Gensol is crazily undervalued currently. I feel if their EV leasing and manufacturing business was separate, their market cap would be more than double. My rationale being that standalone P/E is 19x for their Solar EPC business. Where else in the market can you get solar businesses for even double that P/E. The car delay is not a big issue… i would rather wait and have a great product launched. September operating cash flows have been great too and hopefully dilution reduces
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Another order win
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Gensol engineering is not a standalone company it is a part of a big solar group
“Gensol group”
Gensol group have multiple solar based companies so gensol engineering have full support of expertise in solar industry
And solar industry is at a boom currently
Which companies will get most benifit by reducing solar modules and solar panel raw materials price’s?
Manufacturers or EPC Companies??
Answers is crystal clear manufacturers will suffer and Solar EPC companies will get benifit.
BESS
Gensol 30% Order book is of BESS projects right? 3200 CR
Let me tell you a intersting information.
Gensol won these orders above 50% of cost compare to today BESS Projects bids
That’s why anmol ji has said
Why drop in BESS projects bids ? Because lithum ion prices declined by 50%
So gensol will make more IRR than expected.
Gensol group management is significantly experienced in Solar industry they have sold a solar based artificial intelligence company to IBM inc. recently.
Param renewable is also owned by Gensol group engaged in O&M of solar panels by Robots and Ai (have 1000+ employees)
So relax and accumulate
Disc- 44-45% of my portfolio
Highest allocation for me
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Agreed that the business is promising and going to do well in the future.
But there’s a reason that gensol trades at a discount to its peers, it’s because of high debt and uncertainties regarding the ev manufacturing.
From what I understood the ev manufacturing business will break even only after a certain volume of cars is sold, until then it will be a cash burning segment.
Personally I also don’t like how the promoter is part of multiple other businesses apart from gensol, indicating a lack of focus.
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I’m not sure if people will be willing to buy a 2 seater ev car when there are more practical cars like MG comet.
Agreed, their EV would more or less look like the Strom Motors R3, which is an electric vehicle designed very much like the Gensol’s EV. I don’t think even handful of people in India would opt to buy it for personal use, so which means this vehicle will mostly be used by ride hailing companies like BluSmart, and the adoption of this vehicle depends on the price range in which it will be launched. Since it’s a 2 Seater vehicle, which means it’s basically a 2Wheeler EV with a roof and an extra wheel, so earning potential of this vehicle for any ride hailing company is very similar to any other 2 Wheeler in the market, now it is there call to take whether they want to invest on a fleet of 2 seater cars or not, very tricky position for Gensol in my opinion, considering this is their first launch, and first impressions last longer than we anticipate in a sensitive market like India.
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Thoughts on the Gensol EV
In the Q3FY24 conference call, Anmol Singh Jaggi discussed the rationale for the small urban car.
- More than 70% of the trips on BluSmart are single-user trips
- The Tata Tigor used by BlueSmart competes in the Uber Prime Segment. There is no equivalent Uber Go segment EV.
- A Tata Tigor costs Rs 25 per km. This could drop to Rs 15 per km in “a very safe car, in a very nice car, which is maybe two door, two seater”
- “The small EV car is the solution to congestion.”
In the Q1FY25 conference call, he said that the Gensol EV would be a B2B product with a fleet variant and a cargo variant.
He mentioned a “personal mobility” variant as well but said that the target date for that is 2026 or later post the B2B variant.
He also said this would be a “feature-rich” vehicle.
As such, I expect this EV will slot above the auto-rickshaw and below the sedan cabs. And BluSmart will be the anchor customer for this EV.
As a B2B vehicle, looks are not important, especially as the B2C variant is not yet on the horizon.
So there seems to be a reasonably strong business case for this EV.
But let’s see how execution plays out and how the market receives it.
PS: FWIW, the MG Comet has seen dwindling numbers and has not been in production since June 2023. And so the plan of selling the Gensol EV as a personal EV is questionable.
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Auto rickshaw can seat 3 customers whereas gensol ev will only seat 1 customer. Sure tech wise it will be feature rich but what’s the point of tech features for the customer who just wants to reach from point A to B.
I’m also concerned about the range of this small car. It would be very difficult to go for long distances.
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Seems the company does not do any market research .
A person looking for a 2 wheeler will any day opt for an Ola EV . Car is still very much an aspirational product and a 2 seater will not find any buyers. The Bajaj Cute is a better proposition than this absurd EV.
Only use case I can foresee could be Airport Taxi for 1 adult ( that too without luggage ) as 2 wheelers / auto rickshaws are not allowed in many of the airports .
Seems a marketing stunt and something to hype up the market
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I asked the MD about the target audience for this vehicle, he said it’s meant for ride-hail companies since 90% of trips are single passengers. So, basically, they can provide a car with AC, airbags, etc at the cost of a Rickshaw.
Niche audience in my opinion, most people just prefer bikes. The only time I find this usable is maybe in extreme temperatures like too hot or too cold, or rain.
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How can anyone say “marketing stunt”
It’s a reward of 2 years hardwork for company.
We must track developments closely and in unbiased way.
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It will not be the cost of an auto, but it will not be much more expensive. Easily can be many ride hailing companies single seater solutions that they can offer to customers for a much lesser price. Hoping for the best.
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3c787516-7914-472a-a4b6-3be00c8520a0.pdf (309.9 KB)
Another order of 1000+ Crs.
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How economics work in solar projects?
What is the average cost of a 1MWac solar project?
In this podcast
Anmol ji is saying 1MWac cost around 3 Cr INR
On internet I have found it takes 4-5 Crs inr per MWac
On an average previous orders value was above 4.5 Cr rs of 1 MWac capacity
Today order value is 3.8Cr INR per MWac
Sudden drop is concerning
I didn’t find any difference in recent and old projects but why so big difference in order value?
On Twitter a user is saying gensol will not earn more than 2% OPM on these 2 recent orders accounting total 500 MWac capacity
I also feels same.
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At 100 MW project, cost of 1MW will come out to be max 4 crore since due to economies of scale, cost of electrical components is divided. Cost of transmission line, transformer, substation reduced drastically per unit in such a big project. Profit margins will remain same as per the industry standard.
60-65% of the cost is for panels which will increase proportionately with the size of project. But per units cost of other electrical works and civil structure reduces per unit MW installed.
Gensol recently did 22 MW project at 88cr which comes out to be 4 cr/MW. Removing the 3 year OM cost of 3 cr and GST component(avg 15%), per MW cost comes around 3.35 cr / MW.
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