Q1 2027 HPL Electric & Power Ltd Earnings Call

August 11, 2026

Speaker #2: Thank you for joining us today for HPL Electric and Power Limited's Q1 FY27 earnings webinar, produced by Elevys. I'm Shankhini, the Director of Investor Relations from Dickinson, and I'll be moderating our call today.

[Company Representative] (Dickenson): Thank you for joining us today for HPL Electric & Power Limited's Q1 FY27 earnings webinar produced by Elevate. I am Shankhini, the Director of Investor Relations from Dickenson, and I will be moderating our call today. Joining us from the HPL management team is Mr. Gautam Seth. He is the Joint Managing Director and CFO. Before we start, please note that this conference is being recorded and that some statements in this call may be forward-looking, subject to current expectations and to risks that could cause results to differ materially. You can also download HPL's investor presentation and press release from the company website or the NSE. I will now hand over to you, Gautam, to begin with opening remarks.

Shankhini Saha: Thank you for joining us today for HPL Electric & Power Limited's Q1 FY27 earnings webinar produced by Elevate. I am Shankhini, the Director of Investor` Relations from Dickenson, and I will be moderating our call today. Joining us from the HPL management team is Mr. Gautam Seth. He is the Joint Managing Director and CFO. Before we start, please note that this conference is being recorded and that some statements in this call may be forward-looking, subject to current expectations and to risks that could cause results to differ materially. You can also download HPL's investor presentation and press release from the company website or the NSE. I will now hand over to you, Gautam, to begin with opening remarks.

Speaker #2: Great. So, joining us from the HPL management team is Mr. Gautam Sate. He's the Joint Managing Director and CFO. Before we start, please note that this conference is being recorded, and that some statements in this call may be forward-looking.

Speaker #2: Subject to current expectations and to risks that could cause results to differ materially. You can also download HPL's investor presentation and press release from the company website or the NSE.

Speaker #2: Perfect. So, I'll now hand over to you, Gautam, to begin with the opening remarks.

Speaker #3: Yeah. Thank you, Shankhini. Good afternoon, everyone, and thank you for joining us today. Q1 FY27 has been a strong start to the year for HPL Electric.

Gautam Seth: Thank you, Shankhini. Good afternoon, everyone, and thank you for joining us today. Q1 FY27 has been a strong start for the year for HPL Electric. Revenue from operations grew 35% year-on-year to INR 515 crores, our highest ever first quarter revenue, and remained above INR 500 crore level despite Q1 typically being a seasonally lighter quarter. EBITDA grew 9% to INR 63 crores while PAT increased to INR 19 crores. More importantly, the quarter further strengthens the two-engine growth model we discussed in FY26. Consumer & Industrial is scaling as a faster cycle product and channel-led platform, while smart metering continues to provide long cycle growth and order book visibility. Together, these businesses are giving HPL Electric a broader and more balanced growth base.

Gautam Seth: Thank you, Shankhini. Good afternoon, everyone, and thank you for joining us today. Q1 FY 2027 has been a strong start for the year for HPL Electric. Revenue from operations grew 35% year-on-year to INR 515 crores, our highest ever first quarter revenue, and remained above INR 500 crore level despite Q1 typically being a seasonally lighter quarter. EBITDA grew 9% to INR 63 crores while PAT increased to INR 19 crores. More importantly, the quarter further strengthens the two-engine growth model we discussed in FY 2026. Consumer & Industrial is scaling as a faster cycle product and channel-led platform, while smart metering continues to provide long cycle growth and order book visibility. Together, these businesses are giving HPL Electric a broader and more balanced growth base.

Speaker #3: Revenue from operations grew 35% year-on-year to ₹515 crore—our highest ever first-quarter revenue—and remained above the ₹500 crore level, despite Q1 typically being a seasonally lighter quarter.

Speaker #3: EBITDA grew 9% to ₹63 crore, while PAT increased to ₹19 crore. More importantly, the quarter further strengthens the two-engine growth model we discussed in FY26.

Speaker #3: Consumer and industrial scaling as a faster cycle product and channel-led platform, while smart metering continues to provide long-cycle growth and order book visibility. Together, these businesses are giving HPL Electric a broader and more balanced growth base.

