Detailed analysis on Genesys International Corporation Ltd.

Increased government support and favourable industry dynamics should act as principal growth enablers for Genesys International Corporation Ltd. Genesys International Corporation Ltd. has raised its shareholding in A N Virtual World from ~66% to ~97.50% during FY23.

Company overview:

Genesys International Corporation Ltd, which was established in 1995, is a pioneer in advanced mapping, survey and geospatial services. The company has a unique blend of understanding emerging consumer applications regarding mapping technology and capability on enterprise side to give solutions regarding state-of-art remote sensing; LiDAR, aerial survey, photogrammetry, ICT based e-governance solutions, etc.

Genesys International Corporation Ltd believes in power of mapping technology to increase efficiency of enterprises and for greater good of every Indian.

Business model of Genesys International Corporation Ltd.

With support of team of more than 2000 professionals who have rich experience, Genesys International Corporation Ltd. delivers expertise services in Geographical Information System (GIS) and Geospatial Engineering domain. It has been categorised as a largest LiDAR acquisition company who has expertise in processing capabilities in world.

The company operates a range of geospatial production and application development centres throughout India. Given its state-of-art infrastructure and list of Fortune 500 and SME clients, the company seems to be well-positioned to play strong role in global GIS and Geospatial services industry. It continues to service its clients throughout globe for previous 23 years, and most of its client engagements are running into multi-year partnerships.

Track record of management

Dr. Aniruddha Roy: He has over 25 years of rich experience in Business Management, technology services, system integration, etc. He is Chief Technology Officer of the company. Before joining board, he was working with Navyuga Engineering Company Ltd. in position of Vice President – Strategic Business. He is an alumnus of IIT Roorkee and his 25 years career track record spans throughout IIT Bombay, NIIT (ESRI India) and Navyuga group. He speaks about survey, mapping and geospatial application field in National and Global conferences.

Dr. Shivendra Tripathi: Mr. Tripathi has over 20 years of strong experience in Sales and Networking skills. Before joining board, he was working with RMSI as Head of Agriculture & Forestry. Mr. Tripathi has strong knowledge of GIS market and has analytical and marketing abilities which are critical for an organisation. He has strong network in Middle East, Far East and African Countries. He is Senior Vice President of Genesys International Corporation Ltd.

Mr. Sameer Sankhe: He is Chief Digital Officer of the company and is an inventor, tech entrepreneur, and strategy consultant. Before joining the company, he has worked with Salesforce.com (where he was Head of Digital Transformation Consulting, India), Tata Projects and BTS.com.

Financial performance of Genesys International Corporation Ltd

On standalone basis, sales of Genesys International Corporation Ltd saw an increase to INR17,991.20 lakhs for current year against INR11,962.92 lakhs in previous year. The company saw net profit of INR3,845.94 lakhs for current year against net loss of INR8,437.95 lakhs in previous year.

In FY23, the company saw highest-ever yearly revenue and PAT growth of 50% and 146%, respectively. Standalone revenue from 12M23 surpassed FY22 revenue by ~50.24%. Trade receivable balance in standalone financials grew by ~71.57% by end of FY23 at INR8,432.20 lakhs from INR4,914.60 lakhs at end of previous year. This rise was mainly because of increase in operating revenue of the company in FY23.

Cash & cash equivalent and other bank balance, which includes balance in deposit and margin money accounts, collectively came in at INR1,596.14 lakhs as at March 31, 2023 in comparison to INR2,191.46 lakhs as at March 31, 2022 in standalone financials. In consolidated financials, similar balances collectively were INR1,799.35 lakhs as at March 31, 2023 against INR2,196.73 lakhs as at March 31, 2022.

Improved financial performance in FY23 was due to function of pivot in the company’s business model and several investments the company made in digital twin space. Alliances with global leaders and numerous path breaking geo content work the company undertook manifest in financial results. Digital twins /3D modelling of world should become a critical part of what digitisation paves way to engage and govern in more efficient ways.

Focus of the company is on building out most advanced 3D and 2D map platform. Towards that end, the company built a largest aerial 3D capability presently in India.

It's digital twin map stack is being accepted in India and in middle east as the company established a wholly-subsidiary in Saudi Arabia. Organization structure with new talent from renowned big technology companies appears to be aligned to pivot to its content program/Saas model.

