Q4 23/24

May 30, 2024

Summary

Q4 FY24 revenue rose 108% YoY and PAT 151%, while a >INR 21,000 crore order book supports the FY25 revenue target of INR 2,500 crore. Execution ramp-up, working-capital needs and guarantees remain key considerations.

Ladies and gentlemen, good day and welcome to Genus Power Infrastructures Limited Q4 FY 2024 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. As a reminder, all participant lines 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 Mr. Jitendra Agarwal, Joint Managing Director of Genus Power Infrastructures Limited. Thank you, and over to you, sir. Good evening, ladies and gentlemen. A very warm welcome. Today, Mr. Agarwal is unable to join us due to some medical emergency, so he is busy. With me in this call is our SGA, our investor relations advisor. The results and investor presentation are already uploaded on the stock exchange and company website. I hope everybody had a chance to look at it. Since July 2023, our company has consistently achieved remarkable success by securing a series of prestigious orders. The orders exceeding INR 16,000 crores are for the installation of more than 1.82 crore smart prepaid meters. The trust and confidence demonstrated by our clients is a strong testament to our dependability of our cutting-edge smart metering solutions. Our total order book, including all SPVs and GIC platform, has surpassed INR 21,000 crores as on date, indicating a promising outlook for future revenue growth. It is important to understand that the start of these orders typically requires a minimum of six to nine months from the time the order is received. This is due to extensive formalities that must be completed before starting these projects. Thus, we expect a revenue surge starting from financial year 2025, driven by the execution of our good order book. Operating profit margins are also expected to improve as operating leverage kicks in, along with the realization of economies of scale and continued cost management efforts. All these orders generally have execution cycle of 24 to 27 months, which provides a good visibility in the coming years. Coming to quarterly results, revenues stood at INR 420.1 crores, up by 108% as against quarter four financial year 2023 revenue of INR 202.3 crores. The robust order execution and ongoing expansion of the smart metering business is driving the growth. EBITDA stood at INR 65.4 crores, up by 104% as against quarter four financial year 2023. We have noticed a significant rise in employee costs and other expenses due to our ongoing efforts to expand our workforce and enhance our systems. This is in anticipation of meeting the substantial order book we have acquired. PAT stands at INR 31.4 crores for Q4 financial year 2024, an increase of 151% as compared to INR 12.5 crores in Q4 financial year 2023. However, the company's profitability in Q4 was impacted as a result of a substantial rise in financing expenses. This was a direct consequence of the company's requirement to offer supplementary bank guarantees in order to ensure the influx of orders. According to our evaluation, we expect a significant surge in our revenue from financial year 2025 onwards. This will be driven by a strong performance of our order book and a steady flow of new orders. We expect to record total revenue of about INR 2,500 crore in financial year 2025. With operating leverage kicking in, we also expect our operating margin to significantly improve. We maintain a very positive outlook regarding the substantial enhancement of our business operation in this financial year. We can now open the line for Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. 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. Our first question is from the line of Mohit Kumar from ICICI Securities. Please go ahead. Yes. Good evening, sir. Good evening. Congratulations on a very good set of numbers. My first question is, what is the status of go to live, go to live status of the existing order book? Can you help us with revenues and margin guidance for FY 2025? So, status of go to live is different for all the different projects. Every project is at a different stage. It is very difficult for me to specifically tell you as a whole where are we. We are very much within the timelines of the project. As I said earlier, most of the project takes minimum 6-9 months to come onto the ground. In almost every project what we have secured currently, we are already on the ground and most of the projects, the work has also started. Every project is in a different stage currently. As I have told earlier also, that guideline for this financial year, what we have given is INR 2,500 crore. Any margin guidances? 