Genus Power Infrastructures Ltd
NSE:GENUSPOWER
Genus Power Infrastructures Ltd
NSE:GENUSPOWER
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Ladies and gentlemen, good day, and welcome to Q3 FY '25 Earnings Conference Call of Genus Power Infrastructures Limited Hosted by Kaviraj Securities Private Limited.
[Operator Instructions]
Please note that this content is being recorded.
Please note, this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
I now hand the conference over to Mr. Abhijeet Mukesh Purohit from Kaviraj Securities. Thank you, and over to you, sir.
Thank you. Good evening, everyone. Kaviraj Securities Private Limited, welcomes you all for Q3 and 9 months FY '25 Earnings Conference Call of Genus Power Infrastructures Limited. Today on the call, we have with us Mr. Kailash Agarwal, Vice Chairman; and Mr. Jitendra Agarwal, Joint Managing Director.
Now without any further delay, I would like to hand over the call to Mr. Kailash Agarwal for his opening comments, post which, we will open the floor for Q&A session. Thank you, and over to you, Kailash, sir.
Good evening, everybody. As I'm traveling, so I would request to have a question and answers. We can start with the question and answer because I don't have the details of the numbers, the opening remarks with me. So sorry for that. And please, we can go for the question answers, please.
[Operator Instructions]
First question is from the line of Darshil Pandya from Finterest Capital.
Am I audible?
Yes, sir.
Congratulations on this great set of numbers, sir. Sir, my first question would be on the EBITDA margin side. Since this has been one of the best margins that we have done in the company's history. What led to this margin expansion? And what kind of margins do we expect going forward from this?
Basically, we have given a guidance of 15%, 16% EBITDA always and you have to stick on that. But there might be some differences in the margins from quarter-to-quarter, but we should not see that. It's always we have to see the average margins on a yearly basis. That is important. So we are, again, on the same guidance that we will be doing a 15%, 16% EBITDA and that is for sure.
I get it. But sir, what led to this margin expansion for this quarter? If I...
Sometimes it happens. It is the quality of meters, the number of meters or there are many things that is not properly explained. Basically, it's always important to understand the average margins.
Got it. And sir, can you please elaborate something on the strategic investment business segment? What is it...
Sorry, strategic...
Strategic investment business that we have separately shown in our P&L.
So that's already -- we are working on that and that's already filed in NCLT, that's an investment -- a different investment in non-listed companies and some group companies and all that has been going out that we already being filed with the demerger of the company, and it's been taking some time. And that is the only thing -- it's old -- very old process going on.
And lastly, sir, I'd like to have some update regarding the ED search that happened in the month of December that the company notified on the exchange. What's the update on that? Have they find any material...
We have already given an updates on that, that's the company that has been served and we informed that to the exchanges. And after that, if we haven't received anything from the department or from the court or anything. Once we will get that, we will inform for sure.
The next question is from the line of Mahesh Patil from ICICI Securities.
Sir, my question is on the other expenses which have gone up substantially this quarter. So anything in particular, any one-off due to which the expenses have gone up, other expenses I'm talking about?
Other expenses, if you will see in consolidated that has gone up because as per the accounting policy, I don't know that is because of the auditors only. When they say that MTM or mark-to-mark, it's all the notional. One thing you have to understand that it is a notional thing. Whenever there is a profit, they take it in other income and whenever there is a loss in MTM, they take it in -- sorry, other income. And when there is a loss, they take it in other expenses. So that is being taken as other expenses because of the MTM of Genus Paper, the shares hold by Genus Power because of that, that has been increased. So otherwise, there is no significant increase in the other expenses.
Okay sir. Okay. And sir, my second question is on ordering -- sorry...
Can you repeat?
On the ordering, sir? Hello?
Can you repeat? I could not take -- I could not understand your question.
Sir, my second question is on the ordering, smart meter ordering. Any further orders that have been -- I guess we haven't received anything in Q3, right? Any further orders that are in pipeline, any tenders that are there?
