HPL Electric & Power Limited — Q2 FY26 earnings call

Call held 18 Nov 2025

Management summary

HPL Electric reported strong growth in its Consumer & Industrial (C&I) segment for Q2 and H1 FY26, contributing significantly to overall revenue. The metering segment showed improved EBIT margins and a robust order book, with management anticipating a pick-up in execution in H2 FY26. The company provided a full-year revenue guidance of ₹1,900-₹2,000 crores and outlined plans for C&I business expansion and new product launches like fans.

Highlights

  • Consumer & Industrial (C&I) segment contributed 47% of total revenue in H1 FY26.

  • C&I segment revenue grew 30% in Q2 FY26 and 23% in H1 FY26.

  • Metering segment EBIT margins improved to 17.5% in Q2 FY26.

  • Company holds an order book of over ₹3,300 crores, with 99% in smart meters.

  • Wires and cables within C&I grew 24% in Q2 FY26.

  • Lighting and electronics within C&I grew in the low-20s % in Q2 FY26.

  • HPL expects to achieve a total topline of ₹1,900-₹2,000 crores for FY26.

  • Overall debtor days improved by 50-60 days compared to March, now around 125 days (including GST).

Key financials

  1. C&I Revenue ₹384 Cr
  2. C&I Revenue Growth 30%
  3. C&I Revenue Growth H1 23%
  4. C&I Contribution to Total Revenue 47%
  5. Metering Segment EBIT Margin 17.5%
  6. C&I Segment EBIT Margin 11%
  7. Order Book ₹3,300 Cr
  8. Debtor Days 125 days

What they filed

Q1 FY27: revenue up 34.5%, net profit up 5.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue422 392 493 383 434 +3%474 +21%520 +5%515 +34%
EBITDA61 56 82 58 66 +8%72 +29%86 +5%63 +9%
Net profit22 18 37 18 22 +0%20 +11%31 −16%19 +6%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • C&I Segment Revenue Mix
    40% Switchgear40% Wires & Cables20% Lighting (incl. Fans)

Guidance & targets

Revenue

  • Total Topline Revenue · FY26 · Medium confidence ₹1,900-₹2,000 crores
    Whether it's ₹1,900 crore or ₹2, 000 crore, we should be looking at somewhere in that zip code.

    — Mr. Gautam Seth, Jt. MD & CFO

Revenue Mix

  • C&I Contribution to Total Revenue Revenue Mix · H2 FY26 · Medium confidence 45–50%
    But I think anywhere between 45–50% is where C&I should be.

    — Mr. Gautam Seth, Jt. MD & CFO

Growth

  • C&I Business Growth Growth · next three years · Medium confidence double
    the ideal would be to double our C&I business. That is how we are looking at it.

    — Mr. Gautam Seth, Jt. MD & CFO

  • C&I Segment Growth Growth · next two-three years · Medium confidence 20–30%
    So you think this kind of growth, 23% in the first half and 30% in Q2, around 20–30% is achievable for the next two-three years in this segment? Yes, I think so.

    — Mr. Gautam Seth, Jt. MD & CFO

Margin

  • C&I Segment EBIT Margin Margin · immediately (short-term) · Medium confidence 11–12%
    Immediately, I'd say around 11–12% on the consumer side.

    — Mr. Gautam Seth, Jt. MD & CFO

Inventory

  • Inventory Reduction Inventory · Q3 and Q4 · High confidence ₹50–60 crore
    Inventories in Q3 and Q4 should come down by about ₹50–60 crore as those sales happen.

    — Mr. Gautam Seth, Jt. MD & CFO

Market Share

  • Fans Market Presence Market Share · by June-end FY26 · Medium confidence 70–80%
    By June-end, we expect to be present in about 70–80% of the market across the country and for decent numbers to start coming through.

    — Mr. Gautam Seth, Jt. MD & CFO

Risks & concerns

  • Smart Meter Execution Delays

    medium

    Delays due to rains, AMISP-level issues, and lack of requisite skilled manpower for installation have slowed execution, though management expects a pick-up.

    Management acknowledged

  • Raw Material Price Volatility

    medium

    Volatility in copper prices and geopolitical situations affecting metals (e.g., in September-October) can impact C&I margins, though recent months have seen some stabilization.

    Management acknowledged

  • Geopolitical Events Impact on Components

    medium

    Exchange rates or electronic components could be affected by geopolitical events, though the last 2-3 months have been fairly stable.

    Management acknowledged

  • Consumer Complaints on Smart Meters

    low

    Reports of high bills and meters catching fire were raised, but management views these as localized issues being addressed through awareness programs, similar to past technology changes.

    Analyst downplayed

Areas of evasion (1)

  • Specific financial details of the Havells settlement

Q&A highlights

2 direct, 1 evasive
Havells Settlement Consideration Evasive
Right now, I cannot give out those specific details, but it will definitely be known in due course. Largely, the dispute was with the promoter entities, where the change of name would come in.

Analyst sought clarity on the financial impact of the Havells settlement on the listed entity, but management cited confidentiality, indicating a lack of immediate transparency on a potentially material event.

Asked by Viraj Mahadevia

FY26 Topline Target Direct
Whether it's ₹1,900 crore or ₹2, 000 crore, we should be looking at somewhere in that zip code.

Analyst probed for a specific full-year revenue target, and management provided a clear, albeit narrow, range, offering concrete guidance for investors.

Asked by Viraj Mahadevia

Smart Meter Execution Pace and Timeline Extension Direct
Yes, for sure the pace of execution will pick up. Many of these orders have delivery schedules of 2.5-3 years, plus a 3–6 month ramp-up period. Many projects are reaching the stage where they really need to push numbers; a lot of preliminary groundwork has been done.

Analyst questioned the industry's ability to meet smart meter targets given past pace and timeline extensions, prompting management to reaffirm confidence in an accelerating execution pace for H2 FY26 and beyond.

Asked by Pranjal Mukhija

2 min read 6 chapters

Detailed narrative

Q2 & H1 FY26 Performance Overview

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.

Smart Metering Segment Outlook and Execution

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.

Consumer & Industrial (C&I) Segment Growth Strategy

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.

FY26 Revenue and Margin Guidance

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.

Working Capital and Capex Management

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.

Fans Business Launch and Market Entry

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.

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