Q2 24/25

Oct 30, 2024

Quarterly report

Summary

Q2 FY25 revenue and EBITDA rose sharply as smart-meter execution accelerated, while a large order book supports growth. Elevated working capital, project ramp-up delays and limited near-term tender awards remain key constraints.

Ladies and gentlemen, good day and welcome to Genus Power Infrastructures Limited Q2 FY 2025 earnings conference call hosted by Emkay Global Financial Services. As a reminder, all participants line will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star, then Zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ashwani Sharma from Emkay Global Financial Services. Thank you, and over to you, sir. Yeah. Thank you, Shikha. Good afternoon, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Kailash Agarwalji, Vice Chairman, and Mr. Jitendra Agarwalji, Joint Managing Director. I shall now hand over the call to them for their opening remarks, and post which we will open the floor for Q&A. Over to you. Hello. Yes, sir. Please. I got disconnected, so have we started the call now? Sir, you are now connected to the main call. Please proceed with the introduction. Okay. Yeah, thank you. Good afternoon, everyone. A very warm welcome to the Quarter 2 FY 2025 earnings call of Genus Power. At the very outset, let me wish everyone a very happy Diwali and a prosperous New Year. The results and press release are uploaded on the stock exchanges and company website. I hope everybody had a chance to look at it. Our revenue stood at INR 487 crores, presenting an 88% increase compared to INR 259 crores in Quarter 1 FY 2024. This growth was driven by robust execution in our smart metering segment. Our EBITDA for Q2 was INR 81 crores, up by 232% compared to INR 25 crores in Q2 2024. The EBITDA margin improved by 724 basis points to 16.7%, driven by the positive impact of operating leverage. The enhancement in operating margin was further bolstered by our initiatives to optimize operational efficiencies and control costs. This was achieved despite the rise in employees and other expenses, driven by our ongoing efforts to expand the workforce and strengthen systems in preparation for the execution of the substantial order book we have secured. We anticipate sustaining our operating margins at similar levels going forward. Our PAT stood at INR 58 crores, an increase of more than five times compared to INR 11 crores in Q2 2024. This surge in PAT also includes a one-time gain of INR 11 crores recorded under other income, stemming from the resolution of an arbitration settlement related to a government project executed in 2007 to 2009. As on 30th September 2024, our total order book, including all SPVs and GIC platforms, stands at about INR 31,776 crores net of taxes, and these concessions are for 8-10 years. Our robust order book strategically positions us for sustained growth in the upcoming quarters. We anticipate full-scale execution to accelerate from Quarter 3 2025 onwards. We are optimistic about achieving our stated revenue target of approximately INR 25 crores for FY 2025, with an expected EBITDA margin of about 15%-16%. We are well prepared to navigate potential challenges associated with the large-scale execution of projects while ensuring prudent cost management and effectively meeting financing requirements. We have also been receiving a significant number of inquiries from third-party AMISPs, and a lot of LOIs are received. But we have a policy not to announce publicly the same on account of our company policy, which does not consider LOIs as part of active order book. We are exploring new opportunities in gas and water metering markets, both international and domestic. Overall, FY 2025 holds great potential for us as we capitalize on our robust order book, strategic partnerships, and strong market position to drive substantial growth. We are confident in company's future prospects, fueled by our dedication to operational excellence, innovation, and sustainable growth. We can now open the lines for Q&A. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and One on their touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and Two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Mohit Kumar from ICICI Securities. Please go ahead. Hi. Good afternoon, sir, and congratulations on a very good set of numbers. My first question is on the employee expenses. So employee expenses have seen a sharp jump, right? Having said that, given that you are executing a huge order, so we do expect some growth. But the question is, where do you think this number will settle down in FY 2025 and FY 2026? On these employee expenses, these numbers will further grow because not only your execution is increasing, which will take a much bigger picture from December onwards. A lot of numbers will start coming. Apart from that, a lot of development work is also going on. As we have mentioned earlier that we have one company which is doing HES, MDM also announced, radio frequency also announced. Because of that, a lot of employee strength has been enhanced all across. So this number will further grow. I cannot give any number right now where it will get settled. But yes, next six to eight months, I see it continuously growing. Then it will take a stagnant phase. But the direction is that some sense of the numbers. Sorry for interrupting, sir. Mohit sir, if you can please be a bit more loud. Is it