There are no major tenders in the pipeline. Yes, there are always a few tenders going on. But there are no major tenders in the pipeline and on the ordering side, Genus is fairly good. If you ask me personally, I would rather be more happy, that nothing much happens in the next 6 to 9 months, which is definitely not in our hands. But otherwise, yes, it is -- no major tender is happening in the next quarter at least.
Okay. Okay. And sir, another question that I had on the -- so whatever meters that we have installed that are -- we have executed the orders, there is this payment milestone, right? I think 4 or 5 months down the line or 35% of meters, something like that, post which the monthly charges for the meters start, correct?
There's no payment milestone as such. Whenever you install a meter, then you have to do the operation go live. It works in this fashion. So I don't know what milestone you are talking about, I don't see there's any payment milestone. Every tender is different, but there's no payment milestone as such.
Okay. Okay. Because from what I understood was after 4 or 5 months, there was some milestones, like 30% of meters or something like that installed. It might vary from [indiscernible] obviously, post which the -- after the testing of those meters, then the monthly service charges...
It's a different type of meter that for first 6 months, you have to install some percentage of DT meters, some percentage of feeder meters. So the question Is not very clear. So there's no asset payment milestone.
The next question is from the line of Akash Mehta from [ Canara ] HSBC Life.
So my first question is in terms of the number of meters that have been manufactured during the quarter. I mean, if you could just help out with that number first.
Number of meters manufactured.
Yes. Made during the quarter -- supplied, I mean so because our target was about 1 million, right? I mean, a month. So I mean where are we in terms of that?
So last quarter, the absolute exact number, I don't have in mind, but we have produced closer to 3 million meters.
Okay. So we are -- so it was 2 million in the previous quarter, right? I mean -- and then it has increased to 3 million, is that...
Yes, correct.
Okay. So we are on track of 1 million...
It includes all smart meters and all -- it's a complete product mix.
Okay. But if I were to make a like-to-like comparison, it's 3 million versus 2 million in the second quarter.
It was not exactly 2 million. It is not exactly 3 million but yes, quarter-to-quarter, you can compare it like that.
Understood. And second is on -- sorry, if you could -- I mean, any specific guidance in terms of fiscal '26? I mean -- and in terms of Q4 fiscal '25, our fiscal '25 revenue guidance of INR 2,500 crores, you are maintaining that?
We are 100% maintaining that.
And any guidance for '26 on revenue and margins?
'26. Kailash, sir, if you want to speak on that because generally...
Can you please come again?
He's asking for a guidance on '26.
'26 we have already given a guidance last quarter that we will be doing another 30%, 40% of -- this year, we have given a guidance of INR 2,500 crores, and there will be surely increase of 30% to 40% for next year.
And margin will be broadly similar at 15% to 16% range?
Yes, margins are already we have given the guidance..
Understood. Understood. And in terms of new tenders or new orders that -- I mean, in the previous participant also questioned, I mean, any specific reason why there has not been any pickup? I mean over the past few months?
If you will see historically also, when country moves from electromechanical to electronic meters. So there's no pattern as such, but it is becoming a pattern given historically, South a little slower in moving to electronic meters. Same thing we -- I am seeing in smart meters also that South is moving little slower. And if you ask me frankly, it is good for the industry. You can't eat everything so fast. So it is good for the industry also. Industry is getting matured, it is good for us that we are taking their time because already the order book is very, very healthy.
The next question is from the line of Chinmay Kabra from Emkay Global Financial Services.
Am I audible?
Yes, sir, you're audible now.
Congratulations for the great set of numbers. So just wanted to gain an understanding on the net working capital days, like we had previously mentioned with the execution of the AMISP order that we have taken up, net working capital base will see an incline in the initial period and going ahead, it will see a dip. So how has the net working capital days played out for us at present?
So right now, it's the initial stage where we are picking up the different projects, there are so many projects and every single project -- we are just picking up on that. So right now, there is no improvement in the working capital cycle rather it is a little more than what we expected. But coming forward or going forward, it will be surely improved once the [indiscernible] of the different projects will start getting up. So initially, for next 6 months, you will see that there is no improvement in the working capital cycle.
Any days or any range that we can give, sir, at which we are operating right now?
