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Genus Power Infrastructures Ltd
Earnings Call Analysis
Q3-2024 Analysis
Genus Power Infrastructures Ltd
Investors were welcomed to the Genus Power Infrastructures Limited Q3 FY'24 earnings call, where forward-looking statements were anticipated, highlighting the company's expectations for future performance, accompanied by the usual caveats of risks and uncertainties.
Genus Power has seen substantial success, securing orders amounting to approximately INR 16,185 crores for the installation of around 1.82 crores smart prepaid meters since July 2023. The quarter witnessed an inflow of INR 9,522 crores in orders. This robust order book, exceeding INR 20,000 crores, promises a positive revenue trajectory. However, execution will only begin after 6 to 9 months from ordering, accounting for necessary formalities such as approvals and negotiations.
Genus Power is preparing for order fulfillment, with an execution cycle spanning 27 to 30 months, providing clear visibility into revenue growth, particularly in FY'25 and FY'26. The company has formed a strategic partnership with GIC to innovate and drive efficiency. This quarter, revenues rose to INR 258.3 crores, a 28.9% increase year-on-year, with an EBITDA increase of 33% to INR 27.2 crores. Profit after tax grew by 16.1% to INR 13.5 crores, despite a rise in financial expenses due to additional bank guarantees. Genus Power forecasts a revenue surge starting FY'25, with estimated revenues of about INR 2,500 crores and improved operating profit margins, positioning the company as a dominant force in the Indian Electricity Metering Industry.
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Ladies and gentlemen, good day, and welcome to the Genus Power Infrastructures Limited Q3 FY '24 Earnings Conference Call.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
[Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Kailash Agarwal, Vice Chairman of Genus Power Infrastructures Limited. Thank you, and over to you, sir.
Good evening, ladies and gentlemen. A very warm welcome to the Q3 FY '24 Earnings Call of Genus Power Infrastructures Limited. Along with me on this call is Mr. Jitendra Agarwal, Joint Managing Director of Genus Power; and SGA, our Investor Relations Advisors.
The results and investor presentation are uploaded on the stock exchange and company website. I hope everybody has a chance to look at it. Since July 2023, our company has consistently achieved remarkable success by securing SEBs of 7 prestigious orders. The orders aggregating to approximately INR 16,185 crores net of taxes are for the installation of approximately 1.82 crores smart prepaid meters.
In Q3 FY '24, we had a total order inflow of around INR 9,522 crores net of taxes. The trust and confidence demonstrated by our client is a strong treatment -- testament to the dependability of our cutting-edge smart metering solutions. Our total order book has surpassed INR 20,000 crores, net of taxes, indicating a promising outlook for future revenue growth. It's worth mentioning that the fulfillment of these orders will commence only after a period of approximately 6 to 9 months from the date of order. This is primarily because of the time needed to complete the necessary formalities for starting the projects.
These formalities encompass a range of activities, including necessary approvals, negotiation of contracts and logistics arrangements. We strive to diligently attend to every detail to guarantee a seamless and successful execution process. The execution cycle of the current order book is about 27 to 30 months.
Thus, it provide healthy visibility of our top line growth, particularly for FY '25 and '26. Numerous state electricity boards have commenced the bidding process to procure smart meters, underscoring the positive impact of the reforms based result linked power distribution sector scheme. Our analysis indicates the high probability of witnessing a speedy inflow of order volumes in FY '25 also.
Our strategic partnership with GIC represents a significant achievement in our journey, bringing together the capabilities and resources -- recourse of both entities to drive innovation, sustainability and efficiency. The formidable presence and robust financial position of GIC, combined with our proven track record in delivering cutting-edge betting solutions, create a powerful synergies that will propel us to new heights.
Talking about the quarterly results, revenue stood at INR 258.3 crores, up by 28.9% as against quarter 3 FY '23, revenue of INR 200.4 crores. As communicated in previous quarters, we expect a notable growth in revenue starting from Q4 '24.
EBITDA stood at INR 27.2 crores, up 33% as against INR 20.5 crores of Q3 FY '23. We have witnessed a significant rise in employee cost and other expenses due to our ongoing efforts to expand our workforce and enhance our systems. This is an anticipation of fulfilling the substantial order book we have secured. Profit after tax stands at INR 13.5 crores for Q3 FY '24, an increase of 16.1% as compared to INR 11.6 crores in Q3 FY '23. However, the profitability of our company in Q3 FY '24 was impacted by substantial rise in financial -- financing expenses due to company's requirement to furnish additional bank guarantees in order to secure the large influx of orders.
