Genus Power Infrastructures Limited (GENUSPOWER) Q3 FY23 Earnings Concall Transcript

Genus Power Infrastructures Limited (NSE:GENUSPOWER) Q3 FY23 Earnings Concall dated Feb. 06, 2023.

Corporate Participants:

Kailash Agarwal — Vice Chairman

Jitendra Agarwal — Joint Managing Director

Analysts:

Mohit Kumar — DAM Capital — Analyst

Devendra Pandey — DP Financial Advisory Services — Analyst

Isha Savla — IR Securities — Analyst

Anshuman Ashit — ICICI Securities — Analyst

Subrata Sarkar — Mount Intra Finance — Analyst

Akshay Kothari — Envision Capital — Analyst

Suraj Nawandhar — Sampada Investments — Analyst

CA Garvit Goyal — Investor Search — Analyst

Nikhil Jain — Galaxy International — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Genus Power Infrastructures Limited Q3 FY ’23 Earnings Conference Call. This conference call may contain certain forward-looking statements about any, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in a listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Kailash Agarwal, Vice Chairman of Genus Power Infrastructures Limited. Thank you, and over to you, sir.

Kailash Agarwal — Vice Chairman

Thank you. Good evening, ladies and gentlemen. A very warm welcome to Q3 FY ’23 earning call of Genus Power Infrastructures Limited. Along with me, I have Mr. Jitendra Agarwal, Joint Managing Director of the company and our Investor Relation advisors, SGA. We have already put results on investor presentation and stock exchanges and company website. And I think all of you must have got a chance to look at it.

I’m glad to inform you that we have received a huge order inflow for installation of almost 30 lakh smart meters –prepaid meters, to be precise, 29.49 lakh lakh smart prepaid meters with a total — now the total order book of the company stands at INR4,099 crores, net of taxes. This shows that there is a great visibility to the company for the growth of financial year ’24 and — to get the good numbers in operations. And we expect this healthy order inflow to continue in upcoming quarters also. We also anticipate resolution of normalcy in the supply chain by beginning of ’24 as we have our earlier said in our past con-calls also that the things are improving and we will be in the normalcy from beginning of financial year ’24. The quarterly results — the sales of Q3 FY ’23 relying modest at INR200 crores, up 2% as compared to a INR196 crores in Q3 FY ’22. Revenue growth for Q3 FY ’23 was subdued as supply chain issues for some semiconductors which is coming to the normalcy, which is coming — which has already started coming to the normalcy, but everything takes some time to come to the normal status.

Operating margins continue to remain under pressure on account of higher raw material costs and lower capacity utilization, but you will see that raw material prices are also reducing. From every quarter, you will see that there is — in terms of percentage, it is getting down. So, that shows that they are coming to a normal level. They are coming to a normalcy. For Q3 FY ’23, EBITDA stood at INR20.5 crores as compared to INR20.9 crores in Q3 FY ’22. Operating margins have remained subdued on account of higher raw material costs and lower capacity utilization. Profit after tax stood at INR12 crores Q3 FY ’23 as compared to INR8 crores from Q3 FY ’22, a growth of almost 42% on year-on-year basis.

Coming to the order inflow in January 2023, we have received letter of award of INR2,420.31 crores net of taxes for appointment of Advanced Metering Infrastructure Service Provider, including design of AMI system with supply, installation, and commissioning of 29.49 lakh smart prepaid meters DT metering, HT and feeder metering level energy accounting and our FMS has reached 29.49 lakh meters from State of Assam As I earlier also told that the total order book after this order stands at INR4,099 crores net of taxes.

In the current budget also there is allocation of — which was doubled almost to INR12,000 crores for the — to improve the health of states of distribution utilities, also by tying 0.5% of their deficit to power sector reforms, and as an extension from last year. Continued physical support is an added incentive for the states to undertake power distribution reforms. These reforms will in the upgradation of the DISCOM network and metering, thereby curbing AT&C losses. The scheme aims to reduce technical and commercial losses to pan-India levels of 12% to 15% by ’24, ’25, and eliminate cost of our new grabs by ’24, ’25. REC and PFC have been nominated as model agencies for [Indecipherable] Smart meters enable consumers to learn about their consumption patterns while also existing utilities with system monitoring and customer billing without the need for manual intervention. This can significantly reduce inefficiencies in DISCOMs billing and collection and lead to significant operational improvements.

As this scheme is going on, a lot of tenders are coming, there are a lot of state electricity boards are coming with lot of tenders and all. We anticipate the robust order inflows to continue in FY ’24.

I now welcome for the questions and answers. We can open that.

