HPL Electric & Power Limited — Q4 FY25 earnings call

Call held 23 May 2025

Management summary

HPL Electric & Power Limited reported its strongest year in FY25, with revenue crossing ₹1,700 crore and PAT more than doubling. The momentum continued into Q4, achieving record highs for both revenue and EBITDA margin. The company's ₹3,500 crore smart meter order book provides multi-year visibility, and management is optimistic about sustained growth, driven by scaling smart meter production, factory automation, and product development across its segments.

Highlights

  • FY25 Revenue crossed ₹1,700 crore, up 16% year-on-year.

  • FY25 EBITDA grew by nearly one-third to ₹255 crore, with margin at 15%.

  • FY25 Profit After Tax (PAT) more than doubled to over ₹90 crore, with PAT margin crossing 5%.

  • Q4 FY25 Revenue stood at ₹493 crore, a record high for the Company.

  • Q4 FY25 EBITDA margin reached 16.7%, also a record high.

  • Q4 FY25 PAT rose to ₹37 crore, reflecting continued operating leverage.

  • Order book stands at ₹3,500 crore, entirely comprising AMISP-led smart meter projects.

  • Smart metering EBITDA margin was around 18% in Q4 FY25 and 17% for the full year FY25.

Key financials

2 periods

Q4 FY25

  • Revenue
    ₹493 Cr
  • EBITDA Margin
    16.7%
  • PAT
    ₹37 Cr

FY25

  • Revenue
    ₹1,700 Cr
    YoY +16%
  • EBITDA
    ₹255 Cr
    YoY +33.3%
  • EBITDA Margin
    15%
  • PAT
    ₹90 Cr
    YoY +100%
  • PAT Margin
    5%

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

  • Smart Metering
    18% Q4 FY25 EBITDA Margin17% FY25 EBITDA Margin18.7% Q4 FY25 EBIT Margin17% FY25 EBIT Margin
  • Wires and Cables
    24% FY25 Growth
  • Domestic Switchgear
    16% FY25 Growth
  • Lighting
    30% Q4 FY25 Sales Growth6.6% FY25 Growth
  • Consumer and Industrial Segment
    ₹625 Cr FY25 Revenue11.5% FY25 Average Margin

Guidance & targets

Revenue

  • FY26 Revenue from Smart Meters Revenue · FY26 · High confidence ₹1,500 crore
    So yes, if demand reaches 1,500 crore for smart meters in FY26, we can certainly fulfil it.

    — Gautam Seth, Joint Managing Director & CFO

  • FY26 Revenue from Consumer and Industrial Segments Revenue · FY26 · Medium confidence ₹700-750 crore
    In terms of our consumer and industrial segments, we did ₹625 crore last year. Scaling that to ₹700-750 crore is quite achievable.

    — Gautam Seth, Joint Managing Director & CFO

  • FY26 Overall Revenue Revenue · FY26 · Medium confidence ₹2,200 crore range
    So yes, hitting those revenue levels is well within reach.

    — Gautam Seth, Joint Managing Director & CFO

  • FY26 Smart Meter Order Book Execution Revenue · FY26 · High confidence over ₹1,000 crore
    That said, we expect well over ₹1,000 crore worth of orders to be executed in FY26.

    — Mr. Gautam Seth, Joint Managing Director & CFO

  • FY26 Double-Digit Growth Revenue · FY26 · Medium confidence strong double-digit growth
    Based on current visibility, we are optimistic about achieving another strong year of growth. Last year we delivered revenues of ₹1,075 crore, and we're targeting strong double-digit growth again in FY26.

    — Mr. Gautam Seth, Joint Managing Director & CFO

  • Average Quarterly Run-Rate Revenue · next four quarters · Medium confidence ₹500 crore
    Broadly speaking, we believe an average quarterly run-rate of ₹500 crore is achievable over the next four quarters.