According to our evaluation, we expect a significant surge in our revenue from FY '25 onwards. This will be driven by the strong performance of our order book and a steady inflow of new order books. Our conservative basis, we expect to record a total revenue of about INR 2,500 crores in FY '25.
With operating leverage kicking in, we also expect our operating profit margin to significantly improve. We have established ourselves as a dominant player in the Indian Electricity Metering Industry, boosting an impressive track record spending more than 2 decades. We strive to solidify our leading position in the smart metering industry by leveraging our distinctive abilities and capabilities. With our strong presence in the Indian metering industry, we are in a prime position to capitalize on the sector's lucrative growth prospects. We maintain a positive outlook regarding the substantial enhancement of our business operations starting from the fiscal year 2025 and beyond.
Now I request for Q&A.
[Operator Instructions] The first question is from the line of Nikhil Abhyankar from ICICI Securities.
Sir, we have seen significant orders for AMISP across India. So can you just give out a number as to how much orders are bid out till date? And what is the remaining pipeline now?
It's not very clear to me. I don't know there was a disturbance. Can you repeat?
Am I audible now?
Yes, it is better. I mean it was audible. Suddenly, I lost you in between.
Okay. So my question was, sir, we have seen a huge order inflow from AMISP till date, so what is the quantum of total orders bid out till the across India? And what is the remaining pipeline?
So just to give you an idea, obviously, almost 50% of the tenders has been floated. So if you see we have been maintaining [ 25 crores ] worth target of the Government of India. If you always say, they started this journey in 2017, '18, and this is almost 30 crores meters, which will be tendered, ordered over the course of time. Out of that, almost 50% is already tendered, out of which [ 10 crores ] orders has been decided. [ 4 crores, 5 crores ] of tenders are either in the pipeline to be quoted or already quoted to be decided in next 3 to 6 months. So this is the current situation right now.
So can we -- so is it fair to assume that the total -- the quantum of the orders bid-out till date is somewhere around INR 1.25 trillion to INR 1.3 trillion, or is it more than that?
You're talking in terms of value...
Value. Value, sir.
You can take a ballpark figure of -- I would say a ballpark figure of INR 10,000. So around 15 million meters to INR 10,000, I think, will be easier. 15 -- not 15, I think 150 million meters.
Understood. Okay. Sure. And sir, now coming to the results for the quarter. Sir, we have seen a very large spike in our gross margins. Does -- like the gross margins have increased to almost 44% in this quarter compared to somewhere around 36%, 37% earlier. So is it that we have started executing the new orders, which have got higher margins?
Yes, because of the -- even the service revenues have started coming in. The execution of the new orders in the service revenue that has helped the overall gross margins.
So sir, the service revenues are from the AMISP orders?
From the AMISP orders which used to take the -- especially for the South Bihar projects.
For South Bihar you are saying?
Yes.
So can you give us the split between the supply of meters -- the revenue from supply of meters and the service revenue?
Exact, I don't have right now.
A ballpark would be fine.
We've actually -- basically, we have review -- you are -- not exactly these numbers are there. So we treat as a EPC contract where it is with meter installation, everything comes together. So we -- normally, we treat these numbers as like that only.
Okay. Understood. And sir, now that we are closer to the FY '25, so can you just give us some guidance about the execution for next year?
So on the execution, almost all the orders, the contract agreement has been signed. So as we said in the opening remarks also, generally whenever any LOA comes and then the contract agreement is signed within 2 to 3 months, it takes practically 6 to 9 months on the ground to start the execution. So most of these orders have been decided in the month of July, August some has come in the month of October, November. So most of these projects will be on the floor from the second quarter of next financial year, but a lot of them will start from the first quarter also. So you will see almost every project under execution starting from second quarter of next financial year.
And in my opening remarks, I have already given a revenue guidance of around INR 2,500 crores.
INR 2,500 crores.
Yes.
Okay. I'll come to that. Sir, my final question was regarding the equity requirement in the platform in the next year itself? And what is the cash on our books as on date?
So basically, equity requirement will depend how the executions will happen. The cash on our balance sheet is already -- because that warrant money has already also -- total money has come from GIC. So almost we are sitting on a cash of almost INR 500 crores on the books.
INR 500 crores. And sir, the equity requirement, we don't have -- assuming INR 2,500 crores of execution, what will be the equity requirement?
Even that -- so that platform will be -- for an execution of INR 2,500 crores, the platform will be requiring a fund of almost you can say around 70% or 80% of that and out of that, there are some debt also and equity also. So Genus, when we talk about the Genus, we have given a commitment of equity of around INR 1,600 crores for the next 3 years. So I don't think there will be an equity requirement of more than INR 300 crores, INR 400 crores for this particular year.
INR 300 crores, INR 400 crores for this year. Okay. Sure, sir. I have got more questions, I'll get back in the queue.