better now? Yeah. My question is, sir, this 63 crore of employee expense, you did say that you can't give any number, but some sense whether it will be INR 90 crore, INR 100 crore per quarter, some sense of the number. I don't want to give any number right now, but yes, this will increase for next six to eight months, then it becomes stagnant. That is what I can say currently. Understood, sir. Sir, there are a lot of third-party orders which are floating around, but we haven't seen you winning anything as of now. Are you looking at third-party order now, given the fact that no bidding is likely to happen, or let's say the bidding intensity will lessen down from the outside? We are definitely looking at third-party orders, and we are continuously supplying meters to all our customers. We continue to grow that business also. We have always been known as the best meter manufacturer in the country, and we continue to maintain that capability. The last question, sir, on the revenue target. I think you gave that INR 2,500 crore target you've given, and we have roughly less than INR 900 crore in the first half. The growth rate required for the H2 is quite steep. But we are confident that we will achieve it. I understood, sir. Okay, sir. Happy talking. Thank you, sir. Thanks. Thank you so much, sir. The next question is from the line of Aditya Velikar from Axis Securities. Please go ahead. Thanks for the opportunity and congrats for the very good set of numbers, sir. My first question is with respect to our order book. How do you see it is shaping in H2 and next year, or is it now at the peak, or how is the order pipeline? I want to understand that. Hello? Hello. Sir, your line is on talk mode. Please go ahead. Hello, was my question audible? Sorry. Sir, your line is on talk mode. Please go ahead. Sir, my question is with regard to order book. How do you see the order pipeline going ahead in H2 and next year? Is this 31,700 order book now at the peak, or we expect further orders in H2? JK, are you there? Jitendra Agarwalji is connected with us on the call. Sir, please go ahead. I think he's not hearing, or something is wrong with the line. I suppose sir has muted his line from his side. JK Ladies and gentlemen, we will wait for a moment, and I will reconnect the management once again. JK is yet not connected. I just called him on phone, and he said that I am not connecting. Hello? Hello. Hello. Harilal, are you there? Hello. Hello. Hello. Ashwani, are you there? Yeah, I can hear you, sir. What's the trouble? What's going on? I can't understand. JK, I just talked to JK. He's saying that he's not connected. We have Jitesh. Jitesh is online. Okay. We can again connect to Axis Securities and they have their question again. Am I audible now? Yeah, you are audible. JK, are you there? JK? Hello. Hello. Hello, Shikha. Sorry for the inconvenience. Shikha, why are you not responding? Sir, I will just connect Jitesh back online with us. You connect Axis Securities, please, and Axis Securities can have their question please again. Yeah, I am on the line. Shall I proceed with the question? Yeah, please. Yeah. My question with regard to our order book, how do you see it shaping further in H2 and maybe in future, or have we now almost at the peak? Currently, there are no live tenders in the market, so I don't see that order book increasing for next six to eight months. I don't see this as a peak because only 60% of the countries is covered under the smart meters in terms of either tenders has been floated, orders has been decided, few tenders are still running. So 40% of the market is still remaining, which I feel tenders will start coming from the quarter one of next financial year. Understood, sir. And sir, my second question is, any guidance you can give for FY 2026 with respect to top line and margins? In terms of guidance, here also we said we expect a 50% growth in the top line and we maintain the same EBITDA levels of 15%-16%. So around that we maintain the same guidance. 50% top line growth in FY 2026 or over INR 2,500 crores in 2025 you meant? Yes. Understood, sir. Thanks. I have few more questions, but I will fall back in the queue. Thank you so much. We have the next question from the line of Yash from Stallion Asset. Please go ahead. Hi, sir. Thank you for the opportunity, and congratulations again on a great set of numbers. Sir, I am a little bit new to the company. The first question I have is, I think you have given some explanation on the volatility of other income, right? This quarter as well, we have seen almost INR 63 crores of other income. If you want to model this, how do we go ahead thinking about this number? Basically, you have to understand that this other income is basically a notional number rather than an actual number. This number again has come due to the companies holding some shares in the trust, and that is the value of the trust, those shares. When you see the consolidated numbers, there is other income of almost INR 30, INR 31 crores more than the standalone one. This INR 30, INR 31 crores is basically because of the value of the shares in trust that has been increased. We cannot give any figures on that or any guidance on that because that totally depends on the market. Tomorrow, next quarter, you will see there might be a loss because of that. But these are all notional numbers rather than actual numbers. Okay. Got it. Sir, given