    — Gautam Seth, Joint Managing Director & CFO

Capex

  • FY26 Total CapEx Capex · FY26 · High confidence around ₹100 crore
    To summarise, we expect CapEx of around 100 crore in FY26. This will be a mix of maintenance and growth investments.

    — Gautam Seth, Joint Managing Director & CFO

Margin

  • Smart Metering EBITDA Margin Margin · near term · High confidence 17-18%
    For metering, we expect to stay in the 17–18 percent EBITDA margin range in the near term.

    — Gautam Seth, Joint Managing Director & CFO

  • Consumer and Industrial Margins Margin · near term · Medium confidence 11.5-12%
    As guidance, we would expect consumer and industrial margins to remain around 11.5 percent, with the potential to improve slightly toward 12 percent.

    — Gautam Seth, Joint Managing Director & CFO

Working Capital

  • Working Capital Borrowings Working Capital · FY26 · High confidence no material increase
    Looking ahead to FY26, we do not anticipate a material increase in working capital borrowings even with higher revenue.

    — Gautam Seth, Joint Managing Director & CFO

Capacity

  • Smart Meter Production Capacity Capacity · next three to four quarters · High confidence sufficient capacity
    At present, we have sufficient capacity to meet projected demand over the next three to four quarters.

    — Gautam Seth, Joint Managing Director & CFO

Market Expansion

  • Fan Business Domestic Market Coverage Market Expansion · end of this calendar year · High confidence 75%
    By the end of this calendar year, we expect to have covered approximately 75 percent of the Indian market.

    — Gautam Seth, Joint Managing Director & CFO

  • Fan Business Pan-India Player Market Expansion · next summer season · High confidence pan-India player
    By the next summer season, we aim to be a pan-India player.

    — Gautam Seth, Joint Managing Director & CFO

Risks & concerns

  • Raw material price volatility (copper)

    medium

    Q4 margins for wires and cables were strong due to favorable commodity cycle, but copper prices can fluctuate, leading to variability.

    Management acknowledged

  • Pricing pressure in smart metering

    medium

    As volumes scale and new players enter, pricing pressure is expected, similar to the switchgear business's evolution.

    Management acknowledged

  • Project execution delays (externalities)

    medium

    External factors like site readiness, approvals, dispatch clearances, and weather conditions (monsoons) can influence the pace of execution.

    Management acknowledged

Areas of evasion (2)

  • exact number of semi-automated/fully automated lines for smart meters
  • unit-wise monthly meter sales figures

Q&A highlights

3 direct
Smart Meter Order Book Execution Pace Direct
That said, we expect well over ₹1,000 crore worth of orders to be executed in FY26.

Analyst pressed for specific FY26 execution targets from the large order book, which is crucial for revenue visibility.

Asked by Viraj Mahadevia

Sustainability of High Margins Direct
For the full year, smart metering margins were around 17 percent, and we're comfortable guiding for that level to continue. ... As guidance, we would expect consumer and industrial margins to remain around 11.5 percent, with the potential to improve slightly toward 12 percent.

Analyst questioned if the record Q4 margins were sustainable, and management provided specific, albeit slightly lower, guidance for future margins across segments.

Asked by Sahil Patani

Working Capital and Credit Terms for Smart Meters Direct
As for our smart meter contracts under the AMISP framework, current payment terms are around 90 to 120 days. However, the private sector entities we work with tend to adhere firmly to payment schedules, which supports healthy cash flows and strengthens our working capital position.

Analyst inquired about the impact of credit rating upgrades on interest costs and working capital intensity, especially with the long-cycle smart meter projects and discom counterparties.

Asked by Chandresh Malpani

2 min read 7 chapters

Detailed narrative

Record Financial Performance in FY25 and Q4

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.

Robust Smart Metering Order Book and Execution Outlook

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.

Sustainable Margin Expansion Across Segments

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.

Strategic CapEx and Working Capital Management

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.

Expansion into Electric Fans and Distribution Network

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.

Automation and Product Development Focus

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.

Smart Meter Ecosystem and Pricing Dynamics

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.

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