Thank you.
The next question is from the line of Rahul Kothari from Grit Equities.
Sir, pardon me if I might have mistaken. You suggested a guidance of INR 2,500 crores for FY '25? Is that the number?
FY '25, yes.
Okay. And sir, secondly, I also wanted to understand the breakup of the order book. Regarding how much of the part of the order book is regarding supplying meter to third-party AMISP?
So most of the order book is for the supplying meters to our own self. Through the third parties, we are supplying meters, but majorly here, you will see 95% or 90%, I would say, will be supplied to the Indian -- to the Genus SPVs.
Most of it from SPVs.
Okay. And sir, what we are looking at now that 50% of the orders have been released and since it's now a good time passed by, so can we expect -- or are we pitching for the securing orders from third-party AMISP since they might also now start for placing orders for smart meters?
I'll just clarify that. 50% of the tenders has been floated. So I would say it tenders worth 150 million has been floated, out of which 100 million has been decided and 50 million will get decided over the course of next 3 to 6 months. So that is the current scenario. Now out of 100 million, 22 million is secured by Genus itself. And remaining, yes, we are in touch with all the AMISP players, Adani, Monte Carlo, IntelliSmart and we have secured good orders from Adani also. We have secured good orders from IntelliSmart. We have secured good orders from Monte Carlo. And when we say our order book of net INR 20,000 crores, we have already added those numbers.
[Operator Instructions] The next question is from the line of Milind Karmarkar from Dalal & Broacha Portfolio Managers.
I just wanted to understand, we say that we have INR 20,000 crores worth orders. And we also say that these are -- the stipulation is that this should be completed within 27 to 30 months. If I look at that, then somehow this math doesn't fall in place that next year, we should do only INR 2,500 crores turnover. So just wanted to understand that.
Yes, yes. Your point is very valid. If you see only do the mathematics, like you said is right. So you have to break these orders into 3 parts. So I would say in ballpark numbers around 45% is the initial supply in installation, around 25% is the O&M, and around 30% is the interest. So when these orders have come, 30% goes to the platform revenue and the remaining 70% comes to the revenue of Genus Power out of which 45% comes in first 27 to 30 months. Then remaining comes in the next 6 to 7 years as O&M. These are the ballpark numbers you can divide this.
So even if I do that, then about INR 9,000 crores worth orders are to be finished in 27 to 30 months.
Yes.
Yes. Even then it seems quite low.
So next financial year because a lot of these projects, as I said earlier, there are a lot of these orders have been decided in the month of November, December, lot of contract agreements we have signed in January, February. Practically is full swing these projects will come on the flow from the third quarter of the next financial year. So that is the reason next financial year will be a little less in comparison to the year following that.
Okay. My second question was that we have guided for about INR 1,200 crores of turnover in the -- when we had our second quarter call. So just wanted to understand, we are currently I mean -- if I, again, calculate on that basis, the fourth quarter has to be extremely good or we have to cut down on our expectations for the fourth quarter?
So we are not cutting down on the expectations, it should be extremely good.
Okay. Okay. And my third question was on investment. So I see a significant amount of investment. If I go through the investment schedule as per the annual report of '23, quite a number of investments are on preferential shares or equity shares of our associate companies. So -- just wanted to also understand about the volatility in the other income. So if you could explain that as well. And these investments you think will continue or there is going to be some kind of a consolidation there as well?
So here, you have to understand that all these investments are the old investments and company has already filed a demerger scheme of these investment division out of the company in the NCLT 2 years back, the order for that is already pending. Once that order will come, these all investments of preferential or any associates or nonassociates will go out from the company as a strategic move from the company as an investment division going out of the company.
Only things remain will be the company where there are 2 listed shares, trust and the company's holding, which is Genus Power shares and of Genus Paper. So those -- that will remain in the company. And when we do a consolidated the notional value of debt shares coming up and down with a Paper share. So that reflects in losses or the profits of the other income when we go to the consolidated balance sheet.
Okay. So the last question was on other income. Why is there so much of -- because if I see the stock price of Genus Paper that has not moved so much in the quarter. Despite that why are...
So when you see consolidation, there is a downfall in that. That's why you see a loss in the consolidated balance sheet. When you see stand-alone balance sheet, the other income is because of the FDs and a lot of the cash company is sitting, which is in the form of the FDs and whatever the interest is coming on that, that goes to other income and then some equities that company is holding of other small companies and all. Any movement in that, that also reflects there.
So as a thumb rule what does one expect over 1-year period, any 1-year period, the other income of the company? Forget about the adjustment of profit or loss which you have to make because of accounting standards, the fall and rise in the value. What is the rough other income, which one should consider?