It's really difficult to give the range of that because as I told you, it's, again, a new business where we are putting the meters and we are getting [indiscernible] SATs to be done. And almost there are 25 projects we are working on. So some projects are far, some are slow, so it's very difficult to have the exact dates, but surely, there will be an improvement in the working capital cycle, but it will take some time.
Understood, sir. Understood. So since you have mentioned in your press release that the Assam brownfield CapEx, the capacity expansion has taken place. So I just wanted to understand how is the ramp-up in terms of execution going on over there, sir? Have you started production at that -- in the new capacity installed?
Yes, we have already started production at the new capacity.
Understood, sir. And if maybe you could get a capacity utilization level on a holistic Genus level maybe?
Yes, holistic Genus level, and we are also supplying to all the utilities in the country, but every utility is only buying smart meter. So it is overall supporting our complete business.
Understood, sir. So just had one another question. So since we did register a good 19% margin this quarter. And if I just build in an approximate 15% to 16% margins for the entire year of FY '25. So basis the balancing figure or the estimates, my margins for Q4 come to around 12% to 12.5% sir. So should we consider that going ahead or we can obviously see an escalation given our trajectory in the last 3 quarters, if you can see an improvement in that as well?
Can you come again with your question, please? Sorry.
Yes, sir. Sure. So for the entire year FY '25, you have been going ahead with the guidance of 15% to 16%, given that we have beaten this estimate in 9 months FY '25, can we see the similar pattern play out in Q4 in the sense that we could obviously come back in the 15% to 16% range registered in Q4 FY '25, sir?
So every quarter, there will be a difference. It won't be similar every quarter. It will -- there are so many things that vary from quarter to quarter. So sometimes it will be more, sometimes it will be less. But the average, you will see that will be 15%, 16%.
The next session is from the line of Darsh Solanki from Axis Securities.
Sir, most of my questions have been answered [indiscernible].
Your voice is not clear...
Your voice is not clear, Mr. Solanki.
Is it better?
Yes, it is better now.
Sir, I just wanted to ask in the last conference call, so we had been informed that 3 plants -- 3 projects in Assam and 1 in Chhattisgarh were expected to go-live in, say, a couple of months. So just wanted to check the status if those projects have been got the go-live status.
So all the 4 projects in Assam are go live. So they are all on operational go live. And in terms of Chhattisgarh, there are 2 projects running. One will -- should get go-live in next week and the other by the end of next week. So I'm expecting both Chhattisgarh projects also go live in next 7 to 10 days maximum. All the formalities and everything has been done.
Understood, sir. And sir, my next question is more on the water meter side. So did we get any orders -- export orders for the water meters this quarter?
So nothing -- currently our water meter business is, we are developing the products, a lot of certifications are happening. Certifications takes, especially for the international market, they take 12 to 18 months, in some cases, some cases 2, 2 years. So it is the process we are in the right direction. So I will -- we will start seeing some numbers from next financial year onwards. But yes, it will take 2 to 3 years for this business to become significant. But we are in the right direction, and we are absolutely moving forward with this.
Understood. Understood. And just last thing, just more of a clarification issue. So what I understood from the previous questions is that we don't expect much of a tendering inflow for the at least next couple quarters. So is that understanding correct?
Yes, that understanding is correct. There's no major tenders happening in next quarter at least.
The next question is from the line of Devanand Mohan from Avendus Spark.
Am I audible?
Yes, please.
My great set of numbers. My first question, I just wanted to ask how will you be getting payments from the DISCOMs through the JV? Will there be any delays with the monthly payments that the JV is supposed to get? Or is it like fixed? Will it come every single month without fail?
So there are so many technical processes, which you have to complete, like site acceptance test, operational go-live. And then only it becomes -- it comes on the OpEx side. Once the project becomes OpEx, then it happens every month automatically. So that has been the DDF signed with all the utilities. So they are -- all the projects are currently in the initial stages. Yes, the initial stages has taken some more time than what everybody was expecting. But that is everywhere across the country and for all the AMISP. This is not something unique for Genus. So once it is operational go-live, then DDF will come into function. And once DDF is in the function, everything will happen automatically.