15%-16%. Understood, sir. The second question is, can you please help us with the opportunity size in upcoming where the tenders are yet to be opened? The related question is, will GIC help you bid for more than INR 3 billion work order of contract value? There is no restriction from GIC, that we cannot bid more than this value. That was the minimum criteria we built technically now, but that is not the limit. The projects which are upcoming or there are a lot of tenders which are under the different states, different status, few are already opened where we are L1. Few we have quoted, the status will be known in few months. Few will be quoted in next couple of months. Even in this financial year, we expect a good incoming of orders. Is it possible to quantify the L1 status, sir? L1. Currently, we are L1 in projects worth exact number, around INR 11,000 crore. Understood, sir. My last question, sir. What are the execution challenges? I assume that given that we are ramping up, we do need to hire people, right, to build those capabilities to execute this large order book. Can you just elaborate on it, what we are doing to ensure that we are on time and we are building PR within the cost. The good thing is, Keith, we are doing what we understand it very well. This is a metering business, which we understand. This is not the first time yet the scale has been much larger than what we have done it in the past. But the good part is we understand what we are doing. We are building, as I said earlier also, there is a lot of cost that has increased in terms of manpower, in terms of building the capability in the field, in-house, headquarters. A lot of investment has happened in last 12-24 months, which is visible in our salary expenses also. Currently, as such, we are not seeing any unrealistic challenge in the field, which is a very good sign. Almost 11-12 million smart meters are installed in the country. In country, in general, the acceptance by the public, by the utilities is very good. Rather, what we initially thought there will be some challenges, but we are working in Assam, we are working in Bihar. These are the two states where we are working very extensively. If you see the economic status of these two states, they are one of the in the lower side. Still, the acceptance has been very good, which is a very clear indication that acceptance of the smart meter is good. In general, unrealistic challenges are not visible in the field, so I am expecting a very good run rate picking up from this financial year. Understood, sir. Thank you. All the best. Thank you. Thank you. Thank you. The next question is from the line of Darshil Pandya from FinTree Capital. Please go ahead. Hello? Am I audible? Yes, sir. Please go ahead. Yes, sir. Congratulations on this great set of numbers, and we really would like to congratulate the management for delivering on the commitments. Sir, number one question would be on the tax guidance. You guided last quarter about 25% is the new tax regime. But since even this quarter, we are seeing more than 25% of the rate. What is the tax guidance and what is happening in this? If you can just quantify. Since Mr. Kailash Agarwal is not on the call, and I am somebody not very equipped to answer you on this, we will make a note of this question and we will make sure SGA will come back to you with a reply. Okay. No worries on that. And, sir, would it be a great question if I could ask you, what is the rationale behind incorporating so many companies? We have been seeing you, Genus Power, incorporating a lot of subsidiaries. What is the rationale behind it? This is how the bidding is to be done. If you see the SPVs, this is how the bidding is to be done, that you have to create every bid has to be a separate SPV. That is the only reason, there is no other rationale behind it. Okay, just for the bidding prospect, we are doing this. For the bidding prospect, yes. This is how we have found that different companies can have only one SPV, and they can bid in that SPV all the projects. We have taken a route of different SPVs for different projects. That is the only reason behind it. But once you start executing the order, every SPV has to be separate. So we are doing it during the bid itself in most of the cases. And, sir, what will be the debt cost for this financial year and debt position as on date? I would like this question to be answered later on by Mr. Kailash Agarwal. Okay. And sir, any guidance for FY 2026 or FY 2027? I am very positive on FY 2025. FY 2026 also will be definitely much better than 2025, but I do not want to spell any numbers so early. But yes, maybe three, four months or six months down the line, we'll give you a guidance on it also. All right. Okay. It will be definitely much better than what we will do this year. Okay, fantastic. I'll get back in touch with you. Thank you so much. Thank you. Thank you. The next question is from the line of Pratik Jain from Solidarity Investment Managers. Please go ahead. Hello? Hello. Yeah. Am I audible? Yes, please. Yeah. Hey, sir. Thanks for the opportunity. Sir, can you help me with the number? What is the system-wide meters installed in India as of today, and what is the target? What is your expectation that it will get installed by the next year? That is my first question, sir. Currently, I cannot give you exact number, but roughly what I understand from the market intelligence, almost 11 million meters are installed. Smart meters are installed in India over the period of, I would say, six, seven years when this journey started, which has picked up primarily in the last two years only. In this financial year, I personally believe that at least 60 million to 70 million smart meters will be installed. Got it. Also, the government had set a target of installing 25 crore smart meters. What is your realistic assumption that by when it can happen? My realistic assumption would be it will happen in next four to five years. Got it. Sir, one more question on the smart meter side. We have been hearing that the smart meters are being currently imported from China. Can you help me understand what percent of smart meters installed in India are