Questions and Answers:

Operator

Thank you very much, sir. [Operator Instructions] Our first question is from the line of Mohit Kumar from DAM Capital. Please, go ahead.

Mohit Kumar — DAM Capital — Analyst

Good afternoon, sir, and congratulations on the huge order book. Sir, first question is, in general, there has been a lot of tenders in the market, and we have seen some of the tenders IntelliSmart and Apraava Energy have won the contracts who do not have manufacturing capacity. Do you have some exclusive tie-up with all these — the large players?

Jitendra Agarwal — Joint Managing Director

Hello. Yeah. Good evening. So, of course, on this AMISP players who are seeing the big contracts, they do work with us as suppliers, and frankly, we have got orders from IntelliSmart for supplying smart meters for them in AMISP projects.

Mohit Kumar — DAM Capital — Analyst

How are you looking at some of the large opportunities, sir, because numbers are too huge for them, yeah? Can we enter to some tie-ups where we have become exclusive supplier by offering them some better terms?

Jitendra Agarwal — Joint Managing Director

This relation is going to be a buyer-seller relation because the customer is also not going any long-term MOUs. This is because. They are also understanding the market more and more and getting into. So, the relationship is typical buyer and seller relationship and we are receiving orders from all the AMISPs who are working currently in the market.

Mohit Kumar — DAM Capital — Analyst

When you say, sir, that you’re in Q4, you’re looking to get large orders, let’s say, some large opportunities, are we looking for AMISP or you’re looking for to get these supply of meter tenders?

Jitendra Agarwal — Joint Managing Director

So, we are working on both. If you see our order book also, it is both, supply of meters and AMISP contracts. So, it is not — we as a company have the advantage of doing smart meters and be the leader of smart meters in the country. So, we are available in both the opportunities.

Mohit Kumar — DAM Capital — Analyst

Understood, sir. Second question is, sir, how many tenders worth are open at this, let’s say, are in tending mode right now as far as the [Speech Overlap] if you could throw some light here?

Jitendra Agarwal — Joint Managing Director

So, on the tendering, you want to understand more on the AMISP or both put together?

Mohit Kumar — DAM Capital — Analyst

Both, sir, both put together, yeah. Looking for that.

Jitendra Agarwal — Joint Managing Director

Okay. So, I’ll just give a — because this is a very — a subject which anybody would like to know. So, in total as on date, we have participated in tenders which are worth INR27,000 crores. And of that tenders, some are of AMISP on the capex model and some are conventional meters on the capex mode and some are on the opex model of fully metering, billing, and collection with no supply of meters. So, these are the four ways these tenders have been distributed. Primarily, they are RDSS tenders worth INR25,000 crores which we are participating in the states like — states or the customers like BSES, Power Grid, Chhattisgarh, M.P., Himachal, Assam, and Andhra Pradesh. These are live tenders going on worth INR25,000 crores. These are all RDSS tenders. Our current conventional designs are also — is on a very good traction. So, we have currently participated in tenders worth INR950 crores in the conventional meter tenders. Apart from these AMISP tenders, a lot of these companies like EESL, Tata Power, Tripura Energy, there are many companies who are also buying smart meters as a — on the capex mode. So, we have participated tenders what INR1,050 crores compared to capex mode. And there is also metering, billing, collection kind of tenders which we have participated. It is worth INR45 crores. So, in total INR27,000 crores of tenders we are participating.

Mohit Kumar — DAM Capital — Analyst

Last question, if I [Speech Overlap]

Jitendra Agarwal — Joint Managing Director

What will be participated, is going to be — but worth listening one thing, when we say live tenders participated, a lot of tenders are run by AMISP. In AMISP, our strategy is not that we are bidding almost every opportunity. We have been very selective in that. And then there are tenders worth INR49,000 crores which are to be participated, because there is a lot of AMISP tenders that have come up from Maharashtra, Bihar, U.P., Rajasthan, Goa, Uttaranchal, Sikkim, almost all the North states, Central states, and Eastern states have come out with the RDSS tender. So, that is what is going to be participated in next three months. And conventional tenders also there are many tenders in the conventional meters which will be participated in the next one month.

Mohit Kumar — DAM Capital — Analyst

Sir, last question on my side, sir, How do you see the revenues and margins in FY ’24 given this large order book?

Jitendra Agarwal — Joint Managing Director

FY ’24, we gave a guidance earlier also. We expect margins to become normal and top-line, we are giving a guidance of INR1,500 crores.

Mohit Kumar — DAM Capital — Analyst

Despite this order book, sir?