Okay. Just on average, what kind of tariffs are you looking at from the DISCOMs? Like what kind of collections per month per smart meter would you say you're getting?
Collections. It's a fixed price, what we have to charge there. I could not understand what their collection, we are not tracking that. But what we have to take from them is a fixed charge.
So how much would the smart meter go for then? The price of the smart meter...
It is different to project to project. It's very difficult to say.
Every project has a different price, every product has a different price. So there's a huge variation.
No, on average?
On average? Consumer meters for a DT meter is different for different state electricity boards.
Okay. Okay. Fine. Just one more question. There are about 12 crore smart meters that are yet to be awarded, right, for the RDSS? What kind of market share are you looking to achieve for the next wave of orders that are coming? Like are you still looking to hover around the 20% or do you think there's any chance to go up or something like that?
So currently, our order book is very, very healthy. And according to the tenders coming, we will be making our strategy. But yes, Genus will always be a very significant player in the market that I can assure everyone.
So market share will broadly stay stable?
As I said, Genus will be a significant player in the market.
[Operator Instructions]
The next question is from the line of Chandresh Malpani from Niveshaay Investment Advisors.
So my question is on the working capital and overall capital requirement for the business. So when we are saying that we'll be executing about INR 3,500-odd crores of revenue. So what are we anticipating on the working capital front? And also, I would like to know the fund infusion that Genus entity would be required to do in the platform this year and going forward. So how are you managing that?
So basically, as I told that working capital will shortly be improving and I -- we don't see any more debt increase to the company. And regarding the investments in the JV, basically, the total investment that Genus has to do is almost $200 million, and that will be in 3 to 4 years. So next year, whatever there will be internal accruals that will be sufficient for the investment in the JV. We don't need any debt or anything to invest for the JV.
Okay. And sir, what would be our gross debt and net debt as at December?
So gross debt is right now is around INR 1,200 crores and net debt will be INR 300 crores, INR 400 crores.
And sir, secondly, on the imports side, like what we understand is majority of our electronic components are imported. So any challenges Genus as an entity or the industry is seeing in terms of the execution that is lined up? Or -- and secondly, on the same line, since this -- any impact on the ForEx side because -- and how are we hedged on this side?
So in terms of component availability, we don't see any major challenge. So this execution is going very smooth. And in terms of ForEx, we have a hedging policy, and we follow that.
Okay. So no major impact we are seeing, right?
Yes.
The next question is from the line of Milind Karmarkar from Dalal & Broacha.
Congratulations on a good set of numbers. Just wanted to understand that now that we can see traction coming into sales. I hope that this continues -- the growth continues for some time. But I had one question on the opportunity because what has happened is that if I look at the data, take for example, Maharashtra, the number of meters, which have been approved and number of meters, which have been installed, there is a huge difference and then they have not even installed 10% of the meters. And there are many other states where a similar thing we can see. So what is the reason for that I wanted to know?
And as you rightly said that currently, the capacity is not very large, so it's better that it happens over a period. But my question is more on -- since your business is B2G, that is your main customer is government, do you see any difficulties or any type of hindrances in the final completion of orders you have got, but execution of orders or the final go ahead by the government?
If you will see almost every state is picking up now, this is a big consumer subject, that we have to install meters to each and every consumer. So it is not that simple and it is a change of mindset from utility to the consumer for everyone. And you will see the numbers those going up for -- not only for Genus but every AMISP. So quarter-on-quarter, you will see that improvement across the country. Being a new concept, it takes some time for the utilities to seep in, for the local administration to seep in, for the local consumers to seep in that from tomorrow onwards, suddenly from postpaid, my meter will become prepaid.
And there's a very good program being run by all the AMISPs under the guidance of Government of India, under the guidance of local utilities, where the consumers are also welcoming it. So you will see these numbers going up every quarter, every month, there is a improvement. And yes, this is a mere change. So such kind of change will take some time, but yes, it is picking up. You will see your own state, Maharashtra, next quarter -- you'll be surprised what will happen in Maharashtra from Feb, March, April onwards.
Okay. Interesting. Okay. One more thing, which I wanted to know, like you just now said that you're moving from postpaid to prepaid. But is it so that all the meter, which were -- all the meters which will be installed will be prepaid or it's at the option of the utility?
