RR040120168 e 35 F

INITIATING COVERAGE BUY CMP:: `56/- 04TH JAN 2016
Genus Power Infrastructures Ltd.
Nifty 7,963.20
SUMMARY
Sensex 26160.90
Genus Power manufactures High end Programmable Multi functional Smart
KEY STOCK DATA Electronic Energy Meters with in built advanced security & anti tamper feature,
Market Cap (` Crs.) 1,437 AMR enabled meters, Industrial/Sub station/Agricultural/Audit Meters, Group
52W High/Low 58.90/20.40
Meters, Grid Meters, Pre-payment
payment Meters, Digital Panel Meters, Distribution
Distributi
Transformer Metering System. Genus also undertakes turnkey Engineering &
Bloomberg GPIN
construction in T&D of power sector.
Shares o/s (crs.) 25.67
3-m daily average vol 200000 INVESTMENT RATIONALE
Seriousness of Government towards
owards power sector reforms & UDAY provides
SHAREHOLDING PATTERN higher visibility and sustainable increasing demand for Smart Energy Meters
Promoters 50.58 over next many years The weakest & loss making link in Governments agenda of
FIIs & DIIs 0.39 24x7 power for all are Discoms with accumulated losses to the tune of `3.8 lakh Cr
(as on Mar15) and running losses of around `60,000Cr/year
` at National level
Public & Others 49.03
requires urgent and permanent solution/ action for bringing the financial stability of
Discoms failing which the Power for ALL: 24x7 will remain just a paper dream.
COMPARISON CHART
Apart from enabling Discoms to increase power tariff quarterly/periodically,
quarterly/periodically
60 Genus Power NIFTY 10000 enabling reduction in cost of power, budgetary discipline, reduction in i interest cost
50 etc; the most important aspect of this reform
eform is to bring in operational
efficiency.
9000
40 The operational efficiency is mainly driven by reduction in AT&C losses which are at
30 8000
~25%+ on National levels, s, however, varies from 15-70%
1 among different states.
20 7000 The losses include operational losses, theft of power, billing & collection inefficiencies,
inefficiencies
Mar-15
May-15
Sep-15
Jan-15
Feb-15
Apr-15
Jun-15
Jul-15
Aug-15
Oct-15
Nov-15
Dec-15
Jan-16
incorrect metering etc.

This reduction in AT &C losses is targeted to 15%% at aggregate level by 2019 and
can be achieved mainly by right tamper proof oof metering starting from distribution
transformers to consumers- both residential and commercial/Industrial.
commercial
This calls for replacement of all the mechanical meters across users by smart
SUMMARY FINANCIALS electronic tamper proof meters as soon as possible.
(` mn)
PARTICULARS FY 14 FY 15 FY 16E FY 17E Also, with difficulty
iculty in timely collection of meter reading & higher man power cost, the
world is moving towards wi-fi fi based smart meters and prepaid smart meters.
Revenues 7655.2 9150 9737 11853
PAT 604.6 531.2 1114 1483 It is expected that potential saving will be around `57000 Cr if AT&C losses are
EPS ( `) 2.36 2.07 4.34 5.78 down to ~15% nationally. This calls for about ~ 3 Cr meters to be replaced on
P/E(x) - - 12.90 9.70 priority basis over next 2-3
3 yrs. In addition, we feel that SEBs
SEB will continue to replace
EV/EBITDA(x) 17.1 14.2 8.7 6.7 all electro-mechanical
mechanical meters simultaneously and all new connections will be with
Debt / smart meters.
0.7 0.6 0.6 0.5
Equity(x) Genus power is having
ing a market share of more than ~35%+ in this space and their
ROCE 20% 22% 26.6% 27.2% products are approved by all the Discoms in the country.
country
There are 3 main manufacturers in the country having market share of more than
85%. They are Genus power, L&T and Secure meters.
meters
Genus power has manufacturing plant at 3 locations
1. Haridwar
2. Noida
3. Jaipur
The company has fully integrated designs and manufacturing facilities starting from
moulds, PCBs to complete assembly along with testing facilities.
facilities
The total capacity of the company is around 80 Lac meters/ PA on a single shift
basis.
Jaisheel Garg
Once all Discom sign up under UDAY,
UDAY, we expect substantial orders flowing in for
Tel: +9122-6146 2974
Genus power, which is expected from 1Q FY 17. These will be in addition to ongoing
jaisheelgarg@way2wealth.com
demand of regular orders from Discoms both
th under public sector and private sector.
Way2Wealth Brokers Pvt. Ltd. (CIN U67120KA2000PTC027628) SEBI Rgn. No. : Applie
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No. 14, Frontline Granduer, Walton Road, Banga
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arch is also available on Bloomberg WTWL <GO>
Initiating Coverage
January 4th, 2016
Exports though at nascent stage currently provides big opportunity in smart