Jitendra Agarwal — Joint Managing Director

These are all AMISP tenders, and they take at least six to nine months to get into the group where that multifold installation in the SAP starts capturing. So, all these orders will take six to nine months to get into that of group complete cycle.

Mohit Kumar — DAM Capital — Analyst

Understood, sir. Thank you and all the best, sir. Thank you.

Jitendra Agarwal — Joint Managing Director

Thank you.

Operator

Thank you. Our next question is from the line of Devendra Pandey from DP Financial Advisory Services. Please, go ahead.

Devendra Pandey — DP Financial Advisory Services — Analyst

Hi. Good evening, and thanks for the opportunity. Sir, so my first question is that during the previous fiscal year, you had indicated that you have secured the semiconductor supply. So, why we are experiencing such a supply disruption in FY ’23 and when do we anticipate the semiconductor supply to return to normal?

Jitendra Agarwal — Joint Managing Director

As said by the Vice Chairman also, any disruption takes some time to get to normal. It is improving by the day. There is no second thoughts about it. You will see the improvement continuously. Yes, it has taken a little more time because we were also expecting it to be much better than the current situation. But yes, it took more time, but it is getting better. It is improving every. In future, you will see quarter-on-quarter improvement.

Devendra Pandey — DP Financial Advisory Services — Analyst

Understood. And given our strong order book, when can we expect the revenue traction to pick up?

Jitendra Agarwal — Joint Managing Director

Every quarter, you will see improvement.

Devendra Pandey — DP Financial Advisory Services — Analyst

Okay, sir. And my last question would be on the outlook for ’24. If you can provide the outlook in terms of our revenue as well as on our margin profile.

Jitendra Agarwal — Joint Managing Director

On the margin profile, we will go back to our normalcy in margin profile. And in the revenue guidance, what I’m giving currently is, because the things will take some time to be on the 100% normalcy, but INR1,500 crores is the minimum guidance we can give you right now.

Devendra Pandey — DP Financial Advisory Services — Analyst

Got it, sir. Very helpful. Thank you. Thank you so much.

Jitendra Agarwal — Joint Managing Director

Thank you.

Operator

Thank you very much. Our next question is from the line of Subrata Sarkar from Mount Intra Finance. Please, go ahead. Mr. Sarkar, your line has been promoted. Please, go ahead with your question. There is no response from the line from this participant. We will move on to the next question, which is from the line of Isha Savla [Phonetic] from IR Securities. Please, go ahead.

Isha Savla — IR Securities — Analyst

Hi. Can you hear me?

Operator

Yes, we can hear you now.

Isha Savla — IR Securities — Analyst

Hi. Thank you for taking my questions. So, sir, first of all, I wanted to understand that in the next two years, how much will the company have to invest in order to participate in AMISP?

Kailash Agarwal — Vice Chairman

Sorry, can you come again with your question, what do you want to ask?

Isha Savla — IR Securities — Analyst

Sir, just wanted to understand how much will you have to invest in order to participate in an AMISP?

Kailash Agarwal — Vice Chairman

So, we don’t need any investment for participating in any tenders. These are just the bank guarantees or EMDs that is required for participation in any tender of AMISP.

Isha Savla — IR Securities — Analyst

Okay. And just wanted to know when will we be required to make any capex given the anticipated multi-fold increase in the size of smart metering industry [Technical Issues]

Kailash Agarwal — Vice Chairman

…meters. So, we don’t think…

Isha Savla — IR Securities — Analyst

Sorry, I could not hear you because there was something in the background that cut us. Can you please repeat what you were saying, sir?

Kailash Agarwal — Vice Chairman

[Technical Issues]

Isha Savla — IR Securities — Analyst

Hello?

Kailash Agarwal — Vice Chairman

Almost 10 million meters. So, we don’t see any major capex happening [Technical Issues] Hello?

Isha Savla — IR Securities — Analyst

Yeah. Got it. And how will the company…

Operator

Sir, just one moment, please. We’ll move on to the next question, which is from the line of Anshuman Ashit from ICICI Securities. Please, go ahead.

Anshuman Ashit — ICICI Securities — Analyst

Yeah. Thank you, sir, for taking up my questions. Sir, firstly, sir, there was a news today regarding cancellation of one off the orders which was awarded to Adani in U.P. So, worth of that order and — sorry, part of that bid, can you please confirm on that?

Jitendra Agarwal — Joint Managing Director

So, first of all, it was not an order; it was a tender where Adani was L1. And that tender has been dropped and the U.P. government has come back with the tender again. And we did not bid in that tender.

Anshuman Ashit — ICICI Securities — Analyst

Okay. So, we weren’t part of that tender?

