HPL Electric & Power Ltd

- In H1 FY26, HPL has undertaken some capex financed through long-term borrowings, which increased by about ₹60 crore. - The focus is on selective capex, primarily for smart switchgear and enhanced metering production. - Most of the medium-term capex, especially on the metering front, has been completed. - From FY27 onwards, the company expects mainly maintenance capex, indicating no large new capex plans. - Any additional cash flows will primarily be used to reduce working capital borrowings and deleverage the balance sheet. - There is no specific mention of new fundraising through equity or additional debt planned in the near future. - The company's priority remains disciplined capital deployment and maintaining a healthy balance sheet.

- Capex has been incurred in the first half of the year, primarily for smart switchgear development and selective enhancement of metering production. - Medium-term capacities, especially for metering, are mostly set, with major capex largely completed. - From FY27 onwards, capex is expected to be mainly for maintenance rather than expansion. - The company plans to continue selective investments in brand, products, and capabilities to sustain growth. - Investment in the HPL brand is ongoing, with about 2% of C&I sales spent on advertising and promotion in H1 FY26, with plans to increase this in H2 FY26. - No current plans for entering new product categories like manufacturing solar panels, though the company is studying potential complementarities for future consideration.

- Strong double-digit growth expected in Consumer & Industrial (C&I) segment, with wires and cables growing ~25–30% recently. - Aim to double the C&I business over the next 2–3 years, supported by channel expansion and brand investments. - Smart metering segment has a strong medium- to long-term growth story with confirmed order books and healthy inquiry pipelines. - Industry-wide smart meter execution expected to accelerate over the next 2–3 years, with potential to reach 20+ crore meters installed by 2028. - H2 FY26 projected to be stronger than H1, with Q3 improving over Q2 and Q4 being execution-heavy for smart meters. - Both metering and C&I segments expected to contribute equally to growth over the next 3–5 years. - Growth backed by ongoing investments in R&D, brand building, and manufacturing capacities. - Overall revenue likely to reach close to ₹2,000 crore in FY26, driven by ramp-up in smart metering and C&I sales.

- Consumer & Industrial (C&I) segment aims to double in the next 3 years with strong double-digit growth, supported by wires, cables, switchgear, lighting, and fan products. - Smart metering business expected to see significant growth in H2 FY26 and beyond, with order book of over ₹3,300 crore largely comprising smart meters and multi-year visibility. - EBIT margins in metering improved to ~17.5%; sustaining or improving margins depends on volume, product mix, and procurement efficiency. - C&I margins currently around 11–12% with potential improvement as volumes rise, driven by premiumisation and new product launches. - Operating cash flows expected to improve in H2 with reduced inventory and better receivable days; excess cash flows likely used for debt reduction. - Overall, HPL expects sustainable and profitable growth, driven by structural tailwinds in electrification, urbanisation, and digitisation over the medium to long term.

- Current unexecuted order book for smart meters is around ₹3,300 crore. (Page 23) - Order book is well spread across AMISPs, with no single state contributing a material majority. (Page 15) - Orders are generally structured over 2.5–3 years, with many deliveries scheduled for FY27 and FY28. (Page 24) - Confirmed schedules received from AMISPs indicate strong order flow, although some deliveries experienced short-term postponements. (Pages 17, 26) - Additional incremental orders are coming in beyond the current ₹3,300 crore order book, although some are not publicly disclosed due to business reasons. (Page 6) - On Consumer & Industrial segment, revenue was ₹384 crore in H1 FY26 with optimistic growth projections and expansion in capacity to meet demand. (Page 19) - Overall, the order pipeline and bidding pipeline remain strong across smart metering and C&I segments. (Pages 6, 23)