meters Company is currently exporting ~ `10 Cr worth of meters mainly to African
countries. Their products are also approved in European countries although the
exports to Europe may take few years to start. Word-over
Word the governments are
recognizing energy efficiency and moving towards smart energy meters. We expect
going forward, exports can become reasonably good opportunity for Genus power
and the export can contribute to around 8-10%
% of sales by 2018-2019.
201
Scaling down of T&D business will help increasing Operating margin forward
The Company has
as small EPC business in T&D segment whichwhic is impacting overall
margins. We understand that company is focusing on very selective orders with
assured payment & double digit margin from this segment.
Further, with rising product business, this segment will become smaller in the overall
turnover of company leading to improvement in operating margin which we expect to
be ~20% + from FY 17E onwards.
Smart Gas meters After moving towards direct subsidy of LPG consumers in their
bank account, Governmentt is eventually proposing to move towards pipe gas across
tier1 to tier iii cities over next 6-8 yrs. The intention of Government
Gov is very clear to
avoid using LPG cylinders which requires multiple handling and is hazardous. Every
piped gas connection requires Gas Metering, wherein, Genus Genu Power has already
developed Smart Gas meters and obtained approval from GAIL & other agencies.
This could be another opportunity going forward and likely to kick in from FY18
onwards.
Solar power & net metering Governments thrust on renewable energy to become
a significant portion of power generation recommends large investment in solar
parks, Roof Top solar power generation and wind energy farms.
With approving sale of power from Roof Top solar power generation to grid,
grid Net
metering to compensate for power sold also requires smart meters. This too can be
incrementally a good opportunity for smart meters.
Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) and Integrated Power
Development Schemes (IPDS);; A major step by the governmentg towards
improving SEBs efficiency- Understanding the current financial condition of SEBs,
central government has launched two schemes viz DDUGJY
DD and IPDS with a capital
outlay of `440 bn and `326 bn respectively.
SEBs are offered subsidy under the schemes towards replacement of consumers
meters, installing new meters at each & every distribution transformers etc with target
of reducing the AT&C losses and audit of energy use.
Thiss we believe will help SEBs with initial capital to undertake smart meters
installation enabling Genus Power to lower its Debtor days and in turn Working
Capital requirement along with rising turnover.
Also, we expect companys operating cashh flow will be positive from FY17E onwards.
KEY RISK
o Any Delay in Discoms ability to reform and install meters can impact growth of
genus power.
o Delay in receiving payment from Discoms could impact operating cash flows &
hence borrowings.
o Company has given loans to the tune of `42 42 Cr to associate/promoter group
companies, which management is promising to reverse by FY 17E.
17E
OUTLOOK AND VALUATION
With UDAY in place and utmost likelihood of all SEBs/Discoms undertaking
structured reforms towards permanent solution in improving operational & financial
efficiency, we believe installation of smart meters is MUST at all levels, wherein
Genus power is rightly placed, having products to meet every
e Discoms requirement
and with sufficient manufacturing capacity in place. As per our estimate, the stock at
CMP of `56 is trading at P/E (x) of 9.7 for FY 17E on an EPS of `5.78 for FY 17E.
The stock is attractively valued and we recommend investors may BUY with long
term view.
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COMPANY BACKGROUND
Genus power Infra which was earlier M/S Genus Overseas Electronics Ltd is a company
incorporated in 1992 with the purpose of manufacturing of thick film Hybrid Micro Circuits
(HCM) and Surface Mounted Assemblies (SMA).
Initially the company carried on trading of computers, however, to adhere to main object of
the company implemented ed the HMC/SMA project. AllA computer trading activities were
discontinued from April 1993 and industrial land was taken in industrial area at Sitapura,
Jaipur to cater to the requirement of Telecommunication, Automobile , Informatics, Medical
electronics and Instrumentation sectors.
During 2006-07,
07, Companys name has been changed from Genus
Ge Overseas Electronics ltd
to Genus Power Infra Ltd. Also, the company entered into a Joint venture with Mobix, a
Brazilian company who were one of the leaders in communication technology to cater to the
demand of electronic meters in Latin America,, Africa etc.
etc This transaction involved a total
investment of ~US$ 15 mn.
In 2008, Genus power Infra Ltd, GPIL ventured into supply of Electronic energy meters and
execution of Turnkey Power Distribution Projects business. Later in 2010, Genus power Infra
launched solar hybrid inverters and splits its Face value of shares from `10 to `1.
In 2012, company launched smart meters successfully. Also, during the same period Genus
group undertook a group restructuring
turing exercise with an objective to create a pure play
power infra company i.e. GPIL and paper business i.e.
i.e GPBL.
As per the restructuring, GPIL will house the power infra business including its metering,
power T&D D management products and power backup solutions business and the resulting
company Genus Paper and Boards Ltd (GPBL) will house the paper and board business.
Further, the share exchange ratio for the restructuring exercise was fixed as:-
as:
1. For merger 24 equity share of Re 1 each of GPIL for every hundred shares of Re
1 each of Genus paper Products Ltd (GPPL)
GPPL)
2. For demerger 1 equity share of Re 1 each of GPBL for every 1equity share of
Re 1 each of GPIL.
Post restructuring , the issued and paid up share capital of the company increased by 97.71
mn equity shares i.e. from 158.9 mn to 256.6 mn equity shares of Re 1 each.
each
During FY 15, GPIL has undertaken a write-offoff of `174 mn due to diminution in value of
investment in Genus S.A, Brazil. Also, The company completed its sale of power backup
solution business/Inverters, Solar PCU and batteries business during the same period which
resulted in a gain of `23.58 mn.
CURRENT PRODUCT PORTFOLIO

