Any current/future new fundraising through debt or equity?

No immediate plans for additional debt repayment; current short-term borrowings remain as is. Growth in smart meter orders may cause short-term borrowings to increase temporarily to manage working capital, especially before the supply cycle kicks in, likely leveling out by Q4. No additional funds required for general growth or capex; expansion and improvements will be funded through internal resources. The company successfully grew revenue by 25% last year with zero additional borrowings; expects continued growth without additional borrowing in regular businesses. Focus remains on supp

Any current/future capex/capital investment/strategic investment?

No immediate major capex is planned across product divisions, including metering, switchgear, wire & cable (Page 16). Capacity utilization is increasing but there is significant upside potential without major capital expenditure (Page 16). Some capacity expansion may happen flexibly without much capex after two years (Page 16). Improvements through automation and better resource utilization are ongoing to enhance productivity with existing assets and manpower (Page 16). No additional funds are required for general growth and capex; growth will be managed through internal resources (Page 8). Sh

Future growth expectations in sales/revenue/volumes?

Metering segment expected to grow significantly, with revenue potentially rising from INR 850 crores to INR 1,100-1,200 crores in next two years. Overall sales could reach INR 1,800-2,000 crores across all product areas without major capex. Smart meters to dominate metering revenue by 2026, possibly contributing nearly 100% of the metering segment. Metering expected to contribute around 55%-60% of overall company revenue in next 2-3 years. Consumer & Industrial segment to grow steadily with double-digit growth despite lighting price erosion. Wire & Cable and Switchgear segments also projected

Future growth expectations in earnings/operating earnings/profits/EPS?

HPL anticipates a significant growth in revenue, particularly in the metering segment, expecting a 40% jump in metering revenue to about INR 850 crores in FY24 from INR 600 crores last year. The Consumer & Industrial segment is expected to exhibit steady double-digit growth despite pricing pressures in some areas like Lighting. Operating margins are stable due to cost reductions despite value erosion in certain segments. The company aims to improve ROCE to double digits by the end of the current year, targeting around 15% over the next three years. Smart meters are projected to dominate future

Current/ Expected Orderbook/ Pending Orders?

As of July 4, 2023, the current order book stands at approximately INR 2,100 crores. About 82% of the order book is for meters, with over 75% of those being smart meters. Recent orders include a INR 417 crores order from West Bengal State Electricity Board under the AMISP scheme, already included in the order book. The order book is expected to double in the near future given ongoing large order inflows. Smart meter orders generally have a supply timeline of around 2 to 2.5 years. Revenues from new AMISP orders usually begin 6 to 9 months after the order is received due to preparator

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HPL Electric & Power LtdQ2 FY23Industrial Manufacturing

HPL Electric & Power Ltd Q2 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹380P/E: 22.1Market Cap: ₹2.2K CrSector: Industrial Manufacturing

Management growth scorecard

Revenue

Category 1

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 1

→Metering segment expected to grow significantly, with revenue potentially rising from INR 850 crores to INR 1,100-1,200 crores in next two years.
→Overall sales could reach INR 1,800-2,000 crores across all product areas without major capex.
→Smart meters to dominate metering revenue by 2026, possibly contributing nearly 100% of the metering segment.
→Metering expected to contribute around 55%-60% of overall company revenue in next 2-3 years.
→Consumer & Industrial segment to grow steadily with double-digit growth despite lighting price erosion.
→Wire & Cable and Switchgear segments also projected to grow driven by infrastructure spending and market demand.
→Revenue growth of about 40% targeted in the metering segment for the current year.
→Order book currently stands around INR 2,100 crores, mostly smart meter orders, with execution expected over 2-2.5 years.

Margin guidance

Category 3

→HPL anticipates a significant growth in revenue, particularly in the metering segment, expecting a 40% jump in metering revenue to about INR 850 crores in FY24 from INR 600 crores last year.
→The Consumer & Industrial segment is expected to exhibit steady double-digit growth despite pricing pressures in some areas like Lighting.
→Operating margins are stable due to cost reductions despite value erosion in certain segments.
→The company aims to improve ROCE to double digits by the end of the current year, targeting around 15% over the next three years.
→Smart meters are projected to dominate future revenues, potentially contributing around 60% of total revenue within 2-3 years.
→Expansion in existing capacity and automation is expected to enhance productivity without requiring significant capex in the immediate 1–2 years.
→Overall, HPL foresees a positive earnings trajectory supported by increased order book and market demand.

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Fundraise plans

→No immediate plans for additional debt repayment; current short-term borrowings remain as is.
→Growth in smart meter orders may cause short-term borrowings to increase temporarily to manage working capital, especially before the supply cycle kicks in, likely leveling out by Q4.
→No additional funds required for general growth or capex; expansion and improvements will be funded through internal resources.
→The company successfully grew revenue by 25% last year with zero additional borrowings; expects continued growth without additional borrowing in regular businesses.
→Focus remains on supplying smart meters mostly against bank LCs, improving working capital cycle as smart meter share increases.
→No mention of any equity fundraising in the provided text.

Order book

Yes

→As of July 4, 2023, the current order book stands at approximately INR 2,100 crores.
→About 82% of the order book is for meters, with over 75% of those being smart meters.
→Recent orders include a INR 417 crores order from West Bengal State Electricity Board under the AMISP scheme, already included in the order book.
→The order book is expected to double in the near future given ongoing large order inflows.
→Smart meter orders generally have a supply timeline of around 2 to 2.5 years.
→Revenues from new AMISP orders usually begin 6 to 9 months after the order is received due to preparatory activities.
→Overall, strong growth in orders is anticipated for FY '24 and beyond, driven largely by smart meter rollouts under the RDSS scheme and other grid modernization programs.

Capex plans

→No immediate major capex is planned across product divisions, including metering, switchgear, wire & cable (Page 16).
→Capacity utilization is increasing but there is significant upside potential without major capital expenditure (Page 16).
→Some capacity expansion may happen flexibly without much capex after two years (Page 16).
→Improvements through automation and better resource utilization are ongoing to enhance productivity with existing assets and manpower (Page 16).
→No additional funds are required for general growth and capex; growth will be managed through internal resources (Page 8).
→Short-term borrowings might increase temporarily due to smart meter order preparation but expected to level out by Q4 as the working capital cycle stabilizes (Page 8).

How does HPL Electric & Power Ltd rank vs peers in Industrial Manufacturing?

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