Gensol Engineering Limited — Credit Ratings, 19-11-2024: Credit Rating

**Consolidated Financial Summary: Gensol Engineering Limited**

For FY2024, Gensol Engineering achieved an operating income of ₹963 crore, more than doubling from ₹398 crore in FY2023, representing a growth of approximately 142%. This growth is primarily driven by a healthy order inflow and execution in the solar EPC sector, aligning with India's renewable energy expansion goals. The consolidated net profit for FY2024 stood at ₹53.4 crore, up from ₹23.3 crore the previous year, with an Earnings Per Share (EPS) of approximately ₹6.53. Profitability improved, with an operating profit margin (OPM) rising to 23.9% compared to 20.8% in FY2023.

Operational costs rose due to scaling up activities, but the company has strategically managed its expenses, achieving a degree of cost control. The balance sheet reflects a total debt of ₹1,512 crore, resulting in a total debt/tangible net worth ratio of 6.4x, though improvements are expected from ongoing equity infusions. The company's effective management has also led to a reduction in leverage in H1 FY2025.

Strategically, Gensol remains focused on expanding its solar EPC business, supported by a robust order book of ₹5,200 crore, which offers strong revenue visibility. The entry into the EV manufacturing segment also presents growth opportunities, albeit with initial capital requirements and expected operating losses.

Investor Insight: Given the strong revenue momentum, expanding order book, and strategic diversification, a *hold* stance is suggested, while closely monitoring project execution risks and operational efficiencies in both its core and emerging business segments.