SEGMENT TYPE
Metering business Smart Meters

Prepayment meters
Single Phase meters
Three Phase meters
Meter Test Equipments
Meter reading Equipments
ECC (Engineering Construction & Contracts) Switchyard/Substations

Transmission lines
Distribution lines & HVDS
Process Industry plant Electrification
Rural Electrification
Source: Annual report
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INVESTMENT RATIONALE
SERIOUSNESS OF GOVT TOWARDS POWER SECTOR REFORMS & UDAY PROVIDES

HIGHER VISIBILITY AND SUSTAINABLE INCREASING DEMAND FOR SMART ENERGY
METERS OVER NEXT MANY YEARS
Central Governmentss agenda for Power for All: 24x7 by 2019/2020 has
undertaken following reforms in 2014&2015.
o Coal mine auctions & improving coal production in the country
o Highest increase in power generation and Transmission capacity addition
o Implementation of IPDS and DDUGJY Smart metering considered as an
o Biggest LED lighting movement in the world automated process key to AT&C
losses reduction
o Launch of UDAY
o Increasing share of renewable Energy generation from solar & wind power in the
overall power generation in the country
Accumulated Discom losses & Debt have ballooned in the last few years:-
years: Accumulated
loss ~`3.8 lakh Cr (Mar 15)-Recurring
Recurring loss of ~ `60,000 Cr/PA at National level
Discom Loss (`
(` Cr)
100000
76877 71690
80000 64060 60000
60000 51971
41558
40000
20000
0
2014-
2009-10
2010-11
2011-12
2012-13
2013-14
Source: Power Ministry
UDAY AIMS AT PERMANENT RESOLUTION OF DISCOM ISSUES
Source:- Power ministry
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MAJOR THRUST ON IMPROVING BILLING EFFICIENCY AND COLLECTION EFFICIENCY
Source: power Ministry
AT &C LOSSES ACROSS INDIA AND AT NATIONAL LEVEL

150
99
100 82 85 77 73 64 71
50 34 38 32
18 19 25
0
West South North North East East All India
Billing Efficiency(%) Collection Efficiency(%) AT&C Losses(%)
Source: Power Ministry
The weakest & loss making link in Governments ts agenda of 24x7 power for all are Discoms
with accumulated losses to the tune of `3.8 3.8 lakh Cr (as on Mar15) and running losses of
around `60,000 Cr/year of Discoms requires urgent and permanent solution road map for
bringing the financial stability of Discoms failing which the Power for ALL: 24x7 will remain
just a paper dream.
Also, with difficulty in timely collection of meter reading & higher
highe man power cost, the world
is moving towards wi-fi fi based smart meters to prepaid smart meters.
It is expected that potential saving will be around `57000 Cr if AT&C losses are down to
~15% nationally. This calls for about 2 Cr meters to be replaced on priority basis over
next 2-33 yrs. In addition, we feel that SEB will continue to replace all mechanical meters
simultaneously and all new connections will be smart meters
met
Genus power is having a market share of more than 40% in this space and their products are
approved by all the Discoms in the country.
There are 3 main manufacturers in the country having market share of more than 85%. They
are Genus power, L&T and Secure meters.
Genus power has manufacturing plant at 3 locations
4. Haridwar
5. Noida
6. Jaipur
The company has fully integrated designs and manufacturing facilities starting from moulds,
PCB to complete assembly along with testing facilities.
The total capacity of the company is around 80 Lac meters/ PA on a single shift basis. Once
all Discom sign up under UDAY, we expect substantial orders flowing in for Genus power,
which is expected from 1Q FY 17. These will be in addition to ongoing demand of regular
orders from Discoms both under Public sector and private sector.
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In order to resolve above T&D D issues on an urgent basis, Government of India (GoI) has taken
several positive initiatives through a range of schemes and programmes to improve the T&D
sector. Integrated
ted Power Development Schemes (IPDS):-
(IPDS) Launched in Nov, 2014 with a total
outlay of `326 bn,, which includes a budgetary support of `255 bn. This scheme aims of
strengthening of sub-transmission
transmission and distribution
distribut networks in the urban areas; metering of
distribution transformers/feeders/consumers
/feeders/consumers in the urban area; and IT enablement of
IPDS AND DDUJY; A MAJOR STEP BY
distribution sector and strengthening of distribution network.
THE GOVT TOWARDS IMPROVING
Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY):-launched
(DDUGJY): in Nov 2014 with a total
SEBS EFFICIENCY
outlay of `440 bn. whichh includes a budgetary support of `335 bn. This scheme aims of
separation of agriculture and non agriculture feeders; strengthening of sub-transmission
sub and
distribution networks in the rural areas; metering of distribution
transformers/feeders/consumers in the rural areas and Rural electrification.
electrification
Genus being an early mover and well placed across all verticals will be the major
beneficiary from this.
EXPORTS THOUGH AT NASCENT STAGE CURRENTLY PROVIDES