No. No. It will be prepaid. Over the period of time, it will become prepaid for everyone as per guidelines currently. These meters are smart enough to be used as prepaid and posted both. At the end of the day, it is the choice of the utility. But as per the current norms, every meter has to become prepaid.
And as far as the growth is concerned, we have already seen a good growth in this quarter. So traction seems to be taking. But if I look at the order book which you have, even this growth seems to be small. So do you think that the growth can accelerate going forward? Or you think that, say, 25%, 30% growth, what -- because it looks like that what the government wanted to finish in probably 3 years is likely to take 6, 7 years. So your growth may be at, say, 30% year-on-year can continue for a long period of time. Am I right in that? Or you'll see a significant growth?
You are right in that. This is what we have been maintaining because it was a very ambitious project to be completed in 3 years. Practically, it will take its own time, which is good for the industry.
[Operator Instructions]
The next question is from the line of Aditya Welekar from Axis Cap Securities.
Congrats for the great set of numbers. So for Q4 -- Q3 we have delivered great numbers, but if we look for the overall '24 numbers, so Q4 will require a steep growth in the top line. So will it be possible to achieve that? Or some of it will spill to next calendar year?
So we are maintaining the same guidance what we gave earlier, and we are confident of achieving the numbers what we have already given in the guidance.
And the next question, is this order book means you said that a couple of quarters, we may not see much of a tendering activity. But post that...
Your voice is not very clear, sir.
Yes. What I was asking is, see a couple -- in the next couple of quarters, we may not see much of a tendering activity, as you said. So post that, do we see the order book to pick up or this is a peak for us now?
So, as I said, I don't see any major tenders have been in next quarter and thereafter, there are many states who have still not gone for smart meters. Eventually, everybody will have to go for smart meters. So you will see tenders coming. So next financial year, I see states from down south also becoming active in the smart metering. So I don't see major tenders happening for next quarter at least.
Okay. And this RDSS scheme, this will continue right, means whatever the government support is there through the scheme, this will be continuing for to involve all these steps and the focus of the government. Any macro color you can give?
So macro Government of India is very clear, and it is a necessity for the country to go for smart meters because the way the energy transition is happening across the globe not only in India across the globe smart grids is a must. And for smart grids, smart meters is a must. So I don't see any chance of going back from smart meters to your conventional electronic meters. So it has to happen. It's just a matter of time.
The next question is from the line of Rohan Vora from Envision Capital.
Congratulations on the numbers. Sir, my question was on in-sourcing...
Sir, there is a background noise on your side.
Is it clear now?
There's some phone is ringing on the background. I don't know why people are not -- they're doing multiple things at a time.
Sir, there is a problem with the line, I think. I'll get back in the queue.
The next question is from the line of Pranjal Mukherjee from Growthsphere Ventures. Please go ahead.
Am I audible?
Yes, please.
Congratulations on a good set of numbers, sir. So I have a couple of questions on the policy part of smart metering. So just like building up on 1 of the previous participants' question on prepaid versus postpaid. So recently, there was an article in the news saying how MSEDCL is sort of planning to scrap the prepaid billing for consumers and propose time of the day billing. And like how this would sort of benefit the consumer in terms of their consumption and basically, they'll be able to save some INR 0.80 per unit. And this policy is like I mean, they're planning to sort of start it from April 1.
So I just wanted to understand, sir, like what do you think of this policy? Like what kind of material impact can it have on us? And generally like, how would -- like a consumer react to it?
Can you repeat what you're saying is MSEDCL is planning to come with a policy where they will give discount on the prepaid?
Yes, sir?
What you're saying is MSEDCL is turning to give discount on tariffs for the prepaid consumers. This is what you are saying?
No. No, sir. Basically, they were saying, the article that I was reading, and it was basically mentioning that they are planning to scrap the prepaid billing and [indiscernible] time of the day billing, through which like consumers would -- the tariffs would be based on consumption in different time slots throughout the day.