imported from China, and what is the cost difference there? Currently, not a single meter is being imported from China, as far as I understand this industry. If I have to put any percentage in the historical data, maybe 0.05%. Got it. Okay. Thanks for this. Thank you. Thank you. The next question is from the line of Akash Vashishth from Future Generali India Life Insurance. Please go ahead. Hi, sir. Thank you for the opportunity, and congratulations on a good set of numbers. My first question to you is, other expenses this quarter have gone up by about 30 odd crores sequentially. I just wanted to understand, what will be the trajectory going forward? All these expenses are including my commentary. Also, I made it very clear that a lot of investment is happening in building up the projects. Initial investments are generally very high Okay in terms of manpower, people, offices, other expenses. A lot of expenses have happened initially, and lot many projects are going to start in next 2-3 quarters. These expenses will continue, and once we will start getting the revenue, they will get compensated. Can we assume that the current run rate of about 75 INR, 80 INR odd crores, which we have of other expenses which you have done this quarter, is going to roughly remain in the same range? It is not going to increase incrementally going forward from here? I would say yes. To a very large extent, yes. Okay. Thank you for the clarification. My second question is that, we have done an EBITDA margin of around 13 odd percent this quarter. Yes. But if I see the segmental reporting, the EBIT margin in the metering businesses is roughly around 16 odd percent. Just wanted to understand what has been a drag on the console number. Somehow, I am not able to figure out the maths behind it. So as you see, there is a lot of investment happening on the ground for the projects. Right. Currently, there is an industry, there is a metering business, and then there are projects being handled simultaneously. A lot of these things will become common once you will see projects happening continuously in future. Okay. My last question is, which major states, if you can help us guide, which major states are left which are expected to place order in the near term? I think the major states which have still not went into the smart meters are Tamil Nadu, Karnataka, Rajasthan, Haryana, Punjab. These are the major states which have still not Some have already come out with the tenders or some have already on the process of, but they have not started the journey. These are the major states which have not started the journey. Okay. Thank you, sir. Thank you. Thank you. The next question is from the line of Chandresh Malpani from Niveshaay Investment Advisors. Please go ahead. Thank you for the opportunity, and congratulations on this good set of execution. Sir, my first question pertains to the execution on ground level. What I understand is that Genus sells to its platform the majority of its meters. Trying to understand what is the execution on ground, because our receivables as at March ending is close to INR 580 crore, which is more than this quarter's sales. Trying to understand if the platform is able to execute and receive receivables on their side. How is it happening on ground, sir? The receivables consist of the meters what we supply to the Electricity Boards, which we have been doing in the past. And platform has to do nothing. All the EPC contracts from back-to-back basis are given back to the Genus Power. There is no execution which has to happen, which has to be done by the platform. Everything has to be done by Genus Power only. Execution on the ground level, as I said earlier also, it takes its own time and so many systems being built, integration with the current billing system, integration with the HES, MDM, which is there on the ground. There is a lot of work which happens in first six to nine months. Meters are being sent, they are installed, then the FAT happens, then SAT happens, all this takes a fair amount of time. You will see when you are seeing the outstanding, one is the historical outstanding, which is for the meters being supplied to different state utilities, which has been historical past, and some meters which are being installed in the field, but not billed yet because of the system integration. Just an out- If you see, outstanding is almost similar the way it used to be in the earlier years. But sir, out of this total outstanding, how much would be utility based on? What we understand is that Genus has transacted in this way that it will only be a sole supplier of meters. So whenever the meters are being supplied, it will book the revenue to the SPV and SPV will pay Genus in, say, 45 to 60 days. Is my understanding right, sir? It is absolutely right, but Genus will supply the meters, Genus will install the meters. Once the SAT is done, then platform will pay that to Genus. So for Genus it is like a CapEx business. Okay. So, it's not- Genus will supply the meters and platform will pay us. We have to install them also, we have to system integrate also. Once the operation go live happens, platform pays the money to Genus. Okay. Got it, sir. Secondly, on this opportunity side, trying to understand, government has tended out some 25 crore meters, but recently we also see that there is a concept of net metering getting traction. This will open up another opportunity or how should we see this, the