P GOODG OPPORTUNITY
IN SMART METERS
Company is currently exporting ~`10 Cr worth of meters mainly to African countries. Their
products are also approved in European countries although the exports may take few years
to start. Word-over the governments
ts are recognizing energy efficiency and moving towards
smart energy meters. Exports
xports can become reasonably good opportunity for Genus power
and the export can contribute to around 8-10% % of sales by 2018-2019.
201
In recent years, the global market of smart metering solution has also been growing
significantly. As per the management, the global market for smart meters is expected to
grow to an estimated $20 bn by 2018. The overseas market is estimated to continue
expanding as many countries have started to adapt smart grid technology and large rollouts
are now moving forward. Annual global shipment of smart meters is projected to reach at
131 mn units in 2018.
SCALING DOWN OF T&D BUSINESS WILL HELP INCREASING OPERATING MARGIN

FORWARD
The company has small EPC business in T&D segment which has been impacting overall
margins in past.. Currently, company is focusing on very selective orders with assured payment
& double digit margin from this segment.
Further, with rising product business, this segment is expected to become smaller in the overall
turnover of company leading to improvement in operating margin which we expect to be
~18% +in FY 17E onwards .
Indian
ndian T&D sector remained underinvested relative to power generation sector. The twelfth
plan and thirteen plan has set a investment target of `1.8tn and `2.0tn in power transmission
sector (Vs `1.2tn
1.2tn in Eleventh Plan) in order to keep pace with power generation capacity
addition. Hence, we believe that this increased proposed investment in power
transmission capacity provides selectively good opportunity for Genus going ahead. It is
to be noted that earlier investment in power sector (Generation:
( Transmission: Distribution)
was distributed as 2:1:1 which now has been changed to 1:2:1 amid government
gov more thrust
on transmission sector as compared to fuel based power generation.
PGCIL remains the single largest player in domestic power transmission market. Post peak in
tower ordering in FY 12 and FY 13, PGCIL order tendering slowed down in FY 14 and FY 15
owing to slow down in power sector.. Now, PGCIL tendering activity has again picked up in
1Q FY 16 onwards indicating large capex revival. Also, we believe PGCIL tendering activity
for thirteen plan (13th plan) to start soon which will give further boost to capex in the sector.
sector
Genus has been undertaking turnkey EPC work for the power utilities since last ten years. Its
EPC business focuses on identifying root causes of problems and resolves the issue from its
root. Under this domain, GPIL offers turnkey solutions of MV,
MV HV&EHV substations and
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transmission lines and executes turnkey jobs up-toup 420 KV. Apart from switchyard/sub-
stations and transmission lines up to 420 KV, GPIL also covers rural electrification, distribution
lines, HVDS and process industry plant electrification.
electrification
We believe Genus EPC business to remain stable at current level and having order book of
~`1550 mn with upcoming potential opportunity in this segment.
segment
Product mix to improve to help improve margins going forward:

