HPL Electric & Power Ltd

- HPL Electric & Power Limited plans to fund upcoming CapEx mainly through internal accruals and some long-term debt. - There is no mention of any planned equity dilution or fundraising through equity. - Incremental debt, if any, will primarily be for CapEx purposes. - The company has no expectations of a material increase in working capital borrowings in FY26 despite higher revenues. - Credit rating upgrades have helped renegotiate borrowing rates, potentially lowering finance costs. - The firm is actively working to improve its credit rating further, which could aid in reducing borrowing costs going forward.

- FY25 CapEx was slightly over ₹70 crore, higher due to capacity additions for smart metering. - Planned CapEx for FY26 is around ₹100 crore, including maintenance and growth investments. - Growth CapEx will focus on smart metering (mainly automation), switchgear (industrial and domestic), and wires and cables. - Maintenance CapEx will support tool-and-die infrastructure across product lines. - Current smart meter manufacturing capacity is modular and scalable with a 3-4 month lead time for expansion, sufficient for the next 3-4 quarters. - Additional CapEx planned to deepen factory automation to protect margins and ensure quality at scale. - Future category expansions planned within wires and cables, details to be provided as initiatives finalise. - CapEx primarily funded through internal accruals and some long-term debt; no equity dilution anticipated.

- Smart meter sales have nearly doubled over the last two years, driven by the smart meter portfolio and semi-automated lines, and the company is well-positioned to double sales again in the next 2-3 years through fully automated infrastructure (Page 20). - FY25 recorded highest quarterly revenue at ₹493 crore with strong growth; FY26 expected to maintain strong double-digit growth in revenues, targeting over ₹1,000 crore execution from current order book (Pages 4 & 19). - Average quarterly revenue run-rate of around ₹500 crore from smart meters achievable over next four quarters, with broad-based state-wise deployment and ongoing order inflows (Page 13). - Expansion into new product categories like fans, expecting meaningful growth and pan-India presence by next summer (Pages 12 & 14). - CapEx planned at around ₹100 crore in FY26 focused on automation and growth in metering, switchgear, and wires & cables segments to support volume scaling (Page 6).

- HPL anticipates continued strong revenue momentum, with an average quarterly run-rate of ₹500 crore achievable over the next four quarters, driven by smart meter rollouts and other segments. - EBITDA margins, especially in the smart metering segment, are expected to remain stable around 17–18%, with potential minor upside. - Operating leverage from higher volumes and increasing automation is expected to support margin stability and improvement through FY26. - Profit after tax margins are expected to sustain or improve slightly, backed by scale, process efficiencies, and innovation. - EPS growth is supported by operational scale-up, better cost control, and ongoing automation investments. - The company’s strategy includes rapid scaling in smart meters, expansion in wires and cables, switchgear, lighting, and new products like fans, further driving profits. - CapEx of around ₹100 crore in FY26 will focus on automation and growth, funded mainly through internal accruals and some debt, supporting sustained earnings expansion.

- HPL currently holds a smart meter order book of approximately ₹3,500 crore, primarily comprising AMISP-led smart meter projects. - Execution schedules vary across different AMI SP programs, with staggered rollouts over about 1.5 years per order after an initial lag phase. - Over ₹1,000 crore worth of orders are expected to be executed in FY26. - Orders are released in tranches based on delivery timelines, integration success, and execution performance. - The company anticipates continued momentum in smart meter order inflows, expecting to onboard 2-3 additional AMISPs soon. - A significant portion of future orders will be repeat orders, reflecting long-term customer relationships. - Market rollout momentum continues strongly, with a recent national deployment crossing 100,000 meters per day, indicating robust demand and execution progress.