opportunity side, sir, basically for our industry. Every smart meter is capable of doing the net metering. But the only thing is because net metering is scattered where these both are not clocked. So initially, what I believe is next two years, there will be some duplicate also that will happen. There is a lot of places smart meters will be installed afterward, but net meters will be sold this year or next year itself. So some duplicacy will happen. Okay. And sir- Net meter cannot do the job of a smart meter, but a smart meter can do the job of a net meter. Okay. Got it, sir. And sir, lastly, again, on the execution challenge, we see that some states like Gujarat are facing protest from the customers complaining about the higher billings when smart meters were installed. They also taken the step back and said that firstly it will be deployed in their government offices and then the execution at the customer level will start. So sir, do we see any challenges on execution? Your view on this, sir. This is absolutely a normal situation. I'm not finding it crazily abnormal. If you go back to the history, when electronic meters were installed in the initial days of 2002, 2003, there was some agitation in some pockets of the country. You are seeing agitation in the pocket of Gujarat, where not even 20,000, 25,000 meters are installed. But we have not seen any agitation in Assam, where more than 2 million meters are already installed. We're not seeing any agitation in Bihar, where almost 4.5 million meters are installed. We're not seeing any agitation in U.P., where almost 2.5 million meters are installed. So it is in some pockets, sometimes. Somebody has created an issue, and sometimes Electricity Boards will also take a little linear view. "Okay, we will do it like this," so that they take care of their consumers, the problem is mellowed down. These are very normal. I'm not finding anything obnoxious in whatever is happening in the street. Okay, got it, sir. Thank you so much. Thank you. Thank you. The next question is from the line of Akash from Dalal & Broacha. Please go ahead. Sir, congrats on the good set of numbers. Thank you. Yeah. Thanks for the opportunity. My question is, if I were to segregate my INR 21,000 crore order book as of today, how would you split it? How much would be for supply, how much would be for installation, and how much would be for maintenance? Just a broad breakup. This INR 21,000 crore is approximated order book of the whole company. Correct. In time, this will remove around INR 1,500 to INR 2,000 crore is the supply orders from the different customers, utilities, supply tenders, what we win from our existing business, what we used to do earlier. Around INR 19,000 crore, and I'm giving a very approximate number. Don't hold me that I can be absolute. Yeah. Broad figure, sir. Yeah. Broad figures I am giving you. 19,000 crores is from the platform. This 19,000 crores will go to the platform, and almost 75% will come back to Genus. This 19,000 crores includes of all the SPV, BITCO orders, everything. Currently everything is with Genus, and then it will move to the platform. Then platform will again give EPC contracts to Genus back. It will be almost 75%-80%. But out of that INR 19,000 crore, how much will we get for supply and how much will we get for? Maintenance will be taken care of by the SPV itself, the platform itself, right? Maintenance will be taken care. Again, everything will be done by Genus. You can broadly break it like this. Out of this INR 19,000 crores, 80% will come to Genus. Okay. Okay. From this 80%, let's make this 80% at 100%. Then 50% of that 100% would be on supply, around 20% will be installation, and around 30% will be O&M, operation and maintenance. This is broadly you can break it. Somewhere it can be 25, 30, somewhere it can be 40, 30. Okay. It depends on the project to project. This is a broad breakup. That's 50% on supply and 20% on installation. 70% of that money, we should be able to book it as soon as we have delivered the meters, right? We have delivered, installed, integrated, and operation go live has happened. Correct. So that 70% out of that- Around 60%. Sorry that is very low. Okay, 60%. Okay, so 60% we should be able to book in the next 2-3 years. Am I right? Yes, to a very large extent. Sorry? Yes, for the order book to that amount. Am I understanding it right? Hello. Hello. I can hear you. Yeah, it's okay. Sorry to interrupt. Akash, there is a lot of disturbance coming from your line, sir. You are using Hello speaker mode. Can you use a handset, please? Hello? Yeah, I can hear you. Hello, is it better now? Much better. Good. So good evening, sir. I am just trying to sum it up, whatever you explained it to me. Out of the INR 19,000 crore, around 80% will come back to Genus from the platform. 