Gensol Engineer.Q4 FY25Electrical Equipment

Gensol Engineer.

Q4 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 1

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

4 of 5 growth signals are positive — a strong management growth story.

Full analysis

Revenue guidance

Category 1

→Gensol aims to grow its revenue fivefold from FY24 to FY27, targeting approximately INR5,000 crores by FY27.
→For FY25, the combined revenues of all three subsidiaries (solar EPC, EV leasing, and EV manufacturing) are expected to cross INR2,000 crores.
→EV manufacturing revenue is projected at INR300 crores in FY25, doubling to INR600 crores in FY26.
→EV leasing business assets under management (AUM) expected to double in FY25, with current credit lines of INR800 crores expected to be fully utilized.
→Solar EPC business revenue expected to scale up to INR1,300 crores in FY25.
→Installed solar capacity target for FY25 around 600 megawatts, up from 190 megawatts in FY24.
→Market share to potentially grow from under 2% currently to 6-7% by FY30 in the solar EPC segment.
→The company plans prudent growth, aiming for steady 100%-200% YoY growth in chosen market segments.

Margin guidance

Category 3

→Gensol aims to be five times its FY24 size in revenue within three years, targeting around INR5,000 crores by FY27.
→For FY25, combined revenues from EPC, EV leasing, and EV manufacturing are projected to cross INR2,000 crores.
→EPC segment expected revenue around INR1,300 crores; EV leasing close to INR400 crores; EV manufacturing about INR300 crores in FY25.
→EBITDA margins are expected to sustain or slightly improve, driven by a higher proportion of leasing business with strong margins (~30%+).
→EPC business is scaling rapidly, with FY25 execution volume projected at about 600 MW, up from 190 MW in FY24 so far.
→EV manufacturing production planned at ~5,000 vehicles in FY25, doubling to ~10,000 vehicles by FY26, contributing to revenue growth.
→Debt-to-equity management and working capital efficiency will support sustainable growth and margin expansion.

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Fundraise plans

Yes

→Gensol Engineering plans to raise between INR 200 crores and INR 300 crores of new equity, subject to approval at the EGM scheduled for January 25, 2024.
→Post equity raise and expected profits, the company anticipates a net worth of over INR 600 crores by FY25 start.
→The company expects to borrow up to INR 1,800 crores debt at a comfortable debt-to-equity ratio of around 3:1 by FY25.
→Leasing business currently has undrawn credit lines of about INR 800 crores, which they plan to fully utilize in FY25 to double the asset base.
→Cost of debt is currently sub-10%, with the possibility to improve if interest rates decline.
→The firm will be conservative in leveraging, especially in the EV leasing business, with plans to possibly increase leverage as the business matures.

Order book

Yes

- Current EPC order book specifics are not explicitly detailed in the transcript. - On January 23, 2024, Gensol Engineering indicated strong traction in orders, including a INR180 crore order book from UAE clients such as Dubai Municipal Corporation and Dubai Government. - Sweet spot for orders is between INR 50 crores (minimum) and INR 400 crores (maximum). - The company plans to avoid orders above INR 400 crores for FY'25, with potential to take on larger orders from FY'26. - Projected revenue for FY'25 is around INR 2,000 crores across EPC, EV manufacturing (INR 300 crores), and EV leasing (INR 400 crores). - EPC revenue expected to be about INR 1,300 crores. - The EPC business aims to scale to ~600 MW solar capacity in FY'25 from 190 MW completed in FY'24 to date. - The company emphasizes sustainable growth in its orderbook without pursuing extremely large solar parks (e.g., 500-1000 MW). This summarizes Gensol's current order positioning and near-term expectations.

Capex plans

Yes

→**EPC Business:** Minimal capex planned, around INR 5-15 crores for plant and machinery.
→**EV Manufacturing:** Approximately INR 125-130 crores planned to expand the Chakan plant for cargo and personal mobility vehicles.
→**EV Leasing:** Significant asset purchase planned, with an intention to buy INR 800-1000 crores worth of vehicles in FY25 (considered as capex since vehicles are on the company's balance sheet).
→No new geographic expansion beyond the UAE for existing international operations; focus remains on the UAE market.
→No immediate strategic investments like demergers planned in the short or medium term, but possible in the long term depending on market conditions.
→Hydrogen and battery energy storage systems (BESS) segments are being actively pursued with ongoing and upcoming projects but specific capex details not provided.

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