Kailash Agarwal — Vice Chairman

It was not awarded, it was just L1.

Anshuman Ashit — ICICI Securities — Analyst

Okay. It was just L1? Okay. Understood. Sir, secondly, sir, just trying to understand on the semiconductor issue. So, during the year, you had guided that we had some — so, for the current year FY ’23, we had booked some amount of semiconductors for our requirement. So, has that not gone through it and how do we expect this to resolve in FY ’24? Hello?

Jitendra Agarwal — Joint Managing Director

Hello? Sorry, my line got disturbed, I could not hear you. Can you come back, please?

Anshuman Ashit — ICICI Securities — Analyst

Yeah, I’ll repeat the question. Sir, on the semiconductor issue which we are still facing, so, we had guided that for FY ’23 as well, we had booked some quantity for our requirement. So, has that not come in and how does things stand over there and how do we ensure and resolve this issue going ahead in FY ’24?

Jitendra Agarwal — Joint Managing Director

We have, of course, long-lasting relations with the semiconductor companies and they were taking little more time. Yes, we have secured the suppliers, but some where still disturbed, even if you see for the supplier at the end of the day, you believe on the commitments of your suppliers. And they’re all top companies of the world. Through some time in getting back to the normalcy, due to which these delays have happened. So, it is improving by the day as I said earlier. Every quarter you will see the improvement.

Anshuman Ashit — ICICI Securities — Analyst

And sir, is — are we sourcing from China and Taiwan specifically or are there other geographies as well from where we are sourcing these semiconductors?

Jitendra Agarwal — Joint Managing Director

Hello? My phone is having some trouble. Can you repeat?

Operator

Mr. Agarwal, should I reconnect you?

Jitendra Agarwal — Joint Managing Director

Let us try again. Let us see now. Now I can hear you.

Operator

Okay.

Anshuman Ashit — ICICI Securities — Analyst

Okay. Sir, so the sourcing which you are doing for the semiconductors, is it limited only from China and Taiwan or are there other geographies — other countries as well from where we can source and we are in discussion?

Jitendra Agarwal — Joint Managing Director

China manufactures very, very low amount of semiconductors. So, this is not a China story, this is a worldwide shortage, which was due to COVID and multiple reasons. It is getting by the day and they’re all large conglomerates of the world. The largest semiconductor manufacturing happens in Taiwan, which goes long back and other parts of the world also. So, it is improving by the day. There’s nothing to do with China. Not majorly to do with China.

Anshuman Ashit — ICICI Securities — Analyst

Okay. And sir, so, — and congratulations on this order, the large order that we have received, it’s very heartening to see us coming in at a crucial time as well. So, sir, this is only from the State of Assam or are there multiple DISCOMs that have…

Jitendra Agarwal — Joint Managing Director

The State of Assam.

Anshuman Ashit — ICICI Securities — Analyst

Only from Assam?

Jitendra Agarwal — Joint Managing Director

Yeah.

Anshuman Ashit — ICICI Securities — Analyst

Okay. And sir, when can we expect the implementation to start?

Jitendra Agarwal — Joint Managing Director

So, implementation phase — it starts from after four to five months the implementation will start.

Anshuman Ashit — ICICI Securities — Analyst

Okay. And sir, on our Bihar project, so can you, please, give us some details on the status where we stand currently?

Jitendra Agarwal — Joint Managing Director

The status of the Bihar project is SAT has been done, site acceptance test, successfully that is completed. So, now we will be going live maximum within February, so we will be installing first 10,000 meter link will be live. And mass rollout will happen from last week of February or first week of March. So, we are well within the stipulated time, and we are working very closely with the customer and it is absolutely on the right track.

Anshuman Ashit — ICICI Securities — Analyst

So, I believe the milestone are at every 5% of implementation of meter. So, with every 10,000 meters — I’m sorry, every 50,000 meters, you will get the revenue. Is that understanding correct?

Jitendra Agarwal — Joint Managing Director

So, we will go live after first 10,000.

Anshuman Ashit — ICICI Securities — Analyst

Okay.

Jitendra Agarwal — Joint Managing Director

And then it is every 5%, the revenue will start showing.

Anshuman Ashit — ICICI Securities — Analyst

Okay. So, can we expect revenue inflow from this project in Q4?

Jitendra Agarwal — Joint Managing Director

Yes. Some revenue inflow will happen from this project.

Anshuman Ashit — ICICI Securities — Analyst

Okay. Understood, sir. And sir, one final question. Sir, where do we stand in terms of the restructuring? And by when should we expect it to get completed?

