HPL - HPL Electric

📊 NSE: HPL 🏢 Electric Equipment 📅 Last Updated: 12/14/2025 7:48

💰 Financial Performance

Revenue Growth by Segment

The Consumer, Industrial & Services (C&I) segment grew 30.0% YoY in Q2 FY26 to ₹205 crore and 23.14% in H1 FY26 to ₹384 crore. The Metering, Systems & Services segment revenue was ₹229 crore in Q2 FY26, down from ₹264 crore YoY due to inspection and dispatch timings, though it grew 12% QoQ. Total FY25 revenue reached ₹1,700.24 crore, a 16.39% increase from ₹1,460.86 crore in FY24.

Geographic Revenue Split

Not disclosed in available documents, though the company is strategically expanding its export footprint to tap international markets.

Profitability Margins

Gross margin improved to 36.56% in Q2 FY26 (+177 bps YoY) and 37.25% in H1 FY26 (+202 bps YoY) due to better product mix and disciplined procurement. PAT margin stood at 5.15% in Q2 FY26, up 4 bps YoY, with PAT reaching ₹22.36 crore.

EBITDA Margin

EBITDA margin was 15.17% in Q2 FY26, an improvement of 83 bps YoY. Consolidated EBITDA for H1 FY26 was ₹123.90 crore, up 6.16% from ₹116.71 crore in H1 FY25, reflecting operational efficiency and higher-margin smart meter contributions.

Capital Expenditure

Not disclosed as a specific total INR figure, but the company reported 'strategic investments in capacity expansion and automation' and 'expanded assembly and component capacities' to support the smart meter rollout.

Credit Rating & Borrowing

Upgraded to 'CRISIL A/Stable/CRISIL A1' from 'CRISIL A-/Positive/CRISIL A2+'. The group has a fund-based working capital limit of ₹625 crore utilized at 89% on average. Interest coverage ratio is a key sensitivity factor, with an upward trigger if it exceeds 3 times.

⚙️ Operational Drivers

Raw Materials

Specific raw material names like copper or steel are not listed with percentages, but the company manages costs through 'disciplined procurement' for its Wires & Cables and Switchgear segments.

Capacity Expansion

HPL operates 7 manufacturing facilities in Haryana and Himachal Pradesh. It has recently added automated lines and expanded assembly/component capacities to handle the sequential step-up in smart meter dispatches expected between November and March.

Raw Material Costs

Cost of Goods Sold (COGS) for H1 FY26 was ₹513.00 crore, representing 62.75% of revenue, a decrease from 64.77% in H1 FY25, indicating improved procurement efficiency.

Manufacturing Efficiency

The company is transitioning to 'Industry-4.0 enabled manufacturing facilities' and automated lines to improve throughput and maintain margins despite aggressive bidding in PSU tenders.

📈 Strategic Growth

Expected Growth Rate

18-20%

Growth Strategy

HPL aims to double its C&I business in 3 years (targeting 20-30% annual growth) by investing 2% of C&I sales (₹7.7 crore in H1 FY26) into brand building and advertising. It leverages a ₹3,300+ crore order book, 99% of which is smart meters, to capitalize on the government-led AMISP smart metering transformation.

Products & Services

Smart meters, LED lighting, Switchgear (MCB, ACCL, RCBO), Wires, Cables, Solar products, and Surge Protection Devices.

Brand Portfolio

HPL

New Products/Services

Smart Switchgears, Smart meters, and Eco-friendly products/packaging are identified as key new technology focus areas.

Market Expansion

Expanding distribution reach and channel expansion for the C&I segment; scaling export footprint to new international markets.

Market Share & Ranking

Management states growth in most segments is 'above reported industry growth' and they have 'headroom for growth' as current market share is not yet high.

🌍 External Factors

Industry Trends

The industry is shifting toward smart metering (AMISP-led) and smart electrical products. HPL is positioning itself by tilting its mix toward higher-margin smart meters and expanding its C&I brand presence to 47% of total revenue.

Competitive Landscape

Intense competition in the PSU/Utility segment requires aggressive bidding, which pressures margins. Competitors are not named but described as 'entities in this segment' facing similar pressures.

Competitive Moat

HPL's moat is built on its robust R&D and technology-led manufacturing for smart meters, creating high entry barriers in the utility segment. This is sustained by a ₹3,300 crore order book providing long-term revenue visibility.

Macro Economic Sensitivity

The company is sensitive to India's GDP growth (6.5% in FY25) and structural tailwinds from electrification, urbanization, and digitization.

Consumer Behavior

Increasing demand for 'Smart' products (meters/switchgear) and brand-conscious purchasing in the C&I segment.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily influenced by the government's AMISP-driven smart metering transformation and Section 134(3)(m) of the Companies Act regarding energy conservation.

Environmental Compliance

The company is adopting 'Eco friendly products and packing' and 'Green and sustainable initiatives' as part of its multidirectional steps toward emerging trends.