75% to 80%, I can say. Yeah. Around 60% will be for supply and installation. That amount, we should ideally be able to book in the next 2-3 years when we will be installing the maximum number of meters, right? Yes. Okay, sir. Thanks. Thank you, sir. Thank you. Thank you. The next question is from the line of Ashwani Sharma from Emkay Global Financial Services. Please go ahead. Yeah. Thank you, gentlemen, for the opportunity, and congrats for a great set of numbers. My first question is on the opportunity on the other platform. How is the inquiry pipeline, if you can give us some sense? We have a good inquiry from almost all the major AMISP players. We are supplying meters to IntelliSmart, we are supplying meters to Adani. A very good pipeline. Any number you would like to put, sir? Currently, from different AMISPs, we have an order book of more than INR 1,000 crore. Okay. Sir, the way the things have started moving in the smart meters in the power space, how do you see opportunity in the smart meters in the gas space? Your comments. We are already doing gas meter. Gas meter is more like a conventional meter, what we used to see in the electricity. Cannot see lot of gas meters converting to smart. Most of the gas meters currently are, I would say, conventional electricity meter types only. But few city gas distribution companies have taken a decision that we want to go with the prepaid gas meter, but there are very few of them. Prepaid gas meter has a good opportunity, but more like a conventional electricity meter. Is there a price difference or anything, any technology difference in this? Because of the cost only, most of the city gas distribution companies currently are going with the conventional gas meters. Okay. Sir, the other question is a bit on a long-term basis. Over the next four, five years, what is our aspiration as far as revenue is concerned? I understand in FY 2025, you might have INR 2,500 crore of top line, which you are guiding for, and some growth in FY 2026 as well. But over the next four, five years, what is our aspirations as far as revenue is concerned? I do not want to number on the aspiration. One thing is, we are developing multiple lines correctly. It is not that we are only focusing on the electricity meter. Though, yes, this is the most important focus area for us. For the long run, we have done some work in the gas meter business, and now we are well established gas meter. Same way, we are already working on the water meters. We will be seeing Genus playing a fairly good role, not only in India, international markets also in the water meter. Same way, we have done a lot of investments in last four to five years in our international marketing development. Last year also, we did exports of more than INR 100 crore, and this year also, we expect to do at least INR 100 crore-INR 150 crore. We have been developing these business modules also, apart from the smart metering, which is seeing a major surge currently. I think we have to understand one more thing, smart meter. Two things that will keep driving the smart meter business also. One is new connections. They will not be this significant, yes, but some numbers will keep coming over the years. All the smart meters have a life at the end of the day. It is not that you have installed a smart meter and now you are done for 15, 20 years. There will be a lot of business that will keep coming after a certain period of time, after 10 years, because the contracts are over. This is how we see our future. Great, sir. Thank you very much for your answer. Thanks. Those are my questions. Thank you. The next question is from the line of Jay Shah from OHM Portfolio Equity Research. Please go ahead. Hello, sir. Thank you for the opportunity. Sir, can you just explain the whole trade payments and working capital cycle? Like for instance, when you bid for an order, how much advance do you get? As and when that you supply, what are the receivable days in that case? Is there a retention element, and how long does it take to get that money back? Thank you. You have asked a very loaded question because every project is different in itself. Few basic things I can tell you, most of the projects doesn't have advance payment. The business that we are going to do is primarily for the smart meters through platform. That will be a CapEx business for us. Where we supply the material, we do the installation, and once operation go-live happens, we get paid within 45 days. Typically, if you see our business, it's always been a working capital intensive business. Next 6 to 12 months, I continue to see that because projects will come on the ground, FAT, SAT will open and then money will start flowing. But next year onward, I'll definitely see the working capital intensity getting better for Genus. Otherwise, it is a working capital intensive business and remains like that. So the average working capital in terms of receivables and inventory would still be around 4 to 5 months? It is generally five to six months. If you see our current balance sheet, it will be quite visible. I see this improving from this financial year, in the later part of this financial year, because the business model is changing in a big way. Right. Is there any retention element? No, there is no retention element. Every project has a performance bank guarantee. Okay. The bank guarantee is there for how many years? It is there till the contract runs. If they are signing a 10 years contract, it is there for 10 years. Okay. How much of non-bank funded limit that you need to do this kind of business, turnover of INR 2,500 crore? Give an exact number, I can't. Yeah, roughly. Roughly, generally the performance bank guarantee is around 3%-5%. If you take order book of, let's say we have done the order book of INR 20,000 crore, we need a 3% performance bank guarantee, it is already being submitted to the Electricity Board. Already we have exposure of more than INR 600-700 crore in terms of the guarantee. Exact numbers, I will ask SGA to surely share it with you. That is very helpful. Going