HPL Electric C&I growth and smart-meter order book support revenue visibility

Investment View and Valuation

ICICI Securities’ August 11, 2026 result update on HPL Electric & Power maintains a BUY recommendation with a target price of Rs 380, compared with the CMP of Rs 325. The target is based on 20 times FY28E EPS.

The report highlights diversification-led growth in Consumer & Industrials (C&I), alongside medium-term revenue visibility from smart metering. HPL operates through Metering & Systems and C&I, with seven manufacturing facilities—five in Haryana and two in Himachal Pradesh—along with two research and development centres. Its annual meter capacity is 1.1 crore units. In FY26, Metering & Systems contributed about 57 per cent of revenue, while C&I contributed about 43 per cent.

Q1 FY27 Financial Performance

Revenue from operations rose 34.5 per cent year-on-year to Rs 515 crore in Q1 FY27, supported by broad-based growth across the business. C&I delivered its highest-ever quarterly revenue of Rs 278 crore, up 55.0 per cent year-on-year, increasing its share of quarterly revenue to about 54 per cent from 47 per cent a year earlier.

Metering, Systems & Services represented about 46 per cent of Q1 FY27 revenue. Despite the strong sales growth, profitability weakened. EBITDA declined 9.4 per cent year-on-year, while EBITDA margin contracted by 283 basis points to 12.3 per cent from 15.1 per cent. Gross margin declined to 30.3 per cent from 38.0 per cent. PAT fell 2.4 per cent year-on-year to Rs 18.9 crore, and net profit margin declined by 115 basis points to 3.7 per cent.

The report attributes the margin pressure primarily to volatility in metals and industrial plastics, as well as an adverse revenue mix.

C&I Growth and Management Commentary

Management said C&I growth is being supported by channel expansion and demand from builders, OEMs, solar OEMs, telecom and institutional customers. It also indicated that Wires & Cables growth is increasingly volume-led rather than driven by commodity-price inflation.

Management expects the current margin pressure to be temporary and has taken pricing actions across Wires & Cables, Lighting and Switchgear. Its focus is to improve gross margins through pricing, product mix, cost competitiveness and operating leverage as C&I scales.

Smart Metering Order Book and Revenue Visibility

In smart metering, management described the industry as moving from a high-growth and policy-uncertain phase towards a more mature and stable growth trajectory. HPL has an estimated 20 per cent domestic meter-market share and more than two decades of relationships with state and central utilities.

The order book stood above Rs 3,200 crore as of August 7, 2026, with about 96 per cent attributable to Metering, Systems & Services. ICICI Securities estimates that the order book is about 3.1 times FY26 smart-metering revenue, or roughly three years of segment revenue at the prevailing run rate. The broker views the large metering backlog and the faster-growing C&I business as supporting sustained topline growth and reducing dependence on metering alone.

Financial Outlook

ICICI Securities forecasts revenue to increase from Rs 1,811 crore in FY26 to Rs 2,540 crore in FY28E, implying an 18.4 per cent CAGR. PAT is projected to rise from Rs 91 crore to Rs 122 crore, representing a 15.7 per cent CAGR. FY27E EBITDA margin is estimated at 13.2 per cent before recovering to 14.2 per cent in FY28E.

Key Risks

• Delays in execution could affect the company’s growth outlook.
• Raw-material-cost volatility could put further pressure on margins.