Apart from electronic meters,, genus entered into widest range of trusted and innovative
metering solutions, which mainly includes Smart Energy Management Solution, communication
module & software for Advance metering solutions, Pre payment meter, Distribution
Transformer meters, Equipment
pment device controller for load management, Hand held equipment
for data downloading & processing etc. Few states (ex. Manipur) are also implementing pre
paid meters due to terrain of installation, difficulty in sending people to read meters etc.
EBITDA MARGINS TO IMPROVE
UDAY is also proposing to energy metering of compulsory feeder and Distribution AMID ENTERING INTO HIGH MARGIN
Transformers (DT) by all states. This is mainly to help track the losses at the feeder, DT levels PRODUCTS
and for taking corrective actions and undertake energy audit.
The target is to meter
er DTs across country to complete by 2017. These are large meters and it
appears that requirement across nation would be around 1.3 mn meters.
All these are high margin products business. Hence, we expect that companys operating
margin to improve from 13.4%
4% in FY 15 to 18 %+ % by FY 17E.Also, Genus power metering
products are approved by all SEBs/Discoms in the country.
SMART GAS METERS A POTENTIAL OPPORTUNITY FOR GENUS
The present government has quickly moved towards providing LPG subsidy directly to
consumers through AADHAR based registration and removed losses in the system. Going
forward, we believe that Governments s agenda is very clear to discontinue providing cooking
gas
as (LPG) through cylinders and move to Piped Natural Gas (PNG) across Tier1 and Tier III
cities over next 6-8 years. This is in lieu of LPG being expensive, hazardous and handling of
cylinders poses threat of explosion vs. PNG is safe. Sensing the opportunity,
opportun as every PNG
connection requires metering, Genus power has deployed smart gas meters & having
necessary approvals from GAIL & other agencies. This we believe will provide additional
opportunity going
oing forward likely from FY 18 onwards.
onwards
During the twelfth plan, Capital spending of `1.2
1.2 tn is projected across the natural gas value
chain. ~ `439
439 bn is projected for capacity augmentation in gas transmission pipelines. The
balance is projected for new capacity additions in LNG terminals `313 bn and the
expansion of CGD network `403 bn.
SOLAR POWER & NET METERING
Governments thrust on renewable energy to become a significant portion of power

generation recommends large investment in solar parks, Roof Top solar power generation
and wind energy farms. With approving sale of power from Roof Top solar power
generation to grid,, Net metering to compensate for power sold also requires smart meters.
Recently, power ministry has ramped up Indias solar power capacity target under the
National Solarar Mission by 5 times to 100 GW by 2022. Most of these projects are grid tied
projects. Under these projects, net-metering
metering has a very pivotal role. Some of the states in
India have already implemented net metering policy for buyback of extra electricity
generated.
enerated. It opens up vast opportunities for net-metering
net solutions in India. Hence,
undoubtedly, smart meters are the way forward for Indias power transmission and
distribution sector.
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January 4th, 2016
In order to resolve above T&D issues on an urgent basis,

basis Government of India (GoI) has taken
several positive initiatives through a range of schemes and programmes to improve the T&D
sector.
a) Integrated Power Development Schemes (IPDS):- (IPDS) Launched in Nov, 2014 with a total
outlay of `326
326 bn , which includes a budgetary support of `255 bn. This scheme aims
of strengthening of sub-transmission
transmission and distribution networks in the urban areas;
metering of distribution transformers /feeders/consumers in the urban area; and IT
enablement of distribution
tribution sector and strengthening of distribution network.
The estimated cost of the present scheme with the components of strengthening of sub- sub
transmission and distribution networks, including metering of consumers in the urban areas
is `32,612cr which includes
ncludes the requirement of budgetary support from Government of India
of `25,354crcr over the entire implementation period.
b) DeenDayal Upadhyay Gram Jyoti Yojana (DDUGJY):-Launched
(DDUGJY) in Nov 2014 with a
total outlay of `440 bn. which includes a budgetary support of `335 bn. This scheme IMPROVING DEBTOR DAYS (WC
aims of separation of agriculture and non agriculture feeders; strengthening of sub-
sub CYCLE) & POSITIVE OPERATING
transmission and distribution networks in the rural areas; metering of distribution CASH FLOWS
transformers/feeders/consumers in the rural areas and Rural Electrification.
Key positive- After sanctions of projects, contracts for execution of projects will be awarded
by states Discoms / Power Departments. The projects shall be completed within 24 months
from date of award
The scheme would help in
o Improvement in hours of power supply in rural areas
o Reduction in peak load
o Providing access to electricity to rural households
Hence, on account of above recent Schemes/Reforms announced by the power ministry, we
expect, the projects under this scheme willl be completed in a time-bound
time manner, enabling
the supplier like Genus power to get payment on time- time debtor days to get reduced .
Resultantly,, Genus power operating cash flow to become positive from FY 17E onwards.
onwards
RISKS/CONCERNS
o Any Delay in Discoms ability to reform and install meters can impact growth of genus
power.
o Delay in receiving payment from Discoms could impact operating cash flows & hence
borrowings.
o Company has given loans to the tune of `42
42 Cr to associate/promoter group companies,
which management is promising to reverse by FY 17E
OUTLOOK AND VALUATION
With UDAY in place and utmost likelihood of all SEBs/Discoms undertaking structured
reforms towards permanent solution in improving operational & financial efficiency, we
believe installation of smart meters is MUST at all levels, wherein Genus power is rightly
placed, having productss to meet every Discoms requirement and with sufficient manufacturing
capacity in place.
As per our estimate, the stock at CMP of `56 is trading at P/E (x) of 9.7 for FY 17E on an
EPS of `5.78 for FY 17E. The stock is attractively valued and we recommend investors
may BUY with long term view
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FINANCIALS
(` mn)
INCOME STATEMENT FY 14 FY 15 FY 16E FY 17E
Net Sales 7,655 9,150 9,737 11,853
Total Revenues 7,655 9,150 9,737 11,853
% increase 20% 6% 22%
67% 67% 65.0% 64.0%
Cost of material consumed 5,141 6,167 6,329 7,586
Gross profit 2,514 2,983 3,408 4,267
Gross Margin% 32.8% 32.6% 35.0% 36.0%
% increase 19% 14% 25%
Personnel Expenses 570 652 633 770
% of revenues 7% 7% 7% 7%
Administrative Expenses 963 1,103 1,022 1,304

