Gensol Engineering – A play on Energy Transition (Solar Energy & EV)

Thanks @Akash07 for wearing the hat of contributor.

Optically, I liked what Gensol is doing 1. EV manufacturing 2. EV Leasing (Arbitrage over fuel costs)

I found few concerns.

1. I checked with few folks in Industry on Solar EPC Margins. On ground folks told me that getting margins above 10% will be difficult unless they signed agreements few years back. Getting contracts is no problem. Quality of cashflow is one to look for.

2. Promoter pledge is at 41.75% (visible in stock edge app). Promoter has higher incentive to keep the stock in the positive. No knowns funds have taken positions. Usually that is a signal on someone doing homework on providers.

3. Major public individual investors holding 15% exited while the company is ramping up. Vakrangee had a similar trend.

4. Matrix Gas also had a sudden revenue spike in most recent year. Looked like a company trying to cash in on SME boom.

I don’t know if time in market has softened me and made me more cautious.

Discl: No holdings.