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We assume coverage on Genus Power Infrastructure (GPIL) with BUY and TP of Rs450, valuing the stock at 15x its Jun-28E EPS. Backed by a strong opening order book, GPIL sustained its healthy execution momentum during 1QFY27. Revenue grew 44.8% yoy to Rs13.6bn, while EBITDA/PAT grew 30.4%/26.7% yoy to 2.6bn/1.6bn, respectively. This was underpinned by accelerated execution of the order book and ramp up across all ongoing AMISP projects. Gross margin was impacted yoy (down by 264bps), amid supply disruptions due to the West Asia conflict, but is seeing gradual recovery sequentially (up by 103bps). EBITDA margin for the quarter came in at 19.1% (-211bps yoy), comfortably above the management guidance of 18% for FY27. The current order book of ~Rs240bn, coupled with the strong near-term tender pipeline of 80-90mn smart meters (likely to be awarded in FY27, per the management), offers strong revenue visibility. GPIL remains one of the key beneficiaries of the distribution reforms in India.

Strong revenue momentum; GM impacted by West Asia conflict, seeing recovery

Standalone revenue surged 44.8% yoy to Rs13.6bn, driven by accelerated execution of the order book, increasing roll-out intensity, and ramp-up across ongoing AMISP projects. Gross margin declined by 264bps yoy to 37%, on account of higher raw material costs amid supply disruptions arising from the West Asia geopolitical crisis. However, we see gross margin improving sequentially by 103bps, indicating gradual recovery. Employee expenses as a percentage of sales improved by 86bps yoy to 8.3%, while other expenses rose marginally by 33bps yoy to 9.6%. Consequently, EBITDA margin contracted by 211bps yoy to 19.1%, although still above management guidance of 18% for FY27. Despite the margin pressure, absolute EBITDA increased 30.4% yoy to Rs2.6bn, supported by strong topline growth. Interest cost jumped 39.2% yoy to Rs498mn, broadly in line with revenue. PAT for the quarter rose 26.7% yoy to Rs1.6bn.

Healthy order backlog, along with robust near-term tender pipeline

GPIL’s robust order book of Rs240bn provides strong revenue visibility over coming years. The management expects 80-90mn smart meters to be tendered in FY27, from states like Haryana, Punjab, Tamil Nadu, West Bengal, etc, supporting a healthy growth pipeline. In addition, rising export contribution and a meaningful scale-up in O&M revenue are expected to aid earnings growth.

View and valuation

We remain positive on GPIL, given its market leadership and strong opportunity ahead. The management gave guidance for Rs60-65bn revenue in FY27, with EBITDA margin of 18%. It also expects to turn cash-flow positive by end-FY27 and see improvement of 50- 75 days in working capital. The stock is currently trading at 11x/9x PER its FY28E/29E EPS. We assume coverage on GPIL with BUY and TP of Rs450.

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