Genus Power Infrastructures Ltd. expects multifold growth in earnings from fiscal 2025, according to Jitendra Kumar Agarwal, joint managing director at the electricity meter manufacturing firm.
The company recently announced that Singapore’s sovereign wealth fund, GIC, agreed to buy a 74% stake in its new smart metering solutions venture for $2 billion.
GIC's affiliate, Gem View Investment, will hold a 74% stake in the platform, while the remaining 26% shareholding will be with Genus Power.
The company's stock has risen as much as 31% since Wednesday.
Collaboration With Gem View Investment
The collaboration between Genus Power and Gem View Investment comes against the backdrop of the government's push to implement the National Smart Metering Project under the Revamped Distribution Sector Scheme.
The government aims to install 25 crore meters by 2025, with an estimated investment of $30 billion, to address the more than 15% loss that major Indian utilities experienced and enhance the operational efficiency of distribution companies.
Scope Of The New Platform
Genus Power and Gem View Investment have jointly established a platform to undertake the Advanced Metering Infrastructure Service Provider projects, Agarwal said.
The platform will act as the primary bidder for AMISP projects from state electricity boards, with Genus Power executing the secured orders as the platform's exclusive system integrator partner.
Approximately 60% of the order value will be paid to Genus Power for project implementation, with the remaining amount being distributed according to the platform's shareholding pattern, Agarwal said.
The company has already bagged an order worth Rs 2,207.53 crore for the appointment of AMISP.
Funding The Platform
The funding for the project will be contributed by both parties in proportion to their shareholding, Agarwal said. As such, Genus Power's initial investment will be capped at $211 million and the funding will be done through debt, he said.
Formalities related to establishing the platform are expected to be completed within the next 45 days.
Genus Power aims to install 3 crore meters in the next 3–4 years, Agarwal said. "We have a manufacturing capacity of more than 10 million meters annually, which can be easily enhanced to 15-20 million with minimal capex."
The necessary project groundwork typically spans six to nine months, after which the inflows kick in, Agarwal said. Revenue generation will commence during the second half of FY24, with the recently secured order falling under the purview of the new platform, he said.
The Road Ahead
The company has a revenue guidance of Rs 1,200–1,400 crore for FY24, Agarwal said. He expects Ebitda margin to improve from 9.7% registered in FY23.
Genus Power's primary focus has been on electricity measurement, and it has also expanded into the gas measurement space. It intends to explore the water measurement sector in the future, Agarwal said.
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