Jitendra Agarwal — Joint Managing Director

I think it will happen in this financial year, this one will get in, I think, in that the last week NCLT. So, I don’t remember exactly the date, but it is in Feb itself or first week of March, and we are very hopeful that we will be getting the order.

Anshuman Ashit — ICICI Securities — Analyst

Okay. Is it just that the date is getting extended or is there any other reason?

Jitendra Agarwal — Joint Managing Director

Yeah, that’s the only thing that — that there’s shortage of it at the NCLT level and that is — last two, three months, we are just getting the date.

Anshuman Ashit — ICICI Securities — Analyst

Okay. Understood, sir. Thank you, sir, and all the best.

Operator

Thank you very much. Our next question is from the line of Subrata Sarkar from Mount Intra Finance. Please, go ahead.

Subrata Sarkar — Mount Intra Finance — Analyst

Yeah. Sir, my last question on the AMISP business model. Sir, let’s say, with our existing the balance sheet, what kind of total AMISP orders we can get? And if you could help us to understand also like what is the business dynamics of that, like for — let’s say, for the order we have got of INR4,000 crores, like how much will be our capital requirement and how much debt we have to raise and like what is the execution period? If you could little bit explain the business model from a capex side as well as profitability side.

Kailash Agarwal — Vice Chairman

So, basically, here you have to understand one thing that company has given a guidance that where also the company will not be going for too much of leverages and all. So, basically, on the different tenders different payment and advance conditions and all, like Bihar, we had a advance of almost 30%. So, basically, on that and seeing our balance sheet spend only, we will be participating in the AMISP tenders or taking the meters orders from the different AMISP providers. So, it’s very clear in our mind that we won’t be leveraging our balance sheet to much on that. And regarding the execution, it is for the 27 months, it is a time being of 27 months. And the capex — and there is a condition that after every 5%, your revenue starts coming. So, basically, that way, after every 5%, we start supplying or we start putting this for doing the installation and all, we get –we’ll start getting the revenue. The total completion cycle is almost 27 months, but we are very sure that we won’t be leveraging our balance sheet too much. And only by balancing that, we will be going for AMISP or supply of meters only.

Subrata Sarkar — Mount Intra Finance — Analyst

Okay. So, in that case, sir, for this order only, let’s say, sir, how much our own capital will be required to execute this order giving all those conditions and 5% kind of a milestone given we will be getting? What is our estimate, sir? How much capital we will be requiring?

Kailash Agarwal — Vice Chairman

Almost 40%.

Subrata Sarkar — Mount Intra Finance — Analyst

Almost 40% of, sir…

Kailash Agarwal — Vice Chairman

Of the order size in next 27 months.

Subrata Sarkar — Mount Intra Finance — Analyst

Okay, So, INR4,000 crores — if it’s a INR4,000 crores order, almost we will be declaring like INR1,600 crores of…

Kailash Agarwal — Vice Chairman

It’s not all AMISP, it’s not that all INR4,000 crores all AMISP. Whatever is the AMISP, for that capital requirement of 40% will be required, I mean to say.

Subrata Sarkar — Mount Intra Finance — Analyst

Okay. Sir, can we know like out of this, how much is AMISP?

Kailash Agarwal — Vice Chairman

It must be around INR3,200 crores.

Subrata Sarkar — Mount Intra Finance — Analyst

Okay. So, 40% or INR3,200 crores. Is it clear on that? Okay. So, this is one thing. My second question is, sir, on the — our existing capacity side, we are — right now, we are operating at a much lower capacity. So, from — sir, as you explained, like there is a huge tender which is there potential is very much. So, from our existing capacity side, like how much we can execute, sir? Any idea on that? May not be exact number, but like how much we can go in terms of capacity utilization, sir?

Jitendra Agarwal — Joint Managing Director

So, capacity utilization will improve every quarter and we can do 10 million meters annually. This capacity utilization will improve from second quarter onwards, it will reach to a normal level of pre-COVID.

Subrata Sarkar — Mount Intra Finance — Analyst

Okay. No, sir. I’m just trying to understand what can maximum we can go. So, maximum we can go [Speech Overlap]

Jitendra Agarwal — Joint Managing Director

We can go to 10 million meters.

Subrata Sarkar — Mount Intra Finance — Analyst

10 million meters?

Jitendra Agarwal — Joint Managing Director

That’s our capacity, yeah.

Subrata Sarkar — Mount Intra Finance — Analyst

Okay. And sir, lastly, although we have discussed, sir, like, we don’t think, sir, like the huge order book or tendering, which is taking place, vis-a-vis, sir, still there is some constraint on that semiconductor side. So, we think we can navigate that semiconductor issue, sir? That will not actual constraint for us to getting order from — only from a semiconductor side, sir?