Speaker #3: Consumer and Industrial delivered its highest-ever quarterly revenue of ₹278 crore, growing 55% year on year, and contributed approximately 54% of the revenue during the quarter.

Gautam Seth: Consumer & Industrial delivered its highest ever quarterly revenue of INR 278 crores, growing 55% year-on-year, and contributed approximately 54% of the revenue during the quarter. The important point for us is not simply that C&I has become larger, it is that growth is becoming broader across various product baskets. Wire and cable continues its strong momentum, with revenue growing 79% to INR 146 crores. Demand remains diversified across builders, industrial OEMs, solar, telecom, retail, and institutional customers. The business has already achieved more than 40% of its full FY26 revenue in the first quarter, and we continue to see increasing evidence of volume-led scale. We are also seeing encouraging participation from other C&I categories. Lighting grew 78% to INR 56 crores. Industrial switchgear grew 19%.

Gautam Seth: Consumer & Industrial delivered its highest ever quarterly revenue of INR 278 crores, growing 55% year-on-year, and contributed approximately 54% of the revenue during the quarter. The important point for us is not simply that C&I has become larger, it is that growth is becoming broader across various product baskets. Wire and cable continues its strong momentum, with revenue growing 79% to INR 146 crores. Demand remains diversified across builders, industrial OEMs, solar, telecom, retail, and institutional customers. The business has already achieved more than 40% of its full FY 2026 revenue in the Q1, and we continue to see increasing evidence of volume-led scale. We are also seeing encouraging participation from other C&I categories. Lighting grew 78% to INR 56 crores. Industrial switchgear grew 19%.

Speaker #3: The important point for us is not simply that CNI has become larger; it is that growth is becoming broader across various product baskets. Wire and cable continues its strong momentum, with revenue growing 79% to ₹146 crore. Demand remains diversified across builders, industrial OEMs, solar, telecom, retail, and institutional customers.

Speaker #3: The business has already achieved more than 40% of its full FY26 revenue in the first quarter, and we continue to see increasing evidence of volume-led scale.

Speaker #3: We're also seeing encouraging participation from other CNI categories. Lighting grew 78% to ₹56 crore, and industrial switchgear grew 19%. The breadth is important because our objective is to build CNI as a diversified electrical product platform, rather than depend on any single category for growth.

Gautam Seth: The breadth is important because our objective is to build C&I as a diversified electrical product platform rather than depend on any single category for growth. Our distribution platform remains central to this strategy. HPL Electric today reaches the market through more than 900 authorized dealers and over 85,000 retailers. As the product basket becomes stronger across wires and cables, switchgears, lighting, fans, and other categories, we have an opportunity to drive greater reach through an established network while continuing to invest in products, brands, and channel relationships. At the same time, smart metering continues to be an important long cycle growth engine. Metering and system grew close to 17% year-on-year to INR 234 crores. As the smart metering market matures, we are entering a more stable execution-led phase with improving visibility and greater consistency in deployment and execution.

Speaker #3: Our distribution platform remains central to the strategy. HPL Electric today reaches the market through more than 900 authorized dealers and over 85,000 retailers. As our product basket becomes stronger across wires and cables, switchgears, lighting, fans, and other categories, we have an opportunity to drive greater reach through an established network while continuing to invest in brands and channel relationships.

Speaker #3: At the same time, smart metering continues to be an important long-cycle growth engine. Metering and systems grew close to 17% year on year to ₹234 crores. As the smart metering market matures, we are entering a more stable, execution-led phase with improving visibility and greater consistency in deployment and execution.

Speaker #3: Our order book stands at ₹3,200 crore as of 7 August 2026, with metering and systems accounting for more than 96% of the total orders. This provides strong medium-term visibility and allows us to remain focused on execution, technology, and service levels.

Gautam Seth: Our order book stands at INR 3,200 crores as on 7 August 2026, with metering and systems accounting for more than 96% of the total orders. This provides a strong medium-term visibility and allows us to remain focused on execution, technology, and service levels. On profitability, EBITDA grew during the quarter, although EBITDA margins moderated to 12.26%. Cash profit increased by 21%. This reflected an input cost volatility, particularly across metals and industrial plastics due to the geographical disruptions, together with the changing revenue mix. We have initiated pricing and product mix actions and remain focused on progressively improving margin quality as the year develops. Higher depreciation following our capacity investments also moderated the translation of operating growth into PAT. The broader direction remains clear. We want to scale both engines with quality and scale.

