India’s power distribution space is experiencing a significant transformation, driven by the advancement of smart grid technology. Smart meters continue to see gradual implementation, albeit at a slow pace. There are notable signs of improvement in key monitorables like AT&C losses, collection, and billing efficiencies. AT&C losses for power distribution companies (discoms) have been consistently decreasing, from 22.3% in FY21 to 17.6% in FY24. Among states, Bihar and Assam witnessed the highest number of meter installations. We expect awarding (muted in FY25) and implementation to see material pick up in FY26 and thereafter. In this space, we like Genus Power Infrastructure, given its large size, its end-to-end services offerings, including setting up advanced metering infrastructure (AMI) and facility management systems (FMS) after installation. With only 25mn (including other scheme) smart meters installed as of Apr-25, we believe the growth opportunity is sizable, while execution remains the key.
Globally, advanced countries like Japan and USA are leading, with penetration level of 77% and ~82-85%, respectively, as of end-CY24. For India, of the targeted 250mn smart meters by CY26, only 25mn has been installed as of end-FY25. The delay has been mainly due to the state and general elections, labor unavailability, and consumer resistance to smart meter installations, among others. We believe a strong government push would be crucial for accelerating the implementation. However, with the sunset date for the scheme set for CY26, an extension is likely.