So these are 2 separate things. Prepaid, whether MSEDCL wants to continue to scrap it, it is definitely the choice of the MSEDCL, but to the best of my understanding, currently, all the smart meter tenders are on the prepaid mode. So if they -- and meters are smart enough to be prepaid or postpaid, I don't know what that article says, I've not read back. So MSEDCL can easily shuffle between the 2. Time of the use is one of the biggest features of smart meters, not only MSEDCL, almost every state electricity board in the country.
And if you will go, if you will read the article almost 18 months back, central government has also given the guidance that how time of day use has to be implemented in the country over the period of time. So you'll see once the smart meters usage will happen rampantly across the country. Time of the use has to come, which is a very important feature of smart meters for the consumer. Assam government has already declared that we will go for time of day use. MSEDCL is already talking about it because tariff change and tariff structure is a very state subject, central subject and regulatory commissions also get involved. So it takes its own time. But eventually, it has to happen.
Okay. And sir, so given in the last couple of months, we've also seen like the meters installation, like the pace of it has increased. So like a couple of months back, we were at 1.3 crores. Now we crossed 2 crores meter installed. So I just wanted to understand it, again, like from a policy point of view, I read that there's a new policy called the direct debit facility, through which like -- basically ensures like 5x for the monthly estimated AMISP service charge and like how this will sort of boost like faster rollout of smart meters in FY '26. So just trying to understand this policy from you a little bit better and [indiscernible] implications of it.
So I don't know which article you are talking about and what does this 5x means. For AMISP, it's a fixed charge for 10 years. This is what we are going to charge the utility per meter per month. And direct debit facility has always been a part of the tender. So this whole RDSS program is based on the direct debt facility. So there's no change in the policy. There's nothing which is new.
All right. And one final question, a little bit on the competitive scenario, sir, like any comments on that?
Any business which will go up, will always have a competition. But at the same time, if you do your work correctly, you will be always ahead of the competition. So this is what we are trying to do and this is what we have been doing. So competition is -- will get more and more fierce. Genus is well placed to take care of everything.
Sir, the point of asking this question was I just wanted to understand, like, are we still in that nascent stage of competition where new people -- new players are entering or maybe a year or 2 years down the line, you might see some consolidation also happening in the industry?
Currently, I'm not seeing a lot of new AMISPs already -- there's a very large number of AMISPs already in the market. So as such, I'm not seeing any significant new players coming in the market now.
[Operator Instructions]
The next question is from the line of Sohan Joshi from ASC Consultants.
Am I audible?
Yes, sir.
Congratulations of all this great set of numbers. Sir, my first question is since you said that you will be able to achieve this year's guidance of INR 2,500 crores, which requires [indiscernible] quarter-on-quarter top line growth. So I want to understand, will the entire growth will come from the new Assam facility only? 50% incremental revenue to achieve the guidance of INR 2,500 crores?
New Assam facility is not giving major -- so it is not from new Assam facility. It is on the overall growth of the business.
Got it. But then -- so have we added additional capacities to the existing facilities as well to achieve this guidance of INR 2,500 crores and thereafter for the next year, 20% additional top line growth?
So we are continuously adding in the past also, we have maintained that adding capacity for Genus is not very difficult because we do complete backward and forward integration and the manufacturing of meters is such that you can ramp up your capability and capacity in 3 to 6 months. So a lot of past -- the long-term time taking things have been taken care in the past. So Genus has the capability to ramp up its production with the addition of new facility in Guwahati, it has further added to our strength.
So capacity will not be a problem. It was never a problem in the past, and it won't be a problem in the future. It is more execution. And generally, the last quarter of the year is the best time of the sale. So we are maintaining our guidance that we are confident that we will achieve what we have committed.
So there won't be any constraint with regard to the tightening working capital condition as well, right? I mean there won't be a constraint for achieving a top line growth, right, even for this quarter or for the coming quarter?
That won't be a constraint. We are confident about that.
Okay. My next question is in regard to the raw material costs, since most of our contracts are fixed price contracts, how are we seeing the raw -- I mean, we won't be able to pass the raw material cost escalation. So how are we seeing the raw material cost in the upcoming quarters and upcoming years? Is it rising? Or is it stable?
