HPL Electric & Power Limited, a leading player in the electrical equipment and smart meter industry, has announced a significant new order worth ₹65.72 crores for the supply of smart meters. This development marks a notable achievement for the company in its core business segment.

Order Details

The company has received a Work Order/Notification of Award from its regular leading customers for the supply of smart meters. The order, valued at ₹65.72 crores (inclusive of tax), is part of HPL Electric & Power's normal course of business operations.

Strategic Importance

This order underscores HPL Electric & Power's strong position in the smart meter segment and its ability to secure substantial contracts from its existing customer base. The company's continued success in attracting orders from regular clients speaks to the quality of its products and the trust it has built in the market.

Execution and Terms

The smart meter supply order will be executed according to the terms and conditions specified in the Purchase Order/Notification of Award (NOA). While specific timelines for delivery have not been disclosed, the company is expected to fulfill the order as per the agreed-upon schedule.

Market Implications

This new order is likely to have a positive impact on HPL Electric & Power's revenue stream and further solidify its market position in the smart meter industry. As India continues to modernize its power infrastructure, the demand for smart meters is expected to remain strong.

Disclosure and Compliance

In compliance with regulatory requirements, HPL Electric & Power Limited has duly informed the National Stock Exchange of India Ltd. and BSE Limited about this significant order. The disclosure was made through an official intimation signed by Vivek Kumar, the Company Secretary of HPL Electric & Power Limited.

This latest order reaffirms HPL Electric & Power's strong foothold in the smart meter market and its ability to capitalize on the growing demand for advanced metering infrastructure in India.

HPL Electric & Power Limited , a leading player in the electrical equipment sector, has reported mixed results for the first quarter, with challenges in its smart meter business offset by strong performance in its consumer segment.

Revenue Decline Amid Smart Meter Delays

The company experienced a 2.50% year-on-year decline in consolidated revenues for Q1. This decrease was primarily attributed to delays in smart meter dispatches, which were affected by monsoon disruptions and slower execution by Advanced Metering Infrastructure Service Providers (AMISPs). Despite these setbacks, the company maintains a robust smart meter order book of over ₹3,000.00 crore, indicating strong future potential in this segment.

Consumer & Industrial Segment Shines

In contrast to the challenges faced in the metering business, HPL Electric's Consumer & Industrial segment demonstrated impressive growth:

• Overall segment revenue increased by 16.00% year-on-year
• EBIT (Earnings Before Interest and Taxes) grew by 23.00%
• Segment margins crossed the 11.00% mark
• Wires and cables sub-segment saw a remarkable 35.00% growth

This strong performance in the Consumer & Industrial segment helped to partially offset the revenue decline in the metering business.

Profitability Improvements

Despite the revenue challenges, HPL Electric reported improvements in profitability metrics:

• Gross margins expanded by 230 basis points
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin improved by 85 basis points
• PAT (Profit After Tax) increased by 8.50% to ₹18.50 crore

These improvements reflect the company's focus on higher-margin products and realization of scale benefits.

Future Outlook

HPL Electric remains optimistic about its future prospects:

1. The company expects sequential improvement in Q2, with stronger momentum anticipated in the second half of the fiscal year.
2. Management reported good performance in July, indicating a potential turnaround in the smart meter business.
3. For the Consumer & Industrial segment, HPL Electric has set an ambitious target of crossing ₹1,000.00 crore in revenue by FY28.
4. The company aims to expand its retail network to 100,000 retailers by FY26, up from the current 85,000.

Working Capital Improvements

HPL Electric has made significant strides in improving its working capital position:

• Debtor days reduced by 28 days over the past 12 months
• Net working capital decreased by ₹60.00 crore despite sales growth

These improvements are expected to enhance cash flows and overall financial efficiency.

Conclusion

While HPL Electric faced headwinds in its smart meter business during Q1, the strong performance of its Consumer & Industrial segment and overall profitability improvements demonstrate the company's resilience. With a substantial order book in smart meters and ambitious growth plans for its consumer business, HPL Electric appears well-positioned for future growth, provided it can navigate the near-term challenges in smart meter execution.

Investors and stakeholders will be keenly watching the company's performance in the coming quarters, particularly for signs of recovery in the smart meter segment and continued momentum in the Consumer & Industrial business.