back to the CapEx, roughly, how much would be a CapEx for a typical order size, if you can give us an example. CapEx in what sense? Can you- You said that most of these things are CapEx intensive. Did you mean working capital CapEx in that case? Working capital. Okay. That's all. Thank you very much. Thank you. Thank you. The next question is from the line of Abhijeet Purohit from Kavirat Securities Private Limited. Please go ahead. Yeah, hi. Good evening, sir. Am I audible? Yeah. Good evening. Yes. Yeah. Sir, firstly, congratulations on really strong set of numbers. I wanted to know that after the implementation, there will be a lot of maintenance and updates and troubleshooting that might be coming our way in smart meters. How do we plan to support that infrastructure going forward? There will be a proper O&M team which has to manage these meters and this is not something we are doing for the first time. Currently also, as on date, we have half a million meters installed in Rajasthan for which O&M is done by us. All these smart meters, operation and maintenance once they're installed, further for six to seven years, everything will be done by us. Okay. Also, sir, I wanted to know a broader picture from you, since there are very optimistic environment that we can see for smart meters going ahead. Do you see or do you think that there might be some other strategic partnerships like GIC coming our way going forward? Currently, for Genus, we are not seeing anything. We do not need it. We have an exclusive tie-up. GIC and Genus have created a platform which is exclusively working for each other. In the industry, I do not know more platforms that I am not seeing anything currently. Okay. Sir, that is it from my side. Thank you so much. Thank you. Thank you. The next question is from the line of Vignesh Iyer from Sequent Investments. Please go ahead. Hello, sir. Thank you for the opportunity. My first question is, I am trying to understand, say in a normalized year, how many meters can we install in a year, as in a capacity of installing N number of meters in a year? There is no capacity to install the number of meters. There is no practical way to find out any capacity, how many meters can be installed in a year. But I expect in this financial year, the country will install at least 60 to 70 million smart meters. That is my expectation. Okay. As in for our company, we can scale it quite easily if we decide on to install a higher number of meters, right? Yeah. Installation capacity depends on the number of people and the number of circles we are working. Yes, it is expandable. You don't need any CapEx to expand this kind of capacity. Okay. Got it. Right. I just heard your commentary earlier, where one of the investors asked about supply plus installation. You said, after supply of the meter and installation are delivered and operated, you get around 60%-65% of the total money. The rest I'm assuming is O&M that is spread over the number of years of contract? Yes. That is, I mean, equally divided over the years, right? Yeah, that is equally divided over the years. Okay. If I understand it right again, you told that it is anywhere between 24 to 30 months for any project that is awarded to be executed, right? Yes. Execution period is anywhere from 24 to 30 months, and thereafter you have to maintain it for 6 to 7 years. Okay. So everything inclusive, it is total 10 years, right? Everything inclusive, it is total 10 years. Okay. Got it. Right, sir. That's all from my side, and sir, all the best. Thank you. Thank you. The next question is from the line of Smita Mohota from Kredent Infoedge. Please go ahead. Yeah. Hello, am I audible? Yes, ma'am. Please go ahead. Okay. Basically, I wanted to ask one thing. As the management said that they are looking at exports, going ahead in next 5 years, on the revenue front, what percentage of revenue are you expecting in exports, and what is it of domestic? Second, Nepal, as you said, for O&M it's 10 years. Margin perspective, if we want to understand. O&M has a better margin or the smart meters installation has a better margin? The last question would be that are we manufacturing smart meters? We are sourcing smart meters from somewhere, and if we are sourcing, we are sourcing it from whom? These are my three questions. First of all, we expect our export to grow significantly, but I'm not in a position to signify any number currently, say 5 years down the line where we will be. Yes, there's a lot of investment and focus from the company side is going on the export market, which is visible from our results also in the current quarter. But I don't want to number anything, what will be the situation in 5 years. Question number one. Question number two, in terms of margins, definitely O&M is comparatively better than the supply and installation, so we maintain the same. Genus is a smart meter manufacturer, so every smart meter installed by Genus is produced by Genus. Okay. Thank you. Thank you. Thank you. The next question is from the line of Darshil Pandya from FinTree Capital. Please go ahead. Hello, sir. Sir, just wanted to confirm our current capacity and are we expanding capacity because you have mentioned in our press release as well? Currently, comfortably we produce anywhere from 1 million meters monthly, and we are adding up some capacity in our Guwahati plant. So we will reach to a comfortable level of 1.5 crore electronic meters every