Genus Power faces low energy demand due to COVID-19

Genus Power Infrastructures Limited, which is a leading manufacturer of smart metering solutions with an installation base of 48 million electricity meters across the world, has stated the impact of COVID-19 pandemic on its business operations.

The company’s production and supply of goods were commenced in the last week of April 2020 in a phased manner at all manufacturing locations after the government partially eased lockdown restrictions. It caused unanticipated delay and increased costs to production. The pandemic has led to disruption in its supply chain and has sharply curtailed energy demand.  The revenue and profitability of the company is likely to be adversely affected in Q1FY21.

However, its existing contracts and agreements would be executed smoothly and the company does not expect any significant impact on the business. The current order book of the company is Rs 943 crore, giving revenue visibility over the next three to four quarters.

On the macro level, collection delay and defaults are expected to be made by consumers (lower slab domestic category due to wage disruption as well as commercial and industrial defaults due to business discontinuity) which will put more pressure on financially ailing discoms. Government budgets might also get disrupted, resulting in lower subsidy and stretching working capital cycle. A fall in industrial and commercial demand will impact cross-subsidies available to other consumers. The smart meters have proved their worth during lockdown, as it has helped curtail the losses of discoms that had adopted them.

On Wednesday, the stock of Genus Power opened gap-up 4.4 per cent at Rs 19.70 on BSE. In the early morning session, it touched Rs 21.21, an upside of 12.40 per cent from its previous close of Rs 18.87.