GMR Power
Stock Snapshot
Price Performance
Vista Outlook
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GMR Power's recent strategic pivot towards high-growth segments such as Smart Metering and Renewable Energy is a critical development that aligns with Vista's forecast of stable revenue growth and improving margins. Management's 'GPUIL 2.0' strategy, which includes a significant brownfield expansion and the establishment of new subsidiaries, is expected to enhance the company's competitive position and market share in the renewable sector. However, the presence of substantial overdue receivables poses a risk to cash flow, potentially impacting earnings in the short term. Vista's outlook anticipates a gradual improvement in profitability, supported by a favorable industry backdrop characterized by robust demand for solar energy and green hydrogen, projected to grow at a 22% CAGR. Despite the positive long-term growth prospects, the elevated leverage and weak interest coverage raise concerns about financial stability. Over the next 12-24 months, key opportunities include the successful execution of smart metering projects and the conversion of warrants, while watchpoints include cash flow management and the impact of traffic declines on existing assets
Why We Like This Stock
- Management's 'GPUIL 2.0' strategy targets high-growth segments, enhancing revenue potential
- The renewable energy sector is poised for significant expansion, driven by strong domestic demand
- Upcoming smart metering project awards could provide additional revenue streams
Things To Watch Out For
- Substantial overdue receivables of ~INR 6.8bn pose a cash flow risk
- A 13.3% YoY traffic decline on the Ambala Chandigarh toll road indicates challenges in existing assets
- Elevated leverage and weak interest coverage increase financial risk
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 4,489 | 6,344 | 7,332 | 6,451 | 7,522 |
| Profit Before Tax (Cr.) | -518 | -129 | -183 | -68 | -106 |
| PBT Margin | -11.5% | -2.0% | -249.6% | -1.1% | -1.4% |
| Net Profit (Cr.) | -552 | -287 | -182 | -52 | -81 |
| Earnings Per Share | -6.8 | -5.4 | -2.5 | -0.7 | -1.0 |
Analyst Recommendations
No analyst recommendations available.
Company Overview
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GMR Power And Urban Infra Limited engages in the energy, urban infrastructure, and transportation businesses in India. It operates through Power, Smart Meter Infrastructure, Roads, EPC, and Others segments. The company generates energy through coal based thermal plants, hydropower plants, and solar and wind, as well as offers installation of smart meters. It also involved in the development, operation and maintenance of highways, as well as provides engineering, procurement and construction (EPC) solutions for highways and railways, and development of special investment region and others. In addition, the company engages in coal mining and exploration activities; maintenance and operation of special economic zones; and construction business including EPC contracting activities. Power And Urban Infra Limited was incorporated in 2019 and is based in New Delhi, India.