The April-June 2008-09 results of the company are in line with the brokerage expectations on both revenue growth and profitability fronts.
The revenues grew by 20 per cent to Rs 100.2 crore against Sharekhan’s estimate of Rs 95.9 crore. The revenue growth was higher because the performance of both the businesses, meters and projects, was stable during the period.
The operating profit of the company grew by 23.9 per cent to Rs 16.4 crore, implying an operating profit margin of 16.4 per cent.
The operating profit margin improved by 52 basis points on account of a decline in the other expenses. The employee cost as a percentage of sales increased by 263 basis points to 73.3 per cent.
The other income increased by 40.9 per cent while the interest cost rose by 32.6 per cent to Rs 5.5 crore. Consequently, the net profit of the company grew by 23.4 per cent to Rs 8.5 crore vis-à-vis Sharekhan’s estimate of Rs 8 crore.
Currently, the executed order book of the company stands at Rs 645 crore.
Sharkhan has revised their earning estimates for 2008-09 and 2009-10 downwards by 5.8 per cent and 6.4 per cent to Rs 45.6 and Rs 59.8 , respectively. It has have been revised to factor in the increase in the input cost that is expected to exert pressure on the company’s operating profit margin going forward.
Genus Power Infrastructure is a leading manufacturer of electronic energy meters. In Sharekhan’s view, the company is well poised to benefit from the government's plan to spend on the country's power transmission and distribution sector.
At the current market price the stock trades at 6.2x and 4.7x its FY2009E and FY2010E earnings respectively.
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