Industry analysis

Geospatial industry is extremely important in today’s connected world, giving technologies and solutions which can leverage location-based data to address a range of challenges and opportunities. Geospatial technologies have evolved over past several years and their applications have become mainstream throughout multiple sectors. This industry continues to see significant developments and innovations across numerous technology trends. Indian government recognized strategic importance of geospatial technologies and it has initiated numerous programs and policies to harness potential of GIS in a range of sectors. Indian government’s commitment to promoting geospatial industry resulted in significant growth and development in this particular field.

Geospatial market outlook seems to be highly promising as a result of numerous key factors which contribute to its positive momentum. Geospatial technologies, including geographic information systems (GIS), satellite imaging, terrestrial mapping and Global Positioning System (GPS) continue to see higher adoption throughout numerous industries. This is because governments and organizations recognize importance of location intelligence in making sound decisions and optimizing processes.

Future prospects of Genesys International Corporation Ltd

Genesys International Corporation Ltd has developed important alliances with global big-tech corporations, for delivery of world class datasets, according to their defined project scope and specifications aligning to quality standards. Distinctive asset is the company’s ownership of expansive ~8.3 million kms of Indian road network data.

Formidable resource supports the company venturing into novel domains, including commerce, automotive and last-mile logistics. Through evolving portfolio for accommodating diverse industry requirements, the company targets adaptability and forward thinking. As a result of the company’s profound industry expertise, collaborative ethos, and innovative solutions, it should achieve strong growth and influential contributions within evolving geospatial landscape of India.

Geospatial technology market has significant opportunities driven by various trends and industry demands. Firstly, higher demand for location-based services resulted in popularity of navigation, ride-sharing, and real-time delivery tracking apps. This has created strong market for geospatial technology providers. There is increasing trend in existing smart cities to upgrade to 3D GIS to increase urban infrastructure efficiency. This is where geospatial technology should play a critical role in planning and implementation, providing innovative solutions to address certain urban challenges. Integration of geospatial technology with Internet of Things (IoT) continues to unlock new possibilities for real-time location data in some of IoT devices.

Given all these opportunities, Genesys International Corporation Ltd should be able to take advantages as a result of its healthy market share, liquidity profile, and balance sheet capability.

Risks

Indian geospatial market has significant potential for growth and impact throughout numerous sectors. Addressing risks and concerns associated to regulations, infrastructure, financing, skills, cybersecurity is important for realizing such strong potential. With help of supportive regulatory environment, deployments towards infrastructure and education and promotion of responsible practices, geospatial industry is capable to flourish and play critical role in India’s development journey.

Cybersecurity seems to be of paramount concern as entire geospatial industry is heavily dependent on digital data and cloud-based services. Another concern relates to financing and investment. Geospatial industry needs significant amount of investment in research, development, and infrastructure.

Shareholding pattern of Genesys International Corporation Ltd

Significant portion (~39.69%) is being held by promoters of Genesys International Corporation Ltd as Mrs. Saroja Malik, who is a Whole-time Director of the company, held ~9.93% at June 2023 end and Kadam Holding Ltd held ~8.82%.

Public shareholders make up ~53.98% of the company’s total shareholding pattern by June 2023 end, which exhibits a rise from ~53.80% as on March 2023. This is a positive sign as it means that public has shown increased interest in the company’s stock price because of which there has been an increase in shareholding.

Valuation and investment rationale

Stock of Genesys International Corporation Ltd currently trades at ~33.7x of FY23 EPS, which is at a discount to sectoral average of ~42.7x. Therefore, this exhibits that investors should consider going long on this stock as significant upside is expected in near future.

Overall capital structure of the company seems to be comfortable, with overall gearing remaining below unity in FY22 at ~0.38x (FY21: 0.15x). Adequate liquidity of the company is exhibited by INR 255.00 crores of funds which were raised during 1H23. It presently has cash and cash equivalent of INR66.25 crores as of November 8, 2022 available in form of FD and mutual funds. Recent fund raise by the company has added a liquidity cushion, and has provided ability to invest such funds in developing 3D content service segment and for enabling its data coverage capacity. Given its mid-term revenue visibility, expectations of strong profitability, and comfortable capital structure, the company should be able to tap growth opportunities.

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