that we have got a very strong order book, almost INR 31,000 crores, and I understand this is over a period of 8 to 10 years. So, at least in the near term, FY 2026, I was thinking that are you being a little bit more conservative on a 50% growth or you think that if things fall in place, we can grow at a higher pace than that as well for FY 2026? I do not think, sir, we are being very conservative. This is more on a realistic, because all these projects which we are doing, the 8 to 10 years, they take a certain time to come to the full swing. That is the reason we are maintaining the same. Sure. Sir, my last question is, your interest cost, I mean, you will be taking more debt next year as well. So its run rate is about INR 29 crores for the quarter. Will you sort of maintain this or this might go up next year? It will go a bit, as more the execution will happen, it will go a little bit up also. Okay. Can we assume about INR 150 crore for FY 2026, round about that number? If not INR 150, INR 140, INR 135 will be a good number. Okay. Thank you. Thank you so much. We have next question from Bhavin Chheda from Enam Holdings. Please go ahead. Yeah, good afternoon, sir. Congrats on strong order book and improving numbers both on the top line and the margin side, and a strong guidance. Just a few questions. One is, if you can update us on your expansion plan from 1 crore to 1.5 crore smart meters, where that stands. Second, also, if you can give us what has been the monthly run rate now of smart meters, because you are maintaining a strong guidance of INR 2,500 odd crores as compared to INR 900 crores in the first half. Basically, we require almost INR 1,600 crores in the next six months, which is like INR 250 crores to INR 300 crores per month kind of a number. Whether that October, there has been a substantial ramp-up in installation of smart meters, or how has your production of smart meters, as well as installation of smart meters, has that run rate substantially gone up in the September, October, which month, or when it would be ramping up? On the manufacturing extension plan, it is continuously, we are working upon it. The new plant in Guwahati is already started, almost started, and it will be in full swing in the next one month. So that extension plan is more or less under the place, and we will be comfortably manufacturing 1 million meters every month. So that is well taken care. In terms of execution, even October, November, a lot of delays have happened because of the festivals, and they were very well known. So you will see the significant jump in numbers mid-November onwards. It is very well placed. It is visible to us, and what I get is giving, we are confident of achieving that. Not all these run rates, I understand, mathematically, these run rates may look very substantial, especially in the fourth quarter. But yes, we will see that happening. Right. And if you can share any number on quarter 2 and first half smart meter volumes. In terms of manufacturing or in terms of installation? If you can share both. In terms of manufacturing, exact number I need to Is that, but we have done around 2 million meters in quarter 2, and installation has been 800,000 meters. Installation is 800,000? Yeah. Okay. And quarter one would have been, sir? Exact number I need to- Or first half cumulative number if you have, that is also fine. I cannot give you number without having the numbers. No problem. First half number also you do not have. Okay, no problem, sir. Other question is on the fund infusion in the platform. How much has happened till date, and how much you are planning this year and next year? Basically, the best thing is we are providing you the link for the Gemstar platform also, and you can visit the site of that platform, and you can get all the information, the Genus shares also, and the other, the GIC shares also. That will be a better idea, getting all the numbers at one go, rather than getting. Regarding next one or next year and next to next year, whatever you feel that we have to understand that the total outlay of Genus will be around $210 million. Right now, hardly 2 or 3 million dollars that has been invested by Genus. So next year it will be around 40% of the remaining, what we have committed will be there, and next year, again, a 40% number will be there. So 40% in 2026 and 40% in 2027. Yeah. And remaining 2028. Remaining 28. Okay. This is for your 26% share. This is your equity portion. This is for our equity portion, yeah. A proportionate amount will be put in by Will be coming up by GIC. Almost 3x of that, basically. Yeah. Right. So both will simultaneously put, or there are different timelines for both? Both will be simultaneously. Okay. So basically, you are saying 40%. This information I want to provide to all attendees, that we will be providing the link. Already has been provided to the sites also, BSE NSE site. On those links, you can go and visit the website of the platform and get all the information regarding the platform. Great, sir. Okay. I am just summarizing, you said $210 million, 40% amount each would come in 2026 and 2027, so that is almost like 80%. These are, again, all raw numbers that we have. Raw numbers. I am asking raw numbers and exactly. Secondly, on raw numbers also, you have to understand that this is the equity invest on the basis of 50% debt and 50% equity in the platform. If there will