year. Precisely, should be around 30 million capacity, that is what we are adding. We are adding around 3 million meters capacity. We currently do around 1 million a month, and then we'll comfortably do 1.5 crore per year. Okay. Yes, enough. Thank you. Okay, got it. Yes. That's it. Yes. Thank you. Thank you. Thank you. The next question is from the line of Rishabh Garg from Sanjay T Family Office. Please go ahead. Thank you for the opportunity, sir. The smart metering opportunity in terms of next four to five years, as you mentioned, and post that entire country should have the smart meters, right? I want to understand what would be the business plan once all the smart electric meters are installed in the country, right? Because the replacement cycle will also take some time to come. So what are the other revenue opportunities that will help us in maintaining the revenue run rate, which we might have by the fifth year end, let's say INR 3,000 crore? I understand that you mentioned about smart gas meters, smart water meters, and export. Would like to understand what is the market size, target addressable market for us in the smart gas meters, in India, smart water meters. Also, what kind of export opportunity we actually see for all such kind of meters. Because, in the export, I understand that we would only be selling the hardware device and not be earning any money from the installation and operation and maintenance. So how does it work, sir? Export market, as you rightly said, will be focused on as a hardware and a solution provider, and currently we are working in four or five very fairly large opportunities in different parts of the world. Which is our focus area. To put a number, see how much is the addressable market in terms of gas meter in India, yes, we can see some 8-10 crore gas meters should be sold in the next 7-8 years. That will be a good market for the domestic side. When it comes to international water meter market, we have just entered into that. That is our long-term vision. In domestic also, we expect a water meter segment will take a very big boom in 2-3 years. We are developing ourselves as a strong water meter player for domestic market also and for the international market also. We are working on multiple opportunities currently to make sure that 5 years down the line, 6 years down the line, once we don't see such a surge in the smart electricity meter, that our revenues are being maintained. Multiple avenues are being worked upon export market, water meter market, gas meter market, and of course, our O&M will give us a fairly good amount of business year on year and electric meter in the country. Electric meter is not going to finish. It's not that once all the smart meters are installed, there will be no new connections or no new meters will be required. Yes, the numbers will be significantly low, but it will have some numbers to take care of. Currently, I can't give you exactly, yes, but there are multiple opportunities we are working upon that, and we have a good 4-5 years ahead of us so that we can plan better and we make sure that we are there to achieve. We don't let the numbers go down significantly once this opportunity goes. Okay. What is the life, in terms of years for the smart electric meter and gas meter? First question. Second, on the smart gas meter side, what is the unit value of each smart gas meter? Would it also have 50% value attributable to the hardware device and 20% and 30% attributable to the installation and O&M? We are not doing anything related to O&M. We are a pure hardware supplier currently, which hovers around anywhere from INR 200 to INR 1,500 for a normal gas meter. A smart gas meter is around INR 3,000 to INR 3,500. But mostly in India, normal gas meters are being sold. That is one thing. Secondly, in terms of What was your second question? Sorry. What is the life of both the kinds of meters, smart meters? Life of a gas meter is guaranteed for 3 to 5 years. The smart meters are guaranteed for 10 years. That is the life of these meters. Because with these smart meters, there are a lot of components which are perishable, like batteries, capacitors, so many things in the smart meters that into 12 years down the line, the smart meters have to be replaced. Okay. Smart gas meters, the margins also will be around 15% EBITDA margin, or it will be lower? Because you are only selling the hardware. It's like a hardware. It will be very difficult to spend any number right away. No, it's okay. On these smart gas meters, with your current capacity that you have, I understand you have 10 million existing capacity. Can you make For the electronic meters, gas meters currently we do around 40,000 to 50,000 meters a month. You would need to build another capacity for the smart gas meters, right? Yes. How much does that capacity actually cost? Can you give an idea on how much, let's say 1 lakh capacity, how much does it cost for CapEx? Again, I don't have any perfect numbers in my hand currently for the gas meters you are asking. It's not, again, a very CapEx industry. Okay. Just last question on the export side. When we sell all these hardware devices, so around 50%, to what I understand, is attributable to the hardware device. What are the kind of margins that we have here? What other countries are actually, in the future might go to the smart metering opportunity which we are doing right now? Any idea on that? When it comes to smart meters