HPL Electric

HPL Electric achieved its strongest financial performance in FY25, with revenue crossing ₹1,700 crore, marking a 16% year-on-year growth. EBITDA surged by nearly one-third to ₹255 crore, resulting in a 15% margin. Profit After Tax more than doubled to over ₹90 crore, with PAT margin exceeding 5%. The momentum continued into Q4 FY25, which saw record revenue of ₹493 crore and an EBITDA margin of 16.7%, leading to a PAT of ₹37 crore.

The company's order book stands at a robust ₹3,500 crore, entirely comprising AMISP-led smart meter projects, providing multi-year revenue visibility. Management expects to execute well over ₹1,000 crore from this order book in FY26. The national rollout of smart meters has accelerated, crossing 100,000 meters per day, and HPL is fully equipped to meet demand, with current capacity sufficient for the next three to four quarters.

HPL reported strong margin expansion, with smart metering EBITDA margin at 18% in Q4 and 17% for the full year, which management believes is sustainable. For the consumer and industrial segments, margins averaged 11.5% in FY25, with potential to reach 12%. This improvement is attributed to a stronger product mix, smarter sourcing, and initial benefits from plant automation, despite potential variability from commodity prices like copper.

Total CapEx for FY25 was slightly over ₹70 crore, primarily for smart metering capacity additions. For FY26, the company anticipates CapEx of around ₹100 crore, a mix of maintenance and growth investments across metering, switchgear, and wires & cables. Working capital efficiency has improved, with debtor days reducing from 150-160 to approximately 129. The recent credit rating upgrade from A-minus to A+ is expected to further reduce finance costs.

HPL successfully launched electric fans, initially in 10-12 international markets and now domestically. The company has already shipped over 100,000 units and plans to cover 75% of the domestic market by the end of the calendar year, aiming to be a pan-India player by next summer. This expansion leverages existing distribution partners and new channel partnerships, enhancing HPL's consumer portfolio.

The company is deepening factory automation to protect margins and ensure quality at scale, particularly in smart meter production, which is transitioning to automated lines. These investments are expected to deliver operational benefits and unlock further efficiencies. HPL is also accelerating product development to stay first-to-market across its key segments, including a new Wirepas-certified in-meter RF gateway for smart meters.

Within a typical AMISP contract, the smart meter hardware component accounts for approximately 30-40% of the total project cost, with the remainder allocated to system infrastructure and financing. While the market is expected to mature with new entrants and increasing scale, leading to some pricing pressure, HPL proactively builds this into its planning, focusing on efficiency and innovation to maintain profitability.