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We reiterate BUY on Genus Power Infra (GPIL) with a TP of Rs510 (upside 38%). The Q1FY26 performance was strong, with EBITDA and PAT coming ahead of the management guidance and our estimates by a significant margin. This was led by accelerated execution across ongoing smart metering projects and improved offtake of smart meters from various utilities. While the company did not win orders during the quarter, the management highlighted the strong tender pipeline worth Rs270-280bn to be awarded over the next six months. The management indicated revising its FY26 revenue guidance of Rs40bn post H1 results. GPIL remains one of the largest players of the smart meter installation drive under the Rs3trn revamped distribution sector scheme; this scheme aims at replacing conventional meters and structurally transforming the financial dynamics of the power sector. With only 36.8mn (including other schemes) smart meters installed as of Jul-25 end, we believe the growth opportunity is sizable, with execution being key.

Robust growth on the back of strong execution and operating leverage

Standalone revenue grew 128% YoY and was flat QoQ at Rs9.4bn on the back of robust execution. GPIL installed 1.6mn meters in Q1FY26. EBITDA margin improved by 591bps YoY to 21.2% due to operating leverage. As a % of sales, employee cost declined by 437bps YoY to 9.2% and other expenditure declined by 630bps to 9.3%. Absolute EBITDA grew a staggering 216% YoY to Rs2bn. Interest cost jumped 74% YoY to Rs358mn, broadly in line with revenue. PAT grew 203.2% YoY to Rs1.3bn. While revenue/EBITDA margin for FY26 has been maintained at Rs40bn/18%, it is likely to be revised upward given the strong Q1FY26 results, capacity ramp-up, and strong demand by utilities

Net capital improvement remains the key monitorable

Number of NWC days rose from 185 in FY24 to 227 in FY25, mainly led by an increase in the number of debtor days (due to sales increase) and decline in the number of payable days. The management guided that the NWC days count will gradually improve, achieving ‘Operation Go-Live’ across several projects. It has already achieved the ‘Go-Live’ status for several projects in Assam and Chhattisgarh. It indicated that a similar achievement in other states would lead to lower working capital in due course. Of the total AMISP contracts received, GPIL has so far installed 4.5mn smart meters, of which it has achieved ‘go live’ status for 2.1mn (ie payment has been received for these installations).

View and valuation

We maintain our revenue estimates for FY26/27 and introduce FY28 estimates with revenue growth of 15% and EBITDA margin of 20%. We remain positive on GPIL given its market leading position and strong opportunity ahead. We maintain BUY with TP at Rs510. Key risks: 1) delay in execution of orders, 2) sustained slowdown in tendering activities, 3) increasing competitive intensity, 4) significant increase in commodity prices.

Concall KTAs

• The management gave guidance for FY26 revenue of over Rs40bn with 18% EBITDA margin. However, it indicated that it may revise guidance upward after the Q2 results following better clarity.
• For meter installations, it guided to 8-9mn meter installations in FY26 and 11-12mn meters in FY27.
• The company expects to be cash flow positive by FY26.
• The company boasts of 25-30% market share which it expects to maintain going ahead.
• The company has witnessed order inflow visibility, with tendering activity having started in states like Tamil Nadu, Delhi, Pondicherry, etc. For Tamil Nadu, the company has already submitted the bids and awarding will happen within 3-4 months.
• In Q1FY26, Genus installed 1.6mn meters, and cumulative installation till the end of Q1FY26 has exceeded 4.5mn meters.
• Of the total installed meters by Genus, 2.1mn have achieved ‘go live’ status, with payment received. (The management does not classify a meter as ‘go live’ if no payment has been not received).
• The number of inventory days has improved, from 170-180 in FY25 to 160-165 in Q1FY26. Working capital intensity remains high during pre-operational phases due to upfront investments in procurement.
• The management expects continued improvement in inventory levels, with working capital requirements projected to decrease to ~40% of sales from the current high levels. The company expects further improvement in inventory management with better project organization.

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