It will be at the same levels, approximately.
On an annual basis?
On the annual basis.
[Operator Instructions] The next question is from the line of Abhilasha Satale from Quantum AMC.
Yes. Am I audible?
No you are not audible clearly.
Ma'am, there is a lot of background noise from your side.
Is it better now?
No, ma'am.
Now is it better?
No.
No. No. Your in a public area it seems, there's a lot of noise coming.
There's a lot of background noise coming from your side.
Okay. I will join back in the queue.
The next question is from the line of Neil Ostwal from Bajaj Finserv Asset Management.
My first question is with regard to the Assam AMISP that you had announced in January. So have we started recognizing revenue for that?
Not yet. We will start recognizing the revenue of that project from next month onwards.
Next month onwards. Okay. Understood, sir. And secondly, we've -- there is a Board approval for some kind of expansion in Assam. So is it over and above the existing 1 crores capacity that we have or this is some kind of upgradation, if you can throw some light on that?
We are expanding the plant in Assam, the work is already going on. And this will further add to the capacity of 1 crores meters.
Okay. This would be further addition. Understood.
Yes.
Next question is from the line of Abhilasha Satale from Quantum Asset Management Company.
Yes, sir. Is it better now?
Yes, yes. Please ask your question.
Yes. Yes. So sir, I just wanted to know that we had committed INR 1,600 crores of investment over next 3 years. And next year, we will require around INR 300 crores. So how much our cash flows will support this kind of investment? And how much we will have to raise in debt further? So this is my first question.
So basically, as I told in earlier question also that company is already sitting on a cash of around INR 500 crores. So -- number one. And number two, where we are giving a guidance of INR 2,500 crores revenue this financial year, and we are looking for EBITDA of around -- 15% to 16% EBITDA levels and all. So there will be a good cash accruals in the company also. So already, those 3 years have been planned from the cash accruals and the cash that company has. So I don't see anything that has to be come from the debt, there might be some increase in debt for the working capitals and all. Otherwise, any equity participation company don't see any debt requirement or any fund requirement.
Okay. Okay. And then I would also like to know if you have already seen [ 4 crores, 5 crores ] of tenders being operated over a period of time. And further, there is a target to complete around [ 25 crores ] of this installation over the next 3, 4 years, how do you see your order inflows moving on from the current level? Can you give some specific will you be able to maintain market share or grow or how is the competition, what kind of visibility you are seeing in terms of your overall order book moving by the time this entire order gets executed or tendered out?
The order book will keep growing, we're keeping a close watch on what all tenders are coming and generally, bring on the projects which we feel are good thesis to work within our capability we are bidding the tenders. So we will be able to maintain our market share over a period of time.
Okay. Okay. So this year, [ 10 crores ] and then next year also, you expect the similar kind of tendering to happen?
No, I don't expect similar kind of tendering. It will slow down a bit because lot of states have come out with the projects. They will see the success of these projects and then further tenders will come out.
Okay. And how this AMISP or this platform business -- platform piece will move in terms of execution? Can you guide something on that front?
No. On execution, I could not understand what do you mean by that?
So this EPC, how that revenue will kick in?
So it is a very simple thing. As I told earlier also, see whatever the total order book you see out of that 45% is the installation and supply revenue and 25% is O&M to be done in the next 7 to 8 years. So all this execution will happen in next 24 to 27 months. And all this execution has to be done by Genus Power because they are the EPC for these projects.
Okay. And on the entire, this is you're guiding for 15% to 16% kind of margin?
Yes. This kind of EBITDA.
Okay. And what kind of CapEx you would require to execute this number, like how much CapEx you are guiding for '25, '26?
So we are not doing any major CapEx required. There will be a lot of investment that will be required in terms of manpower. So for the production side and all, we have already done the CapEx, whatever was required, and we are comfortably placed in the next 3 to 6 months to meet out all the requirements in terms of manufacturing. In terms of execution, yes, a lot of investment is going on in the manpower, a lot of things are being built, but we don't -- that cannot be seen as a CapEx. It is more of an OpEx cost. It will be incurred to execute these projects.
The next question is from the line of Soniya Varnekar from Dalal & Broacha Portfolio Management Services.
Sir, you highlighted that your gross margins have picked up due to service revenues. So since service revenue is likely to continue going ahead. So can we expect this kind of gross margins to continue in coming quarters also?
Yes, we have already given the guidance that we will be able to maintain 15% to 16% EBITDA in the next financial year. So we will continue EBITDA growth.
The next question is from the line of Dolly Choudhary from Niveshaay Investment Advisors.
Am I audible?
Not very clear. But yes, I can understand the question, please.