be any change in that ratio, if that increases in the platform, this number will come down. Sure. There is a big disturbance, Chipa. It is not from our side. I do not know. There is a big difference, Mr. Vince. Okay. The other numbers, sir, what has been the export run rate? Sir, can we take other questions also? You can again. I have a last one. Just the export run rate and the inquiries in the export market. The export run rate is a bit slow in the first two quarters of this financial year. In terms of inquiries, we are working on some large potential customers, and there is a very good traction. We see export business also getting a very good shape from fourth quarter on. Thank you. We will take the next question from the line of Dev from Avendus Spark. Please go ahead. Hello. Good evening. Yeah, we can hear you. Yes, sir. Thank you for the opportunity, sir, and congrats on a good set of numbers. I just wanted some insight from the top line guidance. You mentioned INR 2,500 crores, but if I look at the working capital, that has substantially gone up, which is leading to a negative cash flow. I just want to understand, as top line grows, how exactly will this look, sir, in terms of cash flow? How will cash flow move? Will working capital get better? Your insights on that. Just to give you an idea, all these AMISP projects, the initial flow of cash is very, very high. All these projects are ramping up and a lot of money is being infused currently. With the same numbers which we have infused currently, you will get this revenue in next quarter onwards. A lot of investments happen in advance. That is why you are seeing a lot of influx of the cash flow. Hello? Yes, keep going. Sorry for interrupting, sir. Your line is not clear. Hello, am I audible now? Not very well, but yes, you can be. One second. Give me one minute. Sir, we can proceed with the next question, and you can rejoin the queue. Okay. We have the next question from the line of Chandresh Malpani from Niveshaay Investment Advisors. Please go ahead. Hello, am I audible? Yes, Mr. Malpani. Sir, thank you for the opportunity. Sir, my question is related to previous participant only. Sir, my question is regarding the high trade receivables. It is more than the half yearly sales which we have done. Just to understand the perspective that since we are selling to the platform and we will be receiving our payments in 60, 75 days, why are these receivables so high? These receivables are very high because the agreement with the platform is, once we install the meter, we have to do the site acceptance test. Once the site acceptance test is done, the project goes live. Once the project goes live, then you start receiving the CapEx payment from the platform. All this process takes minimum 90 to 120 days because there is a process of doing this SAT. There is a timeline that it has to run for 45 days. There is a disaster management recovery system. These are all the guidelines given in the RFP. Accordingly, these projects are running. That is why all these projects are starting initially, and most of them are under the FAT and SAT. Operation go live takes time. That is why I said earlier also, initially, you will see any project which is getting started, there will be a lot of influx of the capital initially. But after 6 to 9 months, you will see this working capital getting normalized significantly. Okay. Sir, with respect to that only, if you can get a number on the number of projects that have gone live for Genus and since our quarter date. Currently, our four projects are already live, three in Assam and one in Bihar. The projects which are already being offered to go live, which will take 2 to 3 months to become live, will be from Chhattisgarh, from Uttarakhand, one more project in Bihar. You will see a lot of these projects becoming go live from January, February onwards. Okay. Thank you, sir. Ladies and gentlemen, if you wish to ask a question, you may press star and one on your touchtone phone. We have the next question from the line of Darsh Solanki from Axis Securities. Please go ahead. Yeah. Hi, sir. Congratulations on the good set of numbers. My question is regarding the installation target. From the National Smart Grid Mission website, we can see that out of the 25 crore smart meter installation, 22.2 crore have been sanctioned, and 12.7 crore have been awarded. Do we have any idea on the balance tender, what's the status and by when do we expect this tender? All these 12.7 crore has been already sanctioned, and there are a lot of projects which are coming that there are tenders which are live, there are tenders which are to be quoted in next 3 to 6 months, and there will be, as I said, an influx of these tenders will happen from next financial year onwards. I do not see a lot of orders being finalized now, any orders significantly being finalized in this financial year. All these targets of 27 months, there have been delays from the field acquisition side also. In due course of time it is happening. Understood. You are saying that even to get new orders, even our order book, we get new orders probably from the next financial year onwards. Yes. This financial year, I don't see any significant orders getting decided. Understood, sir. So that's from my side. Thank you. Thank you. Thank you so much, sir. We have the next question from Dev from Avendus Spark. Please go