If you'll see the past history of Genus, the maximum raw material increase was during the COVID period. Still, we were not impacted very badly. Though it makes a difference, but not very badly because we are a high technology product. We're not a very high BUM product. So when you have a very high technology product and not a very high BUM, there is a difference that comes due to raw material but not major. So if you see the history of Genus, we will understand it better.
Okay. One last question. This is regard to this M2M loss, which we have hit -- which has hit the P&L this quarter. Do you expect that to be hit even in the upcoming quarter? Because that ultimately has an impact on the EPS growth. So do you expect that to be hit even in next quarter as well, in the coming Q4 quarter?
Sir, line got dropped. Disconnecting.
Okay. So we'll just wait for the [indiscernible] to respond.
Sorry. Can you -- I just got disconnected. Can I get...
Yes, the MDM loss, which has hit our P&L this quarter, do you expect the loss to be further widened in the next quarter because ultimately it drags our EPS.
Basically, it's absolutely a notional loss only, notional profit or notional [indiscernible]. We have to understand that it is dependent all on the market, whether it is going up, it is going down, share prices going up, share prices going down. So nothing to do with the actual profit or loss. So this is MTM absolutely, it may go further more losses, it may go to the profits and all, but that is not affecting in any way to the company because it's absolutely a not to lose only.
The next question is from the line of Smita Mohta from Kredent InfoEdge. Please go ahead.
So I had 2 questions basically. One is because of the Trump tariffs since most of our products are imported, so will that impact our bottom line or top line in the coming time?
And second of all, we have seen that the government orders have slowed down in many segments, in many industries. Since majority of our income comes from the smart meters itself, which is dependent on government, so is this ordering delay from the government going to impact us in coming year or in the next 6 to 9 months?
So this tariff has no major concern to the company. I've spoken earlier also, though we import electronic components, but it is not only from -- it is not from US, it is from different parts of the world, and that is not a very major impact on the raw material cost, first thing. Second thing, what is the second question, can you repeat?
Yes, the second question was regarding that we have major orders from the government for smart meters.
Yes, yes, I got your point. Yes. So as I said earlier also ordering of government has slowed down. It has nothing to do with the RDSS segment. It is primarily some of the utilities have taken more time in getting on to RDSS by then and they start ordering smart meters. And if you ask me frankly, it is good for the industry..
[Operator Instructions]
The next question is from the line of Rajesh Vora from Jainmay Ventures.
Congrats on good set of numbers. For the guidance of INR 2,500 crores for this financial year, what is the number of meters we are receiving that we would sell?
So number of meters always -- these numbers have a lot of dependence on the variety of meters. So numbers will be around 3 million, 3.5 million. I don't want to specify on the numbers because then it becomes very confusing. So that is why I want to specify on the overall guidance. So it is not only dependent on the number of meters as there's a mix of meters that makes a big difference.
Sure, sure. So you are seeing 3 million to 3.5 million meters in that range?
Yes.
Okay. And could you give that idea? Are you giving any guidance for next financial year?
So we spoke during the conference only that what we have told earlier we will maintain the same that we are maintaining the same 30% to 35% growth in the next financial year.
35% revenue growth?
Yes.
And what is the biggest challenge since most participants are trying to understand you have a massive order book. And there are reasons for slow -- anything new and which always takes longer time, I understand. So in your opinion, what are the biggest hurdles to improve the installation rate. Is it from the company side, what are the issues? And what is the customer side, DISCOM side, government issues, if you can give some idea from the [indiscernible] viewpoint?
I would say it's an overall ecosystem, it is picking up. These are very consumer-centric infrastructure projects. These are not greenfield infrastructure projects where you just go on the ground and start implementing the things. So it's a complete change of ecosystem, complete change of mindset from -- for everybody in the country. So this is one project which will touch each and every human of this country. So that is why it is an ecosystem which is getting built. But things are absolutely in the right direction. You will only see numbers growing significantly quarter-on-quarter for the whole country.
Okay. So would you say that most of the big...
Mr. Rajesh, I just request you to rejoin the queue for the follow-up question, please.
The next question is from the line of Reet Ranawat from Aventus Capital. Please go ahead.