Okay. Sir, first of all, I had a question regarding the communication technology. So in the current order book, can you give a ballpark figure regarding the composition of cellular and RF?
There is no ballpark figure on the composition. This is my own open technology tender, whereas AMISP we will decide during the course of period, which is the technology we are going to use. As Genus, we were open to all the communication technologies. And currently, we are working both on GPRS, on RF, on NB-IoT. And even in some cases, we are even losing our local technology. So we are openly working with all the communications available in the...
Like we don't have any preference regarding RF or something we are open to both of these...
From the site. At Genus, there is no preference.
Okay, sir. And another question I had regarding the execution pace, I wanted to know like the execution will pick up in next year. I'm sorry if I'm repeating the question. And any challenges that we will face -- and challenges if you're going to face as of now in the company...
That execution will be in full swing for all the projects in next financial year. And yes, once we get into the ground whatever the challenges we face, which is very normal, it's not that we are doing it for the first time, we have done this kind of installation work in the past also. So we are well prepared and ready for that. We will automating it from the government and the people, because this is a -- these are the projects which is primarily supported by the government. And of course, the local public is also in the support of smart meters. So there will be limited challenges in the field.
Okay, sir. And like whatever meters we have installed, what is the SLA meet percentage?
So we are meeting the RDSS requirement. Whatever is required, we are comfortably meeting that.
The next question is from the line of Aksh Vashishth from Future Generali Life Insurance.
So I just had 1 question. I just wanted to understand what explains this loss of about INR 10-odd crores that we have had this quarter from the associate entities?
You're talking about consolidated balance sheet?
Yes, yes, the consolidated numbers, the share of...
So I earlier also told that the company is holding a few equity shares like Genus Paper and all. And this is -- these are the adjustment of market price of these shares and all. And then company had some expenses in its associate platform company, which it has made with GIC. So initial expenses are there -- put up in that consolidation from numbers have also come. So basically, it is mainly of the price adjustment, which is a notional figure and all. And then secondly, some expenses that have been being 26% number of that platform, whatever the expense has been there, that has come here.
The next question is from the line of Rahul Shah from TS. As there is no response from the line of current participant, we will move on to the next question. The next question is from the line of Nikhil Abhyankar from ICICI Securities.
Sir, you mentioned that we are receiving services revenue from South Bihar project already. So basically, I wanted to understand how is the receivable cycle over there? If you can just quantify number of days or something?
So receivable cycle will of course the RDSS, but it is not exactly in RDSS tender, it is very differently designed by Bihar, where they're giving almost 30% as a upfront payment and 70% as a per meter per month revenue. And for that, whatever the payment terms is 30 to 45 days, we are getting paid for the services within the time period.
Okay. So within 30, 45 days, we are getting paid. Okay. And sir, you mentioned about capacity expansion in Assam. So can you just quantify, it will be an additional 1 crores. So what will be our exact capacity after that? And how -- what is the total capital that we are incurring for this Assam?
So we will be maintaining a capacity of around 1 million meters a month. This is what we are going to achieve. After all these small expansions, what we are doing in different parts of -- different units what we have and neither we are doing it in Assam.
Okay. So basically, our capacity will be 1.2 crores annually after...
1 million meters a month that is what we are giving.
Understood. And sir, you mentioned that you are investing in team building and manpower expansion. So what exactly will be our run rate going forward in terms of employee cost? And why is there a huge spike in other expenses as well? It will anyways directly linked with execution?
So it is directly linked primarily with the tender submission. If it so interesting when we are participating in such tenders, there's a huge cost of field surveys and a lot of cost to participation of tenders is incurred. That is why you will see a major cost going up in that particular section. And when you have to bid for these tenders across the country, you have to do a very ground level survey. So that is primarily the cost you can see it on a lot of...
So going forward once we reduce our -- would we say, I think there's only many tenders going forward. So once they reduce our participation will this expenditure come down as well?
Yes, the cost of quoting tenders, the cost of securing orders, the cost of initial investment is very high. As I said earlier that quoting projects, initially, when we are quoting the tender then you are getting the people in the field, so all this -- that is why you are seeing a lot of expenses on the higher side. Later on, they will come down significantly.
Nikhil, I will -- would like to add just to give a clear picture also here. You will see there are 3 types of expenses. One is employee benefit expenses, one is other expenses and one is finance cost. And you see that all 3 are increased.
So basically, when we say team building that increases your employee benefit expenses. When you say that there is a lot of surveys are being done, lot of groundwork is being done before going for the tender or before execution of the starting of the tender, that also increases their cost a lot. And when we come to finance cost, when you bid a lot of tenders, you have to give a lot of EMDs, you have to give a lot of bank guaranties, there's a lot of finance charges out there involved.
