HPL Electric

HPL Electric reported a robust Q3 FY26, with revenue growing by approximately 21% year-on-year to ₹475 crores. EBITDA saw an even stronger increase of about 29% to nearly ₹72 crores, indicating improved profitability. This performance was driven by a strong B2B order pipeline and scaling of branded consumer and industrial businesses, strengthening the company's earnings profile quarter after quarter.

Smart metering continues to be a long-term growth driver for HPL, backed by an order book exceeding ₹3,000 crores, which provides clear multi-year visibility. In Q3, execution picked up meaningfully, with deliveries increasing by around 25% sequentially and 11% year-on-year. Management anticipates the industry will implement at least 5 crore smart meters over the next 2-3 years, and HPL is confident in its supply capabilities to meet this demand.

The Consumer and Industrial (C&I) business is steadily becoming a second core growth pillar. In Q3, Switchgear grew over 33% year-on-year to roughly ₹68 crores, while Wire and Cables recorded strong growth of nearly 60% year-on-year. Lighting and Electronics also returned to growth at around 20%. Management projects the C&I segment to cross ₹1,000 crores in revenue next year (FY27) and expects it to more than double over the next 3 to 4 years.

HPL has strategically launched NRAM plus smart water meters, expanding its metering platform into water infrastructure, which is identified as a 'huge segment.' While revenue contribution is expected to start in the second half of next year after trials and approvals, global opportunities are also being explored. The company is actively pursuing international certifications and aims to penetrate global markets, particularly in Europe and the Middle East, leveraging India's quality advantage and FTA benefits.

The company has significantly strengthened its distribution network, now operating with over 900 authorized dealers and more than 85,000 retailers. HPL has increased its digital marketing spend by 2-3x and plans to launch 2-3 new apps in the coming months. These apps will digitally connect dealers, retailers, and electricians, aiming to improve reach, conversions, and build repeat demand across markets.

Management acknowledged the pressure on gross margins due to volatility in raw material prices, particularly copper, which impacts the C&I business, especially wire/cable and switchgear. However, they clarified that price increases are typically passed on to consumers with a lag of 2-3 weeks for wire/cable and 3-6 months for switchgear, indicating a mechanism to mitigate long-term margin erosion.

HPL Electric expressed high confidence in achieving a 25% topline growth for FY27 from FY26. Management stated this target is considered a 'minimum required' during internal budget finalization, reflecting their strong conviction in the sustained momentum across both the smart metering and consumer & industrial segments, despite potential business challenges.