Speaker #3: On profitability, EBITDA grew during the quarter although EBITDA margins moderated to $12.26%. Cash profit increased to $21%, increased by 21%. This reflected an input cost volatility particularly across metals and industrial plastics due to the geographical disruptions together with the changing revenue mix.

Speaker #3: We have initiated pricing and product mix actions and remain focused on progressively improving margin quality as the year develops. Higher depreciation following our capacity investments also moderated the translation of operating growth into PAT.

Speaker #3: The broader direction remains clear: we want to scale both engines with quality and scale. In CNI, that means widening participation across the product basket, strengthening channel productivity, and building scale in wires and cables.

Gautam Seth: In C&I, that means widening participation across product basket, strengthening channel productivity, and building scale in wire and cables. Likewise for other products as well. In smart metering, it means disciplined execution of the order book, technology differentiation, and maintaining financial discipline. As we progress through FY27, our priorities remain growth with improving margin quality, working capital discipline, calibrated capacity utilization, and continued investment in R&D. Our objective is to convert the scale we are building today into sustainable earning growth and a stronger HPL on a longer term. On this note, let's open the floor for questions.

Speaker #3: Likewise, for other products as well. In smart metering, it means disciplined execution of the order book, technology differentiation, and maintaining financial discipline. As we progress through FY27, our priorities remain growth with improving margin quality, working capital discipline, calibrated capacity utilization, and continued investment in R&D.

Speaker #3: Our objective is to convert the scale we are building today into sustainable earnings growth and a stronger HPL over the long term. On this note, let's open the floor for questions.

[Company Representative] (Dickenson): Thanks, Gautam. Before we start the Q&A session, just a quick reminder on how to raise your hand to join the question queue to ask questions. If you're on desktop or laptop, look for the reactions button at the bottom of your Zoom window. Click on it, then select raise hand from the options. Your name will appear on the queue, and I'll call on you. If you're on mobile or tablet, tap on the more dot, dot button at the bottom right of your screen, then select raise hand from the menu. Perfect. We'll start with the first question that's come written in. Gautam, this question is on the C&I segment. We've seen some good progressive growth in the C&I segment for this quarter.

Shankhini Saha: Thanks, Gautam. Before we start the Q&A session, just a quick reminder on how to raise your hand to join the question queue to ask questions. If you're on desktop or laptop, look for the reactions button at the bottom of your Zoom window. Click on it, then select raise hand from the options. Your name will appear on the queue, and I'll call on you. If you're on mobile or tablet, tap on the more dot, dot button at the bottom right of your screen, then select raise hand from the menu. Perfect. We'll start with the first question that's come written in. Gautam, this question is on the C&I segment. We've seen some good progressive growth in the C&I segment for this quarter.

Speaker #1: Thanks, Gautam. So before we start the Q&A session, just a quick reminder on how to raise your hand to join the question queue to ask questions.

Speaker #1: So if you're on desktop or laptop, look for the Reactions button at the bottom of your Zoom window. Click on it, then select 'Raise Hand' from the options.

Speaker #1: Your name will appear on the queue, and I'll call on you. If you're on mobile or tablet, tap on the More... button at the bottom right of your screen, then select 'Raise Hand' from the menu.

Speaker #1: Perfect. So we'll start with the first question that's come in writing. So Gautam, this question is on the CNI segment. We've seen some good, progressive growth in the CNI segment for this quarter. Can you give us a product-wise breakdown on how you are seeing this progress in the next coming two quarters?

[Company Representative] (Dickenson): Can you give us a breakdown product wise on how you are seeing this progress in the next coming two quarters?

Shankhini Saha: Can you give us a breakdown product wise on how you are seeing this progress in the next coming two quarters?

Speaker #3: Yeah, so CNI has seen growth for the last five quarters now, and each time the absolute value of sales and the percentage of growth are getting larger.

Gautam Seth: Yeah. C&I has seen a growth for the last five quarters now, and each time the absolute value of sales and the percentage of growth are getting larger. Initially it started off more with the wire and cables. But now, we are seeing the growth happening in Switchgears, we are seeing it happening in lighting also. Overall, we are very confident of the growth, what is happening. There has been an expansion in the channel, in terms of dealer, distributor, and more on the retail side, where the retailers are expanding and our products are also expanding in a bigger way. We have a concept of one consumer, one family, which encourages dealer and incentivizes them on taking more products and cross-selling more of the products within the same channel. Overall, the strategy seems to be working.