So basically, all these 3, when we go further and when our revenues will be increased, you will see a substantial number coming down in terms of percentage and all. That's why we are giving -- always giving a guidance also of 15%, 16% that, okay, we are very comfortable that we will be getting a EBITDA of 16% because all we can clearly see that from where these will be coming.
So can we assume that most -- like a large part of our manpower expansion is already behind us, and there won't be...
See there will be a lot of manpower expansion projects that will be headed because right now, we have lot of trust in the execution...
That's why I am saying in terms of percentage, not in absolute terms. I'm not talking of absolute terms.
The next question is from the line of Deepak Poddar from Sapphire Capital.
Yes. Am I audible, sir?
Yes.
Yes. Sir, just first up is a clarification. I think you mentioned in one of your remarks that fourth quarter, we expect a bump up in our execution. So what sort of execution range we are expecting this fourth quarter?
We are maintaining the guidance of INR 1,200 crores. So accordingly the execution will be done.
So basically, we are -- in broad terms, you can understand that the next quarter, we are expecting a number of INR 400 crores in revenue.
Broader term, yes. And along with that, because of your leverage advantage as well, you do expect some improvement in your margins as well, right?
Hello? [Technical Difficulty]
[Audio Gap]
I just wanted to understand that you mentioned that you need more CapEx if you go about INR 2,500 crores of revenues after a point in time. So are you expecting to do some CapEx post FY '25 in order to fulfill your contract expectations?
No major CapEx will be done.
Okay. And the Assam expansion that you did, can you tell me what was the cause of that expansion for 1 million meters capacity?
We're creating a capacity of 1 million meters as all the plants put together that was the target. And that is the reason and majorly, we have wanted to expand our Assam unit. So that is our -- so that we can manufacture more meters there. So it's not that 1 million meters is for Assam only.
So sir, what is the total gross block time, if you can share at this point?
What is the total?
Gross block.
Gross block, I have to check and we'll come back to you on that.
Okay. Sure.
The next question is from the line of Vivek Gautam from GS Investment.
Yes, sir. Sir, my query is regarding the implication of the political implication, especially of the installation of smart meter, because if you remember, Himachal Election BJP lost and the analyst -- many analysts told that because the smart meter installation happened at the wrong time, just before election because smart meter installation is leading to high bills and people who are used to low bill payment, and they are having this risk and then the resentment and anger comes in and there is a political cost for it. So any implication of -- because of this political cost, any implication on our installation plans and future for us there.
So there is something wrong in the information because Himachal has not yet installed smart meters. So losing election is due to smart meters in Himachal just doesn't stand. And -- so I could not relate to that.
No, there is a Professor of ISB, Hyderabad who tracks the sector very closely. And there is a retail concall, it was having. He was praising the power reform sector, which has happened in India over last few years under Mr. R. K. Singh and the team that I would like to also know about your comment on that. But he very clearly mentioned about the Himachal state election outcome, you mean to say there is no smart meter installed in Himachal Pradesh at all?
Himachal, RDSS is not yet implemented. They have came out with 3 tenders, which are not even decided yet. So for me also, this is a little confusing, how on the basis of smart meters they lost the election. So that is a very tough statement for me to endorse.
The fear is...
Secondly, I want to add on to one thing. The highest number of smart meters have been installed in UP, I think, almost 2 million meters, if I'm not wrong, and it was installed prior to the elections of which BJP won again. So practically, I don't see any link of smart meters with the elections as such. So I don't know.
No, no, you share me your number, I'll give you the -- post you the concall detailed video, which is there. Because the Professor of ISB, Hyderabad you must also be able to find out, he tracks the sector very well, and he was very appreciative of the reforms which being done in the power sector enabling...
No, I highly appreciate his knowledge, I cannot challenge it. But the matter of the fact is RDSS is still not implemented in Himachal, so that I guarantee you that.
Okay. Okay. Okay. So you mean to say there is no political risk because of smart meters?
Almost every state has done some smart meters and states have done it from the last 7, 8 years, there were a lot of pilot projects which were going on. RDSS is started implemented in last 1, 1.5 years only. And till today, Himachal has not gone ahead with the RDSS smart meter installation.
Okay. Okay. Okay. So -- and anything else you would like to highlight around the opportunity size and the expected CAGR and the differentiator our company is having, sir?
So we have been sharing this, yes, we are a metering company we've got into AMISP thing. We have already given the guidance of next financial year. So we expect a very robust growth, in the years to come. Yes, nothing else to add on to that.
Because any -- what is the opportunity size and expected growth rate for our company for the next 2 years, sir?