Jitendra Agarwal — Joint Managing Director

It should not. We are seeing the normalcy happening very, very fast. We are confident that next quarter onwards, the things should be pretty normal.

Subrata Sarkar — Mount Intra Finance — Analyst

Okay, sir. Thank you, sir. That’s all from my side.

Jitendra Agarwal — Joint Managing Director

Thank you.

Operator

Thank you very much. [Operator Instructions] The next question is from the line of Akshay Kothari from Envision Capital. Please, go ahead.

Akshay Kothari — Envision Capital — Analyst

Yeah. Thanks for the opportunity. Sir, first of all, do we foresee any improvement in our working capital cycle, our better days?

Jitendra Agarwal — Joint Managing Director

Yeah. It will surely be improving, because most of — now, the most of the business is coming by AMISP where no working capital cycle is required. You have — you need a capex and then that will be coming on the monthly basis and all. And secondly, most of the meters supplied will be supplied to the other AMISP holders. So, basically, their payment terms are always better and we will be working in some cases in advance also. So, our working capital cycle mainly — there won’t be — there will be a very lesser business directly with the electricity boards and all of the distribution companies. So, our working capital cycle will surely improve after that.

Akshay Kothari — Envision Capital — Analyst

Currently, I think our maturities are around six months. So, what improvement…

Kailash Agarwal — Vice Chairman

Yes. Our total working capital cycle right now is almost around 200, 210 days and it will shortly be improved.

Akshay Kothari — Envision Capital — Analyst

So, by how much it can improve? Any…

Kailash Agarwal — Vice Chairman

It can improve at 20% for sure. 20% to 25%.

Akshay Kothari — Envision Capital — Analyst

20% to 25% reduction? Okay. I mean, it will more largely be on account of production and better days?

Kailash Agarwal — Vice Chairman

Yeah. Mainly on the better days only.

Akshay Kothari — Envision Capital — Analyst

Okay. And sir, does the management have any guidance for any ROE because what I can see is we have some investments in corporate bonds, which is okay, we have also invested in equity shares of some companies. Now on one hand, we have borrowings; on other hand, we are investing in stock market. So…

Kailash Agarwal — Vice Chairman

We are not borrowing anything right now. We are a net-debt company. If we require to borrow, then we will be bring out our treasury funds for sure. We will not be keeping our treasury funds in that. And the type of business we are in, we need some cash balances with the balance sheet always. You don’t know what type of — because, we are dealing with the customers like electricity boards and all. So, sometimes the cash crunch. So, that’s the strategy of the company to keep some cash at the balance sheet. It’s the type of liquid-only. We can immediately get our funds and all. So, that’s why — and secondly, right now, we don’t require any debt. We are not increasing any debt since last so many years. It is rather decreasing. So, whenever the company requires the money, it’s the company’s money only, and it can come back from treasury anytime.

Akshay Kothari — Envision Capital — Analyst

Okay. So, even the short-term borrowings, we won’t fund through our own money. We would have keep on taking in borrowings, right? For funding the working capital, we will have put in borrowings?

Kailash Agarwal — Vice Chairman

Right now, as I told you, we are not taking any borrowings and I don’t — we don’t see also right now any requirement of borrowings.

Akshay Kothari — Envision Capital — Analyst

So, as on September, there was INR243 crores of short-term borrowings?

Kailash Agarwal — Vice Chairman

So, that’s basically continue — that is reducing last two, three years you see, that it is at the same level or at the reduced level.

Akshay Kothari — Envision Capital — Analyst

Okay. Understood. And does the management have any ROE guidance?

Kailash Agarwal — Vice Chairman

Basically, now the numbers are improving on that. You will see a better ROE surely in the coming years.

Akshay Kothari — Envision Capital — Analyst

Okay, sir. And, sir, I just missed that part. What would be the order execution cycle of this order book, INR4,000 crores order book?

Jitendra Agarwal — Joint Managing Director

So, all this AMISP tenders we have an installation period of 24 to 27 months. And then for ATS, you have to do the [Indecipherable]

Akshay Kothari — Envision Capital — Analyst

Okay. So, 24 to 27 months would represent what percentage of the order book?

Jitendra Agarwal — Joint Managing Director

24 to 27 months will represent almost 50% of the order book because all the supply and installation will be done by that.

Akshay Kothari — Envision Capital — Analyst

Okay. Understood. And O&M, what is the order book, ATS one?

Jitendra Agarwal — Joint Managing Director

So, at the AMISP, what you have to understand is the AMISP business happens in a way where we are given some money in advance for doing installation and the major money comes as rental income per meter per month.