Am I audible?
Yes, sir. You are audible.
So I had 2 questions for you. So is Genus shifting into a software-driven model. So what share of revenue can you expect from -- in the coming years from the software solution?
Reet, software-driven model means what can we explain?
As you mentioned in the annual report of Genus in 2024, so you are focusing more on software solutions now. So could you expect higher revenue from that and less from the manufacturing model?
So currently, it is a backward integration process. All the software services, which we are buying from outside like head-end system, meter data management, MDMS software, that is -- so it will not -- it is not going to impact our topline. Your topline is going to be same. So it is like -- it is more of a backward integration currently. But moving forward, we will make software as a major business for us. This is what we plan to do. But currently, it is not visible on the deadline.
Okay. And another question I had that could you shed some more details on the contract payment terms like how does the payment is received by Genus so like in a contract?
What is the payment received by Genus? Once you -- look -- it's at tender, so process is clearly written down and once we install the meters, we have to do the site acceptance, then the operation go-live happens and then initial funds come from the utilities and DDF comes into place. So what exactly you want to understand in this, I could not understand.
So the time frame of every contract is like 8 to 10 years only?
Yes. Timeframe of every contract is 8 to 10 years.
Mr. Reet, I request you to rejoin the queue for the follow-up questions.
The next question is from the line of Mahesh Patil from ICICI Securities.
Sorry, my question has been answered. It was regarding the Assam facility.
The next question is from the line of Darshil Pandya from Finterest Capital.
Sir, I just wanted to confirm, as far as I remember the last call we did, we guided for a 50% top line in FY '26. And right now, we are saying about 30%, 35%. So are we reducing the guidance? Or I just wanted to understand from your side.
We are not reducing the guidance as such. We just -- I would say can I ask Kailash to answer this.
No, no, it's nothing like that, that we are reducing the guidelines. When we say 40%, it's almost -- we are on the track so nothing on that. We are absolutely on the track. Guidance for this year is also the same and for the next year is also the same.
The next question is from the line of [ Paras ] from [ Avino ] Capital. Please go ahead.
Am I audible?
Yes, sir.
Congratulations for such a good set of numbers. I have just 2 questions. Sir, if you could please provide the breakup of the order book as in meter installation and O&M part? And also the second question is if you could just give us an update on the gas meter. Has company won any contract on the gas meter and what is the company's strategy around it?
So on the breakup of order book, I don't have it upfront with me, and I don't want to give any approximate numbers. So you can reach out to SGF, we'll provide you that -- on the gas meter side. Hello?
Yes. Sir, in terms of percentage also it's fine. We don't want an exact number.
I don't want to comment anything vague, very frankly. So we'd not like to speak over it. And on the gas meter side, it is like a conventional electronic meter business, which still be -- which will have a decent growth. It won't be very large numbers. It won't be very small numbers. It will have a decent growth, it will be like a conventional electronic meter business...
The next question is from the line of Sohan Joshi from ASC Consultants.
Am I audible?
Yes, sir.
One just last question. Even in the worst case scenario of the response on ED search, it won't, in any way hamper our manufacturing and maybe a constraint to achieve a target revenue of INR 2,500 crores, right? It won't be any constraint even if the worst case response comes from the ED, right? Hello?
Kailash, sir, you want to respond on that?
Yes, yes. Can you come again with the question? Yes, please.
Even in the worst case, response from the ED with respect to the search, which has taken place, it won't hamper our manufacturing, and it won't be a constraint to achieve our target of INR 2,500 crores, right?
If you see that the search happened on 3rd of December, it's almost 2.5 months. So nothing to do with the manufacturing, nothing to do with our business it's a normal course. There is some inquiry and it happens. So there will be no effect on the business of the company.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Kailash Agarwal for closing comments. Over to you, sir.
Thank you very much dear friends, for your confidence in the company. And we assure you that there is absolutely company is doing great, and it will be going upwards. And don't worry about the ED, anything that has happened 2.5 months back and nothing going on and absolutely fine with the company. Thank you very much.
Thank you, everybody.
Thank you. On behalf of Kaviraj Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.