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Shares of Genus Power Infrastructure rallied over 11% to 78 on the BSE in Wednesday's deals. Brokerage house ICICI Securities is bullish on the multibagger stock post Genus Power's Q3FY22 results as it expects orders to likely pick up substantially.

Good order inflow during Q3FY22 boosted the orderbook to 11.6 billion as against 8.8 billion at Q2FY22-end. Management expects the restructuring process to be complete by Q1FY23-end, the brokerage highlighted.

“Outlook from FY23E onwards is expected to be much brighter due to improvement in semiconductor availability (GPIL has fully tied up for its FY23 requirement), decline in prices of key raw materials, and exponential increase in tendering pipeline on the back of the 3 trillion smart metering scheme," said ICICI Securities in a note.

The brokerage has a Buy rating on Genus Power Infra shares with a target price of 117 apiece. The stock has rallied over 123% in a year's period, whereas, it is up over 11% in 2022 (year-to-date or YTD) so far. 

Double whammy of all-time high commodity prices and reduced capacity utilisation due to semiconductor and other electronic component shortages continue to affect Genus Power Infra's margins. For Q3FY22, revenues were up 16.6% year-on-year (YoY), however, EBITDA was down 28.2% from the same quarter last year. 

“As semiconductor availability is likely to remain an issue in the near term, GPIL has tied up for its semiconductor requirement of 10 mn meters (90% of total capacity) for FY23, and expects to reach normalcy in terms of capacity utilisation and margins by Q2FY23. Further, in case of reduction in raw material prices, the company may gain as >75% of its current orderbook has the recent raw material increase incorporated," ICICI Securities added.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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