across the globe, every electric point will become smart over the period of time. Almost every nation in the world is going for smart meters. What is there, and we are a hardware supplier to the world currently. We are not doing any O&M work to any customer right now. Right now, the way we used to do three years, four years back in India, we used to supply meters, then give the guarantee of the meters. Same thing we are doing out of India currently. What kind of a unit value for the export and the EBITDA margins for when we export these hardware devices? Again, it is a custom-built product. We sell meters anywhere from $50, $60 to $400, $500. Depends on the product. It's a very customized product. And margins? The export margins are comparatively better than the margins over 100. So I can assume around 15% on hardware devices? You can. I get. What do you think, sir? Because, like I said, they are better than us in the domestic market. All right. Thank you so much, sir. Really appreciate your time and effort. Thank you. Thank you. The next follow-up question is from the line of Akash from Dalal & Broacha. Please go ahead. Yeah, thanks for the repeat opportunity. One question on the PAT margins front, sir. Basically, sir, currently, one is the finance cost, and secondly, our losses from the JV entity have diluted our PAT margins quite significantly. How would be the trajectory for those two line items going forward for FY 2025/2026? I am not equipped to answer this question. We have noted down your query, and I will ask CA to reply. Okay, sir. Akash, do you have any further follow-up questions? No response. We will move on to the next question. The next question is from the line of Chandresh Malpani from Niveshaay Investment Advisors. Please go ahead. Sir, thank you for the follow-up. Sir, my question is on the communication technology. We install our meters either with cellular or RF technology. The data suggests that the advanced economies in the world have been successful on using the RF technology. Sir, is there something different in India because of its density or the geography that cellular will also succeed, or just your opinion on this, sir. Personally, I do not agree to this data that advanced economies have successfully done only RF. Across the globe, both RF and cellular, depending on the place, situation, network availability, are successful, and same will happen in India. You will see a lot of places cellular are successful. You will see a lot of places RF is successful. Practically, whether it is India or across the globe, it will be a hybrid solution that will work. Okay, sir. It depends on the area by area. Absolutely. Okay. Got it. Thank you. I think we can take a couple of more questions. Sure. The next follow-up question is from the line of Smita Mohota from Kredent Infoedge. Please go ahead. Thank you for giving me the opportunity again. So, in the current results, we see that you have a JV of 26% on the major order book which have been reported by the company in the results. So why is this JV volume so low as of 26%? Can you just explain the working of this order of 26% from the entire order book? Because majorly, your JV, which is taking away the order, and only 26% is coming to Genus. It is not like that. JV means the platform. All the orders are moved to the platform, and then platform gives the EPC contract to the dealers, and which is around 75%-80% of the value. The 26% is the investment of Genus in the platform. Okay. Got it. Thank you. Thank you. Thank you. The next question is from the line of Rishabh Garg from Sanjay T Family Office. Please go ahead. Sir, just a follow-up to ask one thing. On the smart gas meter side and smart water meters that you mentioned, what is the stance of the government? Are they also planning to get the smart meter installed in the next five years across the country? Any stance from the government side you have on this? On the gas to city gas distribution is very clear, and the government has a clear mandate that every household, every gas connection has to be pipelined. We expect the opportunity of around 8-10 crore gas meters to be sold in next 7-8 years. On water meters, on the ground, some work is happening, but nothing significant, which I can substantiate as of now. Whenever these gas meters get installed, it will be the smart gas meter and not the normal gas meter, right? It will be both. Currently, India mostly is on normal gas meters which are being installed. Mm-hmm. All right. Thank you so much, sir. Very good insight. Thank you. Ladies and gentlemen, we will take that as our last question for today. I would now like to hand the conference over to Mr. Jitendra Agarwal for closing comments. Over to you, sir. Thank you all for joining this call. We are grateful for the diligent efforts and unwavering commitment of our team members who have made these achievements possible. As we persist to solidify our position in the smart metering industry, we are fully dedicated to upholding our core values of innovation, sustainability and customer satisfaction. We are looking forward to the prospects and obstacles that awaits us. If you have any additional questions, please contact SGA, our investor relation advisors, they will make sure you get your reply. Thank you very much. Have a good day. Good evening. Thank you. Thank you. On behalf of Genus Power Infrastructures Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.