% of revenues 13% 12% 11% 11%
Total Other Expenses 1,533 1,755 1,655 2,074
EBITDA 981 1,228 1,753 2,193

EBITDA Margin % 12.8% 13.4% 18.0% 18.5%
% increase 25% 43% 25%
Depreciation 105.7 161 161 161
Earnings / (loss) before Interest & Taxes (PBIT) 875.2 1,067 1,592 2,032
Operating Margin % 11.4% 11.7% 16.3% 17.1%
% increase 22%
Other Income 94 124 214 261
1% 1.4% 2% 2%
Net Interest expense / (Income) 356 332 320 315
Other Adjustments - 150.27

Earnings (loss) before taxes (PBT) 613 708 1,486 1,977
Operating Margin % 8.0% 7.7% 15.3%
% increase 15% 110%
Minority Interest 0.0 0.0 0.0 0.0
Provision for Income Tax 8 177 371 494
Tax rate(%) 25% 25% 25%
Net Earnings (Loss) After Provision for Losses/write offs/ Tax (PAT) 605 531 1,114 1,483
Source: Company, Way2wealth Research
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(` mn)
BALANCE SHEET FY 14 FY 15 FY 16E FY 17E
Inventories 866 1,560 1,165 1,396
Debtors 3,664 3,996 3,408 4,148
Cash and cash equivalents 525 490 2,635 3,286
Total current assets 5,055 6,045 7,207 8,830
Loans & Advances 1,880 1,914 2,045 2,489
Fixed Assets
Gross Block 1,698 1,892 1,892 1,892
Less: Depreciation 503 582 743 904
Net Block 1,195 1,310 1,149 988
Investments 697 1,222 1,222 1,222
Total LTA 1,891 2,531 2,370 2,210

Total Assets 8,826 10,490 11,622 13,529
Current Liabilities 1,227 1,803 1,848 2,215

Provisions 309 313 285 341
Unsecured Loans 189 376 376 376
Total Current liabilities 1,725 2,491 2,509 2,932
Secured Loans 2,764 3,127 3,127 3,127
Minority Interest
Equity Share Capital 257 257 257 257
Reserve & Surplus 4,081 4,616 5,730 7,213
Total Shareholder funds 4,338 4,873 5,987 7,470
Total Liabilities and Shareholder funds 8,826 10,491 11,622 13,529
(` mn)
CASH FLOW STATEMENT FY 14 FY 15 FY 16E FY 17E
Net Profit / (Loss) Before Tax 613 708 1,486 1,977
Depreciation 106 161 161 161
Other Adjustments - - 320 315
Operating Profit before Working Capital Changes 987 1,554 1,967 2,453
Working Capital Adjustments (218.7) (1,545) 26.8 425.6

Cash Generated from Operations 768 9 1994 1,905
Less Taxes paid 89 145 371 494
Net Cash Flow from Operating Activities 680 (136) 1622 2,385
Purchase/ Adj. of fixed assets (153) (198) - -

Net investment (221) (47) -
Change in loan & Advances - - (131) (444)
Interest received 63 82
Dividend - 5
Net Cash Flow from Investing Activities (311.7) (157.9) (130.9) (444.2)
proceeds from term borrowings 217.60 482.74 - -