ahead, sir. Hello. Hello. Hello. Yes, sir, can you hear me better now? Yeah, please. Yes, sir. My next question was just on the revenue recognition front. Can you just help me in terms of understanding how exactly does revenue get recognized once you take on a project, et cetera? Basically, that's a straight as we supply to any other work. We are supplying everything to the platform. Okay. Genus is booking their revenue, as we are booking to others. Yes. Basically here we have to understand very clearly that basically, as this platform is an AMISP, like we supply to others, it is the same, we are supplying to the platform. The only thing here is that we are doing all the work for that platform. So for Genus, revenue recognition is the same. There is no change in that. Okay. Thank you, sir. That was my question. Thank you. Thank you so much, sir. Ladies and gentlemen, if you wish to ask a question, you may press star and one on your touchtone phone. We have next question from Amit Kumar, who is an individual investor. Please go ahead. Thank you for the opportunity, and congratulations on the great set of numbers. My question is, we have long-term borrowings increased from INR 78 crore to INR 494 crore as on 30th September, and we have INR 759 crore of bank and cash balances. Just wanted to understand why we are using debt if we have a sufficient amount of bank and cash balance available. This is my first question. Let me answer your first question. Whatever this long-term debt that has been increased is for the Bihar project, which is the company is doing on Genus Power's balance sheet. There is only one project which is being done, and this is a 1 and a half year old project, the first project which Genus bought, and that is being done on the balance sheet of Genus Power, not on the balance sheet of the platform. Here, all the investment for this particular project, even the initial capital outlay and everything is going from Genus. Basically that is the amount that has been taken by BSC USA, and that is used for that project, number one. Number two, regarding the cash and cash balances, the company has a policy to keep some cash and cash balances always because we are increasing our load in multifold. Always, you never know that there might be some hiccups coming. Always, as a policy of the company, we want to keep some buffer with us, so we can use that whenever required. Okay, thank you. Second question is, there are INR 27 crores of receivables as on 30th September and INR 900 crores of revenues for H1. Receivables are more than half your revenue. In previous concalls, we guided that receivable days will be reduced as the platform will collect the money. But I can see cash from operations is also negative. Just wanted to know, what are the debtor days as of 30th September, and what actions we are taking to improve our receivables and cash flow from operations. So, as I clarified last year also, all these projects are getting started. Almost all states, whether U.P., Chhattisgarh, Himachal, all the places from where we got orders in the last 6 to 9 months, these projects are getting started. Initially, there is a lot of capital infusion happening in these projects. We have to supply the meters, install them, offer them for the SAT, and once they are operated, it takes 3 to 4 months to become go live. That is why initial capital outlay. I'm sorry, sir. I've not made any notes. Hello. Hello. Yes, sir. Yes, I am listening, sir. That is the reason there is a huge amount of debtors being seen. Six to nine months down the line, once most of the projects are go live, then you will see an improvement in the working capital. Okay, thank you. My last question is, as I can see, there is a substantial increase in employee cost. Could you provide the number of employees as on 30th September versus 30th September 2024, 30th September 2023? I do not have it exactly right now, but we can always provide it later. Okay. Thank you very much. All the best and happy Diwali. Thank you. Thank you so much, sir. We have the next question from Chinmay Kabra, from Emkay Global Financial Services. Please go ahead. Yeah. Hi, sir. What is our attrition? Sir, currently we are currently at a capacity of 1.1 million per month, and we have been planning to increase this to 1.4 million. We just wanted to know what is the timeline on that. We are not planning to increase the capacity. I could not get your question exactly. We have been always maintaining that we will We have been planning for an expansion. Hello? There is some problem in today's call. Hello? Sir, am I audible? Yeah. You are on mute mode. Please go ahead. Yeah, so- We have always maintained that we will create a capacity of 15 million meters annually. We are almost there. We do see the operations commenced for the 15 million by this quarter itself or from Q4 onwards? From Q4 onwards, we will be comfortably manufacturing more than 1 million meters monthly, and whenever needed, we can easily expand this. Understood. We have reached the target where we wanted to reach. In next couple of months, we will reach that target. Understood, sir. My next question was, I understand if you can't disclose the third-party orders that you have been getting, but I just wanted to understand the proportion of the total order book the third party comprises of. The proportion will be much less because primarily our order is with the platform. There are very few AMISPs we are supplying meters, and there the order is only for the supplying of meters. So in terms of value, the proportion will be very, very less. So we can maybe take a ballpark of maybe 5%, 7% of the total order book is on a ballpark basis? I think 10% will be a safer number. 