Genus Power Infrastructure

CMP= Rs 24
Date= 16/11/2010
 Background
• Genus Power Infrastructures manufactures electronic
meters and other power control equipment.
• The company produces residential, industrial, substation,
agricultural, grid and group meters, inverters,
uninterruptible power supplies, and hybrid microcircuits
• Designs and constructs substations, transmission and
distribution lines, and electrification projects.
• Manufactures innovative power backup & power
conversion systems such as Inverter, Solar inverter &
UPS
 Figures as on 1/10/2010
• Debt to equity= 0.83
• Shares outstanding= 14.8cr (exclusive of 110 lakh warrants issued for
conversion @Rs19 for 1 equity share )
• Face value = Rs 1
• Cash in hand = Rs 30cr
• Cash/share = Rs 2
• Order book = Rs 750cr
• Consolidated EBITDA margin= 12%
– Range = 10.5-17% for last 7 years
• Consolidated PAT margin = 7%
– Range = 4-9.8% for last 5 years
• ROCE (TTM) = 17%
• RONW (TTM)= 16.9%
 Figures as on 1/10/2010
• BV/ share= Rs 22
• PAT (TTM)= Rs 56.25cr ( inclusive of a bad quarter when
production was affected due to fire at IOCL depot)
• EPS ( TTM) = Rs 3.8
• EBITDA ( TTM) = Rs 104
• Market Cap= Rs 355cr
• Market Cap to Sales : 0.5
• Sales (TTM) = Rs 705cr
• Sales CAGR = 39% (last 7 years)
• PAT CAGR = 50% ( Last 7 years)
• Sales/Gross Block= 7.3
• Dividend= 15% ( 15% also in 08 & 09 )
 Facts to be noted
• The company suffered losses to the tune of Rs 36.36cr
due to fire at neighboring IOCL depot in Jaipur last
year. The company has filed an insurance claim for the
same and the amount is due to be received this year
• The company has already increased its Meter &
Inverter/UPS manufacturing facilities to manufacture
65lakh meters & 6 lakh inverter/UPS respectively per
annum. This was necessary as the previous capacity
utilisation had reached close to 100%
 Information from source
• Major competitors of Genus are L&T and Secure meters (not
listed)
• Genus products are not of as good a quality as that of L&T &
Secure meters but are price efficient . Thus they are
preferred by the state electricity boards even though quality
lacks because if they select expensive L&T meters they can
be accused of buying high price meters for a bribe.
• Genus meters last for 2-3 years by which a new technology
meter is introduced in the market. The meters of L&T and
Secure meters last for around 5 years and hence adoption of
new technology takes time.
• Thus Genus has an advantage in states like Gujarat where
technology adoption is fast
 Fund holdings & other Important people
holdings ( as of September-09)
• Escorts
• Kotak Mahindra
• Ashish Dhawan
• Lata Bhansali & Talma chemicals( Enam
securities account)( QIP at Rs 550 per share)
• Mixon holdings ( Part of Bilakhia group)
 Recent developments in the company
• Genus Board has decided to sell the Jaipur unit of the company
which was affected by the fire at the IOCL depot at Jaipur.
• The company says in the notice of postal ballot that it had
launched the Kotputli unit in august in 2007 for manufacturing
of poles and distribution transformers. Genus has not been able
to achieve the realisation from this business as per its
projections and hence wants to sell this unit.
• Simultaneously it has also increased capacity at Haridwar plant
which is in a tax free zone. Thus it seems it has a strategy of
increasing capacity in tax free zone rather than re-investing in
Jaipur plant.
• Note: Genus at present has only 2 plants, one at Jaipur and
other at Haridwar.
 Recent developments in the company

• Genus paper products, a group company is

considering an IPO.