Target: ₹500
CMP: ₹399.75
We initiate coverage on Genus Power Infrastructures (GPIL) with Buy and SOTP-based TP of ₹500/share.
With over 25 per cent market share in meters pan-India, GPIL is set to become one of the largest beneficiaries of the upcoming smart meter installation drive under the ₹3 lakh crore revamped distribution sector scheme, replacing conventional meters and structurally transforming financial dynamics of the power sector.
With only 13.7 million smart meters installed till Sep-24, we believe the upcoming scope is huge and GPIL is likely to be among the frontrunners participating in tenders.
GPIL is the largest listed smart electricity meter company in India, and provides end-to-end services, including setting-up of Advanced Metering Infrastructure (AMI) and Facility Management Systems (FMS), after implementation. The recent deal with GIC (Singapore) is transformative for GPIL (26 per cent ), granting a steady-supply business and major reduction in working capital. With only 13.7mn smart meters installed as of Sep-24, we believe the opportunity is sizable, though pace of execution is key.
Key risks: delay in execution of orders, slowdown in tendering activities, increasing competitive intensity and significant increase in commodity prices