expected to be fully operational in the next month. The company will be capable of manufacturing 1 million meters monthly from Q4 onwards. (Kailash Agarwal, Vice Chairman)
Q: How is the company addressing the challenges in smart meter installation and consumer acceptance?
A: There is a strong drive from the government to promote smart meters, and consumer acceptance is gradually increasing. The company is working to educate consumers about the benefits of smart meters. (Kailash Agarwal, Vice Chairman)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