10%. Understood, sir. My next question was, we have a PM Surya Ghar, a policy of the government which has been focusing a lot on installation of solar capacity and residential houses. Just wanted to understand, since we do also manufacture net meters, are we also seeing any traction from that end, if any? We are definitely seeing a traction on net meters, but slowly and gradually, all these net meters will convert to smart meters, because smart meters have both the facilities. There is a traction in net meters, but that is very small period of time. I think most of these PM Surya Ghar will go for smart meters. Understood. So eventually we do see this coming into the NSGM itself, or do we see this as a segregated market going ahead? It is a segregated market. We are selling in the open market and sometimes there are a lot of DISCOMs which also buy it directly from us and then supply it to the people who want net meters. Understood, sir. Yeah, those were my questions. Thank you very much. Thank you very much. We have next question from the line of Pranjal Mukija from Growth Spear Venture Limited. Please go ahead. Hi. Am I audible? Yes, sir, you're audible. Please go ahead. Yeah. Thank you for giving me this opportunity. I actually have just one question, sir. Sir, if you could just break our current order book of INR 37,776 crores into the AMISP O&M work that you are doing and into the meter manufacturing. Can you just give us a split of this order book? Currently, I do not have the split of- Ballpark will also be fine, sir. Ballpark is Hello? Yeah. Ballpark, we have always maintained every year also that it is 45% is supply of meters and installation, around 30%. JK, this is not the question, I think, sir. Can you please again get the question? Should I repeat the question, sir? Yeah. I just wanted to understand the breakup of this order book into the AMISP O&M work that we are going to do over the next 8-10 years, and the meters that we are manufacturing and selling. I just wanted to understand the breakup between actual meters and the AMISP work. I think I understood it rightly, and this is what I was delivering. In that total order book, whatever we are supplying to the platform, that order book can be divided into three parts. Around 45%, 50% is the meter supplying and installation. 25%, 30% is O&M. These are different contracts at different pricing. 20%, 25% remains with the platform. This is how the breakup will happen. Out of this 31,776 order book, 90% is from the platform itself. Okay, sir. Got it. Thank you. That is all from my side. Thank you. We have next question from the line of Akshada Deo from Viva Commercial Limited. Please go ahead. Sir, I wanted to know more about the promoter shareholding. As I am noticing again that in this quarter end we have had some reduction in the promoter shareholding. I just wanted to know why. Basically, there is a reduction in promoter shareholding from last quarter. Promoters have brought in some new big investors like Nomura to better its shareholding list and all. Nomura just wanted to have some shareholding in the company, and they approached us and we found a very good name and very good investor who can be very useful to the company in future. We diluted some shares to them. Would that be the entire 3% almost? Sorry. What percentage of dilution? What percentage of shareholding? Total was around 3%. Okay. So all 3% was sold to Nomura? Basically, most of that has gone to Nomura. Okay. Are you planning on any more stakes sale? Not right now. Okay. Thank you. Thank you so much. The next question is from the line of Anurag from Multifive Wealth. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, the initial part of the call you mentioned that you are developing RF technology and HES technology. Could you just throw some light on that? If once that it is developed, could that lead to increase in margins? It is already developed, as I said earlier. Because of this, our manpower costs are increased or increasing significantly in last two quarters, and it will further increase in next two quarters because we are one company which is doing all the technologies being designed and developed in-house and implemented by us. HES is already getting implement, MDM is already getting implement. That is why there is an increase in number of people. Sir, as per my understanding, we are procuring our RF technology from Itron, if I'm not wrong. Genus is one company which is flexible. We work with everyone. There are customers who pay, like couple of our international customers, they want us to supply meters with our Itron RF. We are doing that. There are a couple of customers who want us to supply with a different RF technology, so we do that. In India, most of the AMISP projects which we are executing directly, we are using our own RF technology and our own cellular technology. Got it. On the second question, I've been hearing more about execution challenges at installing smart meters because there is some unacceptance from customers because we are shifting from postpaid to prepaid, and there have been some controversies regarding smart meters also. A lot of states have paused their plans. What is your view on the execution part? When can we see that pick up on a general policy level? How can government help us execute this better? Well, in bits and pieces these issues are coming and they were very well expected. Absolutely nothing unexpected. Because it's such a huge change happening in the country where all the meters on postpaid are converting to prepaid, all the conventional and electronic meters are becoming smart meters. There will be understanding gap from the consumer also. But there's a very strong drive from the government that it's a necessity. 