Genus can double manufacturing of smart meters in 6 months, if required: JMD

• He also added that the company expects price realisations to remain very favourable for the next six to seven years on account of the thrust placed by the Centre on smart metering

• Installing smart meters will immensely improve the financial situation of power distribution companies, said the JMD

New Delhi: Genus Power has designed its building and manufacturing infrastructure in a way that will enable it to double its smart meter manufacturing capacity within six months, if required, Joint Managing Director (JMD) Jitendra Kumar Agarwal told investors on Saturday. He also added that the company expects price realisations to remain very favourable for the next six to seven years on account of the thrust placed by the Centre on smart metering.
 
"Considering the specialised nature of smart meter industry in India and an enormous market, we expect price realisations to remain healthy and the forthcoming period of six to seven years to remain very favourable. Also, as a strategy we have designed our building and manufacturing infrastructure in a way, which will enable us to easily double our manufacturing capacity in short period of 6 months, whenever required," said Agarwal.

FMS component of revenue will constitute 8-10% of total revenue

"As smart meters are high-end products (viz-a-viz conventional meters), the profitability is also better. And with end-clients increasingly requesting for end-to-end solutions with Facility Management Services (FMS) leads to increased incentive of recurring revenue. We expect the FMS component of our revenue to constitute about 8 to 10 percent of our total revenue, in foreseeable future," said the JMD.

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Commenting on the impact of the COVID-19 second wave on the company's business, Agarwal said, "The business momentum was severely affected in the latter half of Q4 on account of disruptions due to second wave of COVID-19 pandemic in India. With cases on decline and the state governments slowly relaxing lockdown measures, the metering business should start getting the necessary impetus going forward."

'RLRBSD scheme important harbinger for smart meter manufacturing industry'

Agarwal said that the rollout of the new scheme — Reforms-Linked, Result-Based Scheme for Distribution (RLRBSD), which is to be implemented over the next 5 years — by the government to reform the Indian power sector by creating new infrastructure is a very important harbinger for Indian smart metering industry. "… about half of the total funds of the scheme are likely to be deployed for installation of smart meters. This scheme is being seen to address the core issues of billing-collection inefficiencies and pilferage that cripple the Indian power sector. It is also vital to note that the disbursements under the scheme will be linked to the adherence to the loss reduction trajectory and there will be annual reviews to assess the DISCOMs' performance. At the same time the 'Pay-as-you-save model' devised by IntelliSmart could be the game changer for Indian smart metering business, for it will lead to easier capex funding as well as lower working capital cycle for DISCOMs," said the Genus Power JMD.

'Smart meters will alleviate financial stress in distribution sector'

The credit profiles of DISCOMs continue to remain stressed due to higher level of aggregate technical and commercial (AT&C) losses, inadequate tariffs in relation to their cost of supply, and inadequate subsidy support from the respective state governments. Total outstanding dues of the DISCOMs towards power generating firms stood at over Rs 1.35 lakh crore at the end of December 2020. Such high level of liabilities have become unsustainable for DISCOMs and adhering to the power sector reform measures being undertaken by the Central government has become a must.

"Smart meters will play an important role in solving this challenge, as installing these meters, will immensely improve the financial situation of power distribution companies. State Electricity Boards have already witnessed that the implementation of smart metering is extremely beneficial and all across the country momentum is building up in favour of smart meters. In light of the thrust being given by the Central government, the tender activity for smart metering should pick up pace in the second half of calendar year of 2021. Pre-paid smart metering also leads to immediate generation of working capital for DISCOMs which is highly advantageous, as the revenue is generated at the point of sale, which otherwise takes a couple of months," said Agarwal.

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