Genus Overseas Electronics - Rs.97.00

Established in 1995, Genus Overseas Electronics Ltd (GOEL) is a leading manufacturer Electronic Energy Meters, Hybrid Microcircuits, Printed Circuit Boards and other electronic products. The speciality of GOEL is thick film hybrid micro circuits (HMCs) and Surface Mounted Assemblies (SMAs) with the latest technology from Germany to cater to the requirements of Telecommunication, Defence, Automobile, Informatics, Medical Electronics and Instrumentation sectors. The strength of the company lies in its strong Design & Development team, which was instrumental in development of Low end ASIC based Electricity Meters to High end Programmable Multi-functional Intelligent Single Phase & Three Phase Meters with in-built advanced security and anti-tamper features. The company is exporting its products to developed nations like USA, U.K., Germany, USA, Italy, Korea, Malaysia, Bangkok etc. Recently, it opened a full-fledged office in USA through which it targets deeper penetration of its products in the US and European markets.

GOEL has an integrated state-of-the-art manufacturing facility in Jaipur, which produces Hybrid Microcircuits and PCB Assemblies up to 4.50 million square inches and 30 million square inches respectively. It also produces more than 2.4 million Single Phase and Three Phase Electronic Electricity Meters annually. Interestingly, the company has ISO-9001, EMC, IECQ, C-DOT, CACT and ISI certifications and its products meet MIL STD 833D, JSS 51400 and BS 9450 standards. Recently, GOEL has diversified its revenue stream by entering into other electronic products and solutions such as inverters/UPS, set-top box, tariff meters and energy audit system. Moreover, the company has added Digital Taximeter, Pre-Payment Meter, AMR enabled Meters etc. in its product portfolio. Mandatory use of electronic meters under new rules and the huge replacement demand from state electricity boards (SEBs) is expected to accelerate the demand significantly over the next 3-4 years. Currently it has orders of more than Rs.100 cr. in hand.

Fundamentally, the company is quite strong and growing at an enormous pace. For FY05, its sales increased by 65% to Rs.132 cr. while its NP jumped 121% to Rs.7.9 cr. leading to an EPS of Rs.8 on its current equity of Rs.10.20 cr. Its OPM remains stable at 12%, which is quite a positive sign. Considering its future growth prospects, it can report Sales of Rs.190 cr. and NP of Rs.15 cr. for FY06. This works out to an EPS of Rs.12 on the diluted equity of Rs.13 cr. As the share price has seen a smart rally, investors are recommended to accumulate gradually at sharp dips for the long term. The share price can double in 15~18 months.