Sir, I've already given the guidance for next financial year, almost 2x of the current financial year, that is around INR 2,500 crores. We have an order book of around INR 20,000 crores. So we see a very good growth for the company in the coming years and almost 50% of the tenders has been floated with -- out of which, I would say 35% is already decided, remaining 15% will get decided in next 3 to 6 months. This has been done.
Okay, sir. And basically, there was a very good talk by the Power sector, Power Ministry Mr. R. K. Singh on the forms he has taken recently in the ET Now Conference. So if you would like to highlight a few points on the Power sector reforms in the coming year? And how is the future looking like, sir?
First, look our current government is very, very positive about the reforms and it is the need of the hour. We have to just understand it very simply as a consumer of electricity every individual on earth needs electricity and he is the consumer of electricity. And with so much of consumption of electricity increasing, its very many different types of electricity generation is happening.
A smart meter is the need of the hour. So it is required by the consumer. It is required by the distribution companies. It is required by everyone. So it is no more a luxury, it is a necessity. So since we have interest in the distribution sector, if we will get a little bit into the depth of why smart meters are needed, because this is the first step towards a smart grid. It is a necessity now. You just cannot run your distribution sector without this project anymore.
Okay, sir. And sir, any concerns which we are having on the B2C and the payment receivables side, sir, if you can just -- this is my last question from my side.
So all these are RDSS projects with the direct debit facility, so we don't see any problem with the financing.
[Operator Instructions] The next question is from the line of Darshil Pandya from Finterest Capital.
Am I audible?
Yes.
One thing I want to ask is your tax guidance for this year and because it's been very fluctuating for some time. So if you can please help us with your tax guidance, that would be helpful?
So basically, we added a new tax regime, where the tax guidance will be almost 25%. It will be at 25%. Sometimes, it is a little fluctuating because of some expenses which are not allowed in the tax things and all that sometimes make it here and there. Otherwise, the tax guidance is 25%.
25%. For next year as well, right?
Yes.
And are we planning to take any debt or something for this year or something?
So this is an ongoing process. So what was the working capital requirement, it will be there...
Any major working capital deployment I meant...
Major, majorly, we have -- there won't be -- the majorly, we require more of the nonfund-based limits and all. So there won't be any major things coming to that. Already, we have given an announcement of $50 million we have already taken from DFC, which has not been yet disbursed. So that disbursement will surely come in the end of this financial year or maybe next financial year. So that will be primary an addition in the working capital that has already been taken in consideration because that is already sanctioned and we have already told many times that we have got a sanction of $49.5 billion from DFC.
The next question is from the line of Deepak Poddar from Sapphire Capital.
Hello?
Yes, we can hear you.
My line got dropped. So I was just asking that time with improved execution in this fourth quarter, we expect some improvement in margins as well, right? Because of leverage advantage that you ideally should get?
We'll, surely.
Okay. Fair enough. And in terms of order breakup, you did mention, right? I mean, INR 20,000 crores of order that we have, about 45% of that so which is coming to about INR 9,000 crores is what we need to supply in over next 27 to 30 months and remaining INR 11,000 crores will be realized as an O&M.
Just to make it simplified again that out of the 100% order book, the 30% order book goes to the platform as a financing arrangement, 45% is installation and supply and 25% is the O&M. So this is how you have to see the total order book.
Understood. Understood. So 45% of that is what ideally would come to us, right?
45% of that ideally would come to us in the next 27 to 30 months and 25% in next 6 to 7 years and the remaining 30% goes to the platform.
30% goes to the platform. That's very clear, sir. But -- so in light of that, if we are expecting execution of INR 2,500 crores in FY '25, so what sort of execution level we are seeing for FY '26? It should be north of INR 4,000 crores, INR 5,000 crores?
It will be much better than '25 and we would like to give that guidance closer to -- once we start executing projects in '25, I think we'll be able to give you better guidance on that. Basically, definitely, it should be much better than '25.
Much better. Yes, yes, of course, of course. Just one last thing. I mean, because you do expect your execution in next year to ramp up so much. So on a quarter-on-quarter basis, we do expect that whatever execution we are doing on a quarter-on-quarter basis, we should see some improvement for the next 3, 4, 5 quarters, at least?
Yes, you will see a lot of improvement in full execution, full throttle execution according to me, you will start seeing from the third quarter of next financial.
Third quarter FY '25, correct?
Yes.
Okay. Okay. That's very helpful, sir.
But one thing, as you asked that every quarter, in next 8 to 10 quarters, every quarter, you will see some improvement is going on because there will be a ramping up of all the projects which we have already won and some new projects and all. So there will be fast for execution in every quarter.
[Operator Instructions].
