Buy Genus Power Infrastructures, target price Rs 117: ICICI Securities

ICICI Securities has buy call on Genus Power Infrastructures with a target price of Rs 117. The current market price of Genus Power Infrastructures is Rs 81.3.

Time period given by analyst is one year when Genus Power Infrastructures Ltd. price can reach defined target.

Genus Power Infrastructures Ltd., incorporated in the year 1992, is a Small Cap company (having a market cap of Rs 2060.10 Crore) operating in Electric/Electronics sector.

Genus Power Infrastructures Ltd. key Products/Revenue Segments include Electronic Energy Meters, Other Services, Export Incentives, Income From Contracts and Scrap for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 200.49 Crore, down -3.11 % from last quarter Total Income of Rs 206.92 Crore and up 3.93 % from last year same quarter Total Income of Rs 192.91 Crore. Company reported net profit after tax of Rs 21.44 Crore in latest quarter.

Investment Rationale
Genus Power Infrastructures (GPIL) continued to operate at low capacity utilisation on semiconductor and other electronic component shortages during Q4FY22, which resulted in lower revenues and margins due to lack of operating leverage. For Q4FY22, revenue at Rs1.8bn was down 7.6% QoQ and 5% YoY, while EBITDA margin was flat QoQ at 10.6%. PAT at Rs110mn was up 34% QoQ, but down 63% YoY. However, the brokerage believes, the tide will turn over the next few months and FY23E, both in terms of order execution and margins, will be much brighter, mainly due to 1) improvement in semiconductor availability (GPIL has tied up for its FY23 requirement) which will help improve capacity utilisation substantially Jul’22 onwards, 2) large recent order wins, including Rs3.3bn in Dec’21 and Rs8.3bn in Apr’22, taking the total orderbook to Rs19.1bn, 3) decline in prices of key raw materials, and 4) exponential increase in tendering pipeline (Rs46.5bn already quoted and Rs260bn expected to be quoted in the next 3-4 months).

Promoter/FII Holdings
Promoters held 50.45 per cent stake in the company as of 31-Mar-2022, while FIIs owned 0.96 per cent, DIIs 5.38 per cent.