HPL Electric

HPL Electric reported a robust performance in its Consumer & Industrial (C&I) segment, which contributed 47% of the total revenue in H1 FY26. This segment demonstrated strong growth, with revenue increasing by 30% in Q2 FY26 and 23% in H1 FY26. The C&I segment's EBIT margin stood at approximately 11% in Q2 FY26. While the metering segment experienced temporary moderation, its EBIT margins improved to around 17.5% in Q2 FY26, indicating pricing discipline and procurement efficiency.

The company maintains a strong order book of over ₹3,300 crores, with smart meters constituting roughly 99% of this, providing multi-year execution visibility. Management anticipates a significant acceleration in smart meter deliveries from November to March FY26, with Q3 expected to surpass Q2, and Q4 projected for even stronger growth. Despite some execution slowdowns attributed to factors like rains and skilled manpower shortages, the overall industry-wide ramp-up is expected to be visible in the next 2-3 years, supported by clear government policy and funding.

The C&I business, which generated ₹384 crores in revenue in H1 FY26, is a key growth pillar. Wires and cables continued their strong trajectory with 24% growth in Q2, while lighting and electronics also saw a turnaround with low-20s% growth. The segment's revenue mix is approximately 40% switchgear, 40% wires/cables, and 20% lighting (including fans). HPL aims for strong double-digit growth in C&I, targeting a doubling of the business in the next three years and expecting 20-30% growth over the next two-three years.

For the full financial year 2026, HPL Electric projects a total topline in the range of ₹1,900-₹2,000 crores. C&I segment margins are expected to remain stable at 11-12% in the short term, with potential for improvement as volumes scale up. Consolidated margins are also anticipated to remain healthy, driven by ongoing efficiency improvements and a richer mix of smart meters.

The company has achieved an improvement in overall debtor days, which now stand at approximately 125 days (including GST), representing a 50-60 day improvement compared to March. Long-term borrowings increased by about ₹60 crores in H1 FY26, primarily to fund smart switchgear and metering production enhancements. Management expects inventories to decrease by ₹50-₹60 crores in Q3 and Q4 as sales pick up, and net cash flows post-capex will be utilized to reduce working capital borrowings.

HPL has successfully launched its fans division, initially focusing on exports to at least 14 countries and securing international approvals. For the Indian market, the company plans to commence sales in December 2025, with June-July 2026 marking the first full season of participation. By June-end FY26, HPL aims to achieve 70-80% market presence across the country for its new fan product range, supported by a stronger online strategy.