Akshay Kothari — Envision Capital — Analyst

Okay. So, this order book does not include that…

Jitendra Agarwal — Joint Managing Director

It does include. It’s a complete amount.

Akshay Kothari — Envision Capital — Analyst

Okay. I’m just asking out of that INR3,200 crores, do we have some breakup quantification or there is no breakup?

Jitendra Agarwal — Joint Managing Director

We have breakup in watt size.

Akshay Kothari — Envision Capital — Analyst

[Speech Overlap] The O&M part.

Jitendra Agarwal — Joint Managing Director

How much is the…

Akshay Kothari — Envision Capital — Analyst

How much is the O&M part?

Jitendra Agarwal — Joint Managing Director

So, when you say INR3,200 crores, you have to understand one is, how the execution will happen. You don’t get the money from the customer in O&M, it’s like this is the O&M you’re doing, you will get per meter per month like this. It’s not that. It is design, finance, build, operate, own, operate, induction. This is the whole process of AMISP. When we have taken an AMISP order, we will have to finance and do the supply and the installation. During the supply and installation, some portion of the money, like in case of Bihar, they’re giving us 30% money. In case of Assam, they’re giving us 15% money. And the remaining is per meter per month. So, whether you call it O&M, whether you call it — whatever you call it, this is how the revenue is going to happen.

Akshay Kothari — Envision Capital — Analyst

And the remaining is essentially over a period of eight years, right?

Jitendra Agarwal — Joint Managing Director

Over a period of eight years. So, it is like 93-year instalment for 90 equal instalments.

Kailash Agarwal — Vice Chairman

Here you have to understand that, basically, the 50% of the total order value will be come — almost 50% will be completed in next 24 to 27 months, where the thing is to complete the installation and supply of meters. So, that 50% will be revenue — will come as a revenue in the books of the — but the thing is that will be coming in instalments, monthly instalments. So, there are two things. The revenue and the payment. So, the money — this is where the company will invest, put the infrastructure, put the meters, do the installation and that money will be coming on monthly basis from electricity board in next eight years with maintenance to be done by the company.

Akshay Kothari — Envision Capital — Analyst

Okay.

Kailash Agarwal — Vice Chairman

So, 50% is that, 50% is that; put together, 100% will be coming in eight years.

Akshay Kothari — Envision Capital — Analyst

Understood. Sir, lastly, I was reading today in the newspaper, there are some quality control order, and in that smart meters are also included. So, is this any beneficial news for the company is it that already we are the bigger players, so we know what is needed to…

Jitendra Agarwal — Joint Managing Director

So, I don’t know which particular news item you are talking about. So, I can’t comment on that. But yes, anything to do with the quality of the product is always good for companies like us. And more and more consumer awareness or the customer awareness will surely help the cause for the companies like us and the overall cause of the project.

Akshay Kothari — Envision Capital — Analyst

Okay. Sir, do we also export?

Jitendra Agarwal — Joint Managing Director

Yeah, we do.

Akshay Kothari — Envision Capital — Analyst

Sir, what is the — our export as a percentage of revenue?

Jitendra Agarwal — Joint Managing Director

So, for this financial year, the percentage will be fairly good. So, exact percentage, I’m not in a position to tell you right now. But it is closer to 10%.

Akshay Kothari — Envision Capital — Analyst

Okay, sir. That’s it from my side. Thanks, sir.

Jitendra Agarwal — Joint Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] Our next question is from the line of Suraj Nawandhar from Sampada Investments. Please, go ahead.

Suraj Nawandhar — Sampada Investments — Analyst

Hello. sir. Good evening. Sir, my first question is that we had a bit of higher other income this quarter, around INR21 crores. What is it regarding?

Jitendra Agarwal — Joint Managing Director

Sorry?

Suraj Nawandhar — Sampada Investments — Analyst

We had higher other income, sir, this quarter, INR21 crores.

Kailash Agarwal — Vice Chairman

This is basically a notional income only. You are seeing in consolidated, not stand-alone. Stand-alone if you see, it’s other income of INR8.21crores only. The other income INR21 lakhs is in consolidated. That is actually a notional number on the valuation of the bonds and other securities we are having. So, that reduces — that’s a fair valuation of those securities. So, that is the increase in that only. It’s not an absolute actual number.