And I think let us take 1 or 2 more questions because it's around 3 and we have some more meetings after that.
The next question is from the line of Dolly Choudhary from Niveshaay Investment Advisors.
I had a follow-up question. Sir, the tenders that you were talking about better floating. So I wanted to know that what -- how much floating is going to the OEMs, the meter manufacturers rather than the AMISPs?
All these tenders are AMISP tenders.
Yes. So like how is the flow moving towards the OEMs, how the execution...
Flow moving to OEM means?
Like the meter manufacturers, how the orders are going to them on what pace?
So you have to see the business from 2 angles. So right now when we talk as a AMISP, how this order book is as AMISP Genus. And then when we give our orders to the different vendors, so how to -- I'm still unable to connect to your question when will it comes to tendering business, it is only RDSS tender, which are quoted by the AMISP. These can be meter vendors also.
Okay, sir. And one more thing, as the deadline has quite strict regarding the RDSS. So are we only supplying to our own AMISPs or the -- we are tendering other AMISPs...
So we have mentioned that earlier also. We are working with all the AMISPs, and we have received orders from different AMISP companies, and we are supplying meters to them.
The next question is from the line of Akash from Dalal & Broacha Stock Broking.
Yes. Sir, my question was more regarding the capital structure related guidance available. Currently, we have around...
Sorry, sorry, can you come again, please?
Yes. I actually wanted to understand how our capital structure will move forward ahead? Currently, we have around INR 350-odd crores of debt in our books. So going forward, that will also require a lot of working capital and also per annum basis we'll be investing around INR 300 crores to INR 400 crores in the SPVs, so how are we -- how our capital structure moving -- will be going forward? Like how many debt will we further take up for working capital expense.
Basically, as I told earlier also, there will be cash accruals that will be regularly happening for next 3 years also, a reasonable cash accruals will be there, which will be funding our equity requirements. And when we talk about the working capital limits, we -- as I told already, we have been sanctioned a loan of around $50 million from DFC that will be coming to the balance sheet.
And I think that will be more than enough, and there might be some more requirement of the working capital that we will see in the coming time and all. But company is already sitting on a company is already sitting on a cash of INR 500 crores plus there are a continuous cash accruals happening to the company.
Got it. Got it. So everything will be more or less internally accrued? And just for the working capital, we'll be taking debt?
Yes.
The next question is from the line of Nikhil Jain from Galaxy International.
Just a couple of questions. So one was I just wanted to know if the -- if you can give the breakup of exports for this quarter?
So if you see the overall export business out of almost INR 800 crores business we have done in this financial year till now -- till 31st December. And out of that, around INR 90 crores is export. So we are -- we have done healthy export business.
And do we expect an increased traction on exports also, the gas and the smart meters for Middle East, as mentioned in the annual report?
Currently, we are sitting on an order book of around 45, 50. But yes, a lot of tenders are ongoing in the international market also. So keeping our fingers crossed, we see a good export business year-on-year to be done by June. We are spending a lot of our time and energy on it.
Right. The second question is, I just wanted to get a comfort or, let's say, our preparation, preparedness to execute all these 7 or 8 different AMISPs in different part of the countries on a very ground level at the same time, right, somewhere in 2024, '25, they would be running simultaneously, right? So how prepared do we feel ourselves in terms of manpower, processes, systems and other things.
So we are continuously working on it and one thing is we have done projects in the past in multiple state, multiple projects under our ECC division. So it is not like it is absolutely a new thing for Genus. But yes, at this scale, we have also not done it in the past. But quarterly we have built our team processes recently, a very senior person has joined as the Chief Operating Officer in our GMISP division. So it is a continuous process. We are building our systems, offices, manpower and we are very confident that if somebody will be able do it successfully in this country, Genus is definitely going to be one of those.
Okay. That's good to know. And the last thing, actually, on the joint venture side, on the joint venture with the financial company, 30% goes to the joint venture, right, the financing part of it. But some part of that should also come back to Genus, right, given that we are doing an equity investment of whatever let's...
See 30% goes to the platform.
Right. So some part -- so 26% of the profits of the joint venture as and when they happen, we'll also come back and flow to Genus in due course of time, right?
26%.
Yes. Yes.
Can we close the call now? It's already 3.
Yes, sir. That was the last question for today, ladies and gentlemen. I would now like to hand the conference to Mr. Kailash Agarwal for closing comments. Over to you, sir.
Thank you all for joining this call. I sincerely thank you all for your continuous support, and we assure you that the company is on the right track and we'll be achieving great highs in coming years. Thank you very much. Thanks a lot.
Thank you, everybody. Have a good day. Thank you.
Thank you. On behalf of Genus Power Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.