Others 3.56 3.24
Interest paid (264.02) (249.50) (320.00) (315.23)
Dividend on Equity paid (18.93) (30.25)
Net Cash Flow from Financing Activities (61.8) 206.2 (320.0) (315.2)
plied For.
2wealth.com
10 | P a g e Way2wealth Researc
Initiating Coverage
January 4th, 2016
(` mn)
SUMMARY FINANCIALS FY 14 FY 15 FY 16E FY 17E
Total Revenues 7,655 9,150 9,737 11,853
Gross profit 2,514 2,983 3,408 4,267
EBITDA 981 1,228 1,753 2,193
PAT 605 531 1,114 1,483
Total Cash 525 490 2,635 3,286
Total Debt 2,953 3,503 3,503 3,503
VALUATION
Shares out 256.60 256.70 256.70 256.70
Price (in `) 56.0 56.0 56.0 56.0
Equity Market Cap 14,369.60 14,375.20 14,375.20 14,375.20
EV 16,796.9 17,388.2 15,243.2 14,591.7
EV/ Sales 2.2x 1.9x 1.6x 1.2x
EV/ EBITDA 17.1x 14.2x 8.7x 6.7x
EPS 2.36 2.07 4.34 5.78
P/E 23.8 27.1 12.90 9.69
RoE 13.9% 10.9% 18.6% 19.9%
RoCE 20.2% 21.9% 26.6% 27.2%
GROWTH
Total Revenues 19.5% 6.4% 21.7%
Gross profit 18.6% 14.2% 25.2%
EBITDA 25.2% 42.7% 25.1%
PAT -12.1% 109.8% 33.1%
EPS -12.2% 109.8% 33.1%
PROFITABILITY
Gross Margin 32.8% 32.6% 35.0% 36.0%
EBITDA Margin 12.8% 13.4% 18.0% 18.5%
Operating Margin 8.0% 7.7% 15.3% 16.7%
PAT 7.9% 5.8% 11.4% 12.5%
STABILITY
Debt / Equity Ratio 0.68 0.61 0.59 0.47
Interest Coverage Ratio 2.46 3.21 4.97 6.45
plied For.
2wealth.com
Initiating Coverage
January 4th, 2016
Team
Analyst Designation Sector Email Telephone

Nilesh Doshi President (Research) nilesh.doshi@tssl.in +9122-6633 8950
Mahesh Bendre AVP Capital Goods, Auto, Auto Ancillary maheshbendre@way2wealth.com +9122-6146 2937
Jaisheel Garg AVP Power, Power Equipment, Coal Mining jaisheelgarg@way2wealth.com +9122-6146 2974
Shivani V. Vishwanathan Sr. Research Analyst FMCG Consumer Durables
FMCG, shivani.mehra@tssl.in +9122-6663 8956
Nisha Harchekar Sr. Research Analyst Chemicals, Textiles nishaharchekar@way2wealth.com +9122-6146 2952
Vijay Gyanchandani Research Associate vijaygyanchandani@way2wealth.com +9122-6633 8972
Institutional Sales Designation Email Telephone

Ramanjaneyulu BV Institutional Head Sales raman@way2wealth.com +9122-6146 2913
Vinod Vijay Birla Senior Manager vinodbirla@way2wealth.com +9122-4019 2998
Bhavika Ravasia Senior Manager bhavikaravasia@way2wealth.com +9122-4019 2995
Institutional Dealing Designation Email Telephone

Ajay Prabhudesai Assistant Vice President ajay.prabhudesai@tssl.in +9122-4027 8930
Mitul Doshi Institutional Sales Trader mitul.doshi@tssl.in +9122-4027 8932
Gautam Vyas Institutional Sales Trader gautam.vyas@tssl.in +9122-4027 8934
plied For.
2wealth.com
Initiating Coverage
January 4th, 2016
Disclaimer
Analyst Certification: I, Jaisheel Garg, the research analyst and author of this report, hereby certify that the views expressed in this research report
accurately reflect our personal views about the subject securities, issuers, products, sectors or industries. It is also certified
certified that no part of the compensation of
the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in thisth research. The analyst(s), principally
responsible for the preparation of this research report, receives compensation
compensation based on overall revenues of the company (Way2Wealth Brokers Private
Limited, hereinafter referred to as Way2Wealth) and has taken reasonable care to achieve and maintain independence and objectivity object in making any
recommendations.
It is confirmed that Jaisheel Garg, the author of this report has not received any compensation from the companies mentioned in the report in the preceding 12
months. Our research professionals are paid in part based on the profitability of Way2Wealth, which which include earnings from other business. Neither
Way2Wealth nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, indirect incidental, special or
consequential including lost revenue or lost profits that may arise from or in connection with the use of the information contained in this report.
This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Way2Wealth
is not
ot soliciting any action based upon it. Nothing in this research shall be construed as a solicitation to buy or sell any security
secu or product, or to engage in or
refrain from engaging in any such transaction. The contents of this material are general and are
are neither comprehensive nor appropriate for every individual and
are solely for the informational purposes of the readers. This material does not take into account the specific objectives, financial situation or needs of an
individual/s or a Corporate/s or any entity/s.
This research has been prepared for the general use of the clients of the Way2Wealth and must not be copied, either in whole or in part, or distributed or
redistributed to any other person in any form. If you are not the intended recipient you must not use or disclose the information in this research in any way.
Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. Way2Wealth
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customers by virtue of their
heir receiving this report. The distribution of this document in other jurisdictions may be restricted by the law applicable in the relevant
jurisdictions and persons into whose possession this document comes should inform themselves about, and observe any such restrictions.
The report is based upon information obtained from sources believed to be reliable, but we do not make any representation or warranty that it is accurate,
complete or up to date and it should not be relied upon as such. Way2Wealth or any any of its affiliates or employees makes no warranties, either express or
implied of any kind regarding any matter pertaining to this report, including, but not limited to warranties of suitability, fitness for a particular purpose, accuracy,
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affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any an inadvertent error in the information
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cidental, consequential, punitive, lost profits, or lost opportunity, whether or not Way2Wealth has advised
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looking; such statements are based upon the current beliefs and
This material contains statements that are forward-looking; and expectations and are subject to significant
risks and uncertainties. Actual results may differ from those set forth in the forward-looking
forward looking statements. These uncertainties include but are not limited to: the
risk of adverse movements or volatility in the securities markets or in interest or foreign exchange rates or indices; adverse impact from an economic
slowdown; downturn in domestic or foreign securities and trading conditions or markets; increased competition; unfavorable political po and diplomatic
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elopments; change in the governmental or regulatory policies; failure of a corporate event and such others. This is not an offer
of to buy or sell or a solicitation
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reproduce any information provided
ovided by Way2Wealth in any format to anyone. Way2Wealth and its affiliates, officers, directors and employees including persons
pers
involved in the preparation or issuance of this report may from time to time have interest in securities / positions, financial
financi or otherwise in the securities related
to the information contained in this report.
To enhance transparency, Way2Wealth has incorporated a Disclosure of Interest Statement in this document. This should, however,
howeve not be treated as
endorsement of the views expressed in the report.
Disclosure of Interest Statement in Genus Power Infra Ltd. as on January 4th, 2016
Name of the Security Genus Power Infra Ltd.