99% of the consumer understands it. It's only 1% people sometimes they create some noise that because of smart meter is prepaid. There is a absolutely dedicated effort happening from the side of the central government, from the side of the state government, from the DISCOMs, from the AMISP, continuously telling the consumers the benefit of a smart meter. And one thing is for sure, a smart meter is a necessity not only for the DISCOMs, more than the DISCOMs, it's a necessity for the consumers. And slowly, gradually, these consumers are very well understanding it. And there has been a significant acceptance. But if you see Bihar, more than 5 million smart meters are being installed and almost 4 million are on prepaid. And they are running very successfully. And Bihar is supposedly one of the lowest intra per capita electricity consumption, but still it is more successful there. Slowly, gradually, you will see acceptance going everywhere. It is already there, but yes, there have been hiccups, it has been taken care of. But sir, as you mentioned, Bihar, the acceptance is there, but it also has a very high AT&C losses. So for states or unit territories like Delhi or Maharashtra or Gujarat, the AT&C losses are not that high. Are you seeing some challenges in these places? So far, if there is a consumer resistance, then it should be more in Bihar because the AT&C losses are very high, and once you install the smart prepaid meters, it reduces big time. So imagine you are answering your question yourself, where the AT&C losses are very high, still the acceptance of the smart prepaid meters has been there. So consumer is seeing the benefit. But I'm pretty sure it will be much easier in Gujarat and other parts of the country. Got it. Thank you so much for the answer. Thank you. Thank you so much. Participants, if you wish to ask a question, you may press star and one on your touchtone phone. We have next question from the line of Aditya Velikar from Axis Securities. Please go ahead. Yeah. Thanks again for this opportunity, sir. My question is with regard to water meters. Is there anything concrete you can share with respect to the recently launched ultrasonic water meter to Australia, its potential to get converted into order or revenue, and which can contribute to our top line? Currently, we are working on three to four projects globally on the water meter side. These are all very long gestation period projects. We started this journey, the news is coming today. This journey started almost three years back, and we are in the right path. The first lot has been accepted. We are expecting some good orders, but you will see the significant numbers coming from these projects after three to four years. It is not going to happen tomorrow. But yes, we are on the right path. We are very confident that water will become a very significant portion of our business in next three to four years. Anything on gas meter, sir? Gas meters, we are primarily focusing on the domestic market. We are a regular supplier. We are doing it from last two, three years. For gas meters, the product line what we have created and developed, we are focusing primarily on the domestic side of the gas meter. As I stated earlier also, gas meter business will be like what electronic energy meter for electricity we used to do. So it will be that kind. Even if it is smaller than that kind of normal market, which we also is an important player in the market, will continue to supply to all the gas companies. Understood, sir. Thanks a lot. All the best. Thank you. Thank you so much, sir. Ladies and gentlemen, we will take this as our last question for the day. I now hand the conference over to Mr. Jitendra Agarwal for closing comments. Thank you all for joining today's call. The progress achieved in the first half of financial year 2025 underscores our strong execution capabilities and the strategic initiatives we have implemented. With a robust order book, innovative solutions, and a dedicated team, we are well positioned to seize upcoming opportunities. Our focus remains on enhancing operational efficiency, extending our market presence, and pursuing new growth avenues in smart metering and related areas. We look forward to both the opportunities and challenges that lie ahead and reaffirm our commitment to sustained growth and long-term value creation for our stakeholders. If you have any additional questions, please contact HDA, our investor relations advisor. Thank you, everybody. Wishing again, everyone, a very happy and prosperous Diwali to you and your family. Be safe. Enjoy the holidays. Thank you. On behalf of Emkay Global Financial Services, that concludes this conference call. Thank you for joining us, and you may now disconnect your line.