Smart Metering – Execution remains the key
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.
Notable improvements due to smart grid technology
With advancement of smart grid technology and implementation of smart meters, India’s AT&C losses for power distribution companies (discoms) have been consistently decreasing, from 22.3% in FY21 to 17.6% in FY24; this has been primarily driven by improvement in collection efficiency. Among states, Bihar and Assam lead the implementation, with the highest number of smart meters. We note that Bihar witnessed significant reduction in AT&C losses, from 19.94% in FY24 to 15.5% in FY25. Assam too saw significant decrease in AT&C losses to 15.74% in FY24 compared with 16.22% in FY23 and 23.39% in FY20.
Awarding to see meaningful pickup in FY26
The RDSS scheme was announced in Jun-21, with target to install 250mn smart meters by CY26. Cumulatively, sanctioned/awarded/implementation has been mixed, with 222mn/138mn/25mn (13.4mn in FY25) meters at end-FY25. After pick-up in initial years of the scheme, awarding has been muted, esp in FY25, with only a few orders awarded in Q1. The elections impacted the tendering/awarding activity in 1H; the effect persisted in 2HFY25 too. We expect meaningful pickup in FY26, led by a healthy pipeline ahead.
Implementation demands acceleration; extension likely
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.
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