Name of the analyst Jaisheel Garg
Analysts ownership of any stock related to the information contained No
Financial Interest
Analyst : No
Analysts Relative : Yes / No No
Analysts Associate/Firm : Yes/No No
Conflict of Interest No
Receipt of Compensation No
Way2Wealth ownership of any stock related to the information
NIL
contained
Broking relationship with company covered NIL
Investment Banking relationship with company covered NIL
Note: some employees & clients have transactions & holding in the said scrip
This information is subject to change without any prior notice. Way2Wealth reserves at its absolute discretion the right to make
m or refrain from making
modifications and alterations to this statement from time to time. Nevertheless, Way2Wealth is committed to providing independent and transparent
recommendations to its clients, and would be happy to provide information in response to specific client queries.
plied For.
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INITIATING COVERAGE BUY CMP:: `56/- 04TH JAN 2016

Genus Power Infrastructures Ltd.

incorrect metering etc.

Exports though at nascent stage currently provides big opportunity in smart

CURRENT PRODUCT PORTFOLIO

Metering business Smart Meters

ECC (Engineering Construction & Contracts) Switchyard/Substations

SERIOUSNESS OF GOVT TOWARDS POWER SECTOR REFORMS & UDAY PROVIDES

Source: Power Ministry

UDAY AIMS AT PERMANENT RESOLUTION OF DISCOM ISSUES

Source:- Power ministry

MAJOR THRUST ON IMPROVING BILLING EFFICIENCY AND COLLECTION EFFICIENCY

Source: power Ministry

AT &C LOSSES ACROSS INDIA AND AT NATIONAL LEVEL

Source: Power Ministry

EXPORTS THOUGH AT NASCENT STAGE CURRENTLY PROVIDES

SCALING DOWN OF T&D BUSINESS WILL HELP INCREASING OPERATING MARGIN

Product mix to improve to help improve margins going forward:

SMART GAS METERS A POTENTIAL OPPORTUNITY FOR GENUS

SOLAR POWER & NET METERING

Governments thrust on renewable energy to become a significant portion of power

In order to resolve above T&D issues on an urgent basis,

OUTLOOK AND VALUATION

Administrative Expenses 963 1,103 1,022 1,304

Total Other Expenses 1,533 1,755 1,655 2,074

EBITDA 981 1,228 1,753 2,193

Depreciation 105.7 161 161 161

Other Adjustments - 150.27

Loans & Advances 1,880 1,914 2,045 2,489

Total LTA 1,891 2,531 2,370 2,210

Current Liabilities 1,227 1,803 1,848 2,215

Total Liabilities and Shareholder funds 8,826 10,491 11,622 13,529

Working Capital Adjustments (218.7) (1,545) 26.8 425.6

Purchase/ Adj. of fixed assets (153) (198) - -

proceeds from term borrowings 217.60 482.74 - -

Analyst Designation Sector Email Telephone

Institutional Sales Designation Email Telephone

Institutional Dealing Designation Email Telephone

Name of the Security Genus Power Infra Ltd.

Analysts ownership of any stock related to the information contained No

Investment Banking relationship with company covered NIL

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