Suraj Nawandhar — Sampada Investments — Analyst

Okay. And sir, around a month back, we had created a couple of subsidiaries and we were also looking out for partners for this new order. So, is there any development on that? Have you shortlisted? Are we in talks with someone? And what sort of tie-up are we looking at? Any strategic tie-up or just a financial partner who can fund such large orders for AMISP where we need to put in at least 50% of that amount will be blocked for a long period of time? So, is it a strategic tie-up or just a financing sort of a tie-up? Are we in talks with someone?

Kailash Agarwal — Vice Chairman

We are already exploring many, many permutations and combinations on this. And will let the investors know once something concrete will happen. We’ll surely know everybody. Right now, we are exploring all the opportunities, whatever is possible for company.

Suraj Nawandhar — Sampada Investments — Analyst

All right. Thank you. All the best.

Jitendra Agarwal — Joint Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] Our next question is from the line of CA Garvit Goyal from Investor Search [Phonetic] Please, go ahead.

CA Garvit Goyal — Investor Search — Analyst

Hello. Good evening, sir. Am I audible?

Kailash Agarwal — Vice Chairman

Yeah.

CA Garvit Goyal — Investor Search — Analyst

Yes, sir. Sir, my question is from the return on capital employment side. Your ROC is at single-digit or lower two-digits side basically. So — but you are having a market share of around 27%, 30% in electric meters and that is specifically high in smart meters as well. So, I wanted to just understand what is the reason we don’t have any decent ROC level, sir? And going forward, how you are looking at this, sir?

Kailash Agarwal — Vice Chairman

So, basically, when you talk about ROC, two things we have to understand. One, that the working capital cycle of the business is very long, and due to last two years or three years of COVID, that has also increased very badly. So, now it is improving and in the coming years, we will surely see in the — as we were talking that there will be a reduction in working capital cycles also, so there will be a reduction in surely a capital employment also — employed also. So, we will surely see that there will be a very good improvement in the ROC for sure. It was bad due to COVID years. The cycle went very long in last two, three years.

CA Garvit Goyal — Investor Search — Analyst

Okay. That’s it from my side, sir.

Operator

Thank you very much. Our next question is from the line of Nikhil Jain from Galaxy International. Please, go ahead.

Nikhil Jain — Galaxy International — Analyst

Yeah. Thank you for the opportunity.

Operator

I’m sorry. We cannot hear you very clearly. Can you please come closer to the phone?

Nikhil Jain — Galaxy International — Analyst

I’m very close. Okay. Let’s try again. Are you able to hear me now?

Operator

Yes, sir.

Kailash Agarwal — Vice Chairman

Yeah. Better.

Nikhil Jain — Galaxy International — Analyst

Hello?

Kailash Agarwal — Vice Chairman

Yeah. it’s better, please.

Nikhil Jain — Galaxy International — Analyst

Hello?

Operator

Mr. Jain, please, go ahead with your question. We can hear you now.

Nikhil Jain — Galaxy International — Analyst

Yeah. So, I just — thank you for the opportunity. I just wanted to ask — congratulate the management on getting the two AMISP deals which are worth INR3,400 crores in the last two quarters. So, that’s a great performance. Just wanted to get a sense of what is the kind of, let’s say, IRR expectation that management may have from these AMISP deals that we are kind of getting and grabbing? So, that is question number one.

Jitendra Agarwal — Joint Managing Director

That’s very business confidential. I’m sorry, I cannot reveal that.

Kailash Agarwal — Vice Chairman

Already a lot of tenders are going on and we are…

Jitendra Agarwal — Joint Managing Director

It’s okay. It’s a business confidential.

Nikhil Jain — Galaxy International — Analyst

Okay. Fair enough. Also, the second thing is [Technical Issues]

Operator

Sorry, but your voice is breaking up.

Nikhil Jain — Galaxy International — Analyst

Okay. The second thing was that out of this [Technical Issues]

Kailash Agarwal — Vice Chairman

Mr. Jain, your voice is breaking.

Operator

I’m very sorry. We cannot hear you, sir. Maybe you can take your questions offline. Ladies and gentlemen, we will take that as the last question. I now hand the conference over to Mr. Kailash Agarwal for closing comments. Please, go ahead, sir.

Kailash Agarwal — Vice Chairman

Thank you all, ladies and gentlemen. We — the company is sitting on a very good order book. The only thing you could not see is the execution in last few quarters. But we assure you that now the things are — the days are over and we will be executing very well and the things are improving very well. And you will see — start seeing good numbers in coming quarters and all. And a lot more is going to happen and a lot of tenders and lot of things are happening at the ground level. We assure you that the company will be doing very good. Thank you very much for your time and all. Thanks a lot.

Jitendra Agarwal — Joint Managing Director

Thank you, everybody. Have a good day. Thank you.

Operator

[Operator Closing Remarks]