Speaker #3: So, initially, it started off more with the wire and cables, but now we are seeing the growth happening in switchgears. We are seeing it happening in lighting also.

Speaker #3: So overall, we are very confident of the growth that is happening. There has been an expansion in the channel in terms of dealer distributor, and more on the retail side, where the retailers are expanding, and our products are also expanding in a bigger way.

Speaker #3: We also have, you know, a concept of "one consumer, one family," which encourages dealers and incentivizes them to take more products and cross-sell more products within the same channel.

Speaker #3: So overall, the strategy seems to be working. The numbers are coming up not only in wire and cable, which again looks very strong in the next two quarters, but also we would see growth on the lighting. MCBs are set to grow, which is the final—the complete range of final distribution product accessories.

Gautam Seth: The numbers are coming up, not only in wire and cable, which again looks very strong in the next two quarters, but also we would see growth on the lighting. MCBs are set to grow, which is the complete range of final distribution product accessories, and also on switches. If you see our deck, in fact last month we did launch of our new range, new generation switches by the name of Cairo. That is one segment again, which we are looking to launch in a bigger way across Pan India. We have three more states launch lined up for August. Overall, the next two quarters seem to be pretty good for the C&I segment. We see a growth as well as a channel expansion going forward. We are also monitoring sales based on existing channels as well as the new channels.

Speaker #3: And also on switches, if you see our deck, in fact, last month we did the launch of our new range, new generation switches by the name of Kairo. So that is one segment again which we are looking to launch in a bigger way across pan India.

Speaker #3: We have three more state launches lined up for August, so overall, the next two quarters seem to be pretty good for the CNI segment.

Speaker #3: We see growth as well as channel expansion going forward. We are also monitoring sales based on existing channels, as well as the new channels. Sales are monitored separately, just to ensure that the efforts of channel expansion are, you know, getting us the results.

Gautam Seth: Sales are monitored separately just to ensure that the efforts of channel expansion are getting us the results. There are a lot of changes, what we have done within the team, within our strategy, and also on sales and marketing and the digital marketing as well, to reach out to our consumers.

Speaker #3: So, there are a lot of changes that we have made within the team, within our strategy, and also in sales and marketing, as well as in digital marketing.

Speaker #3: So, to reach out to our consumers.

Speaker #1: Thanks, Gautam. We'll take the next question from the line of Viraj Mahadevia. Hi, Viraj. You can go ahead and ask your questions.

[Company Representative] (Dickenson): Thanks, Gautam. We will take the next question from the line of Viraj Mahadevia. Hi, Viraj. You can go ahead and ask your questions.

Shankhini Saha: Thanks, Gautam. We will take the next question from the line of Viraj Mahadevia. Hi, Viraj. You can go ahead and ask your questions.

Speaker #2: Hi Gautam, congratulations on the fantastic growth in the business.

Viraj Mahadevia: Hi, Gautam. Congratulations on the fantastic growth in the business.

Speaker #3: Thank you, Viraj.

Gautam Seth: Thank you, Viraj.

Speaker #2: To a new execution plane. But something that I noticed, which is highlighted in the deck, is that gross margins have compressed from 38% last year to 30%, and that was probably driven by raw material inflation.

Viraj Mahadevia: to a new execution plane. Something that I noticed, which is highlighted in the deck, gross margins have compressed from 38% last year to 30%, and that was probably driven by the raw material inflation. What steps is the company taking to ensure that we can get up to historical margins? Are you entering into hedging contracts going forward on the day you take the order? Presumably these were legacy orders taken at a different price, and then when you actually go and buy the raw material, you face the price hike.

Speaker #2: So what steps is the company taking to ensure that we can get up to historical margins? Are you entering into hedging contracts going forward on the day you take the order?

Speaker #2: Because presumably, these were legacy orders taken at a different price, and then when you actually go and buy the raw material, you face the price hike.

Speaker #3: No, so yeah, yeah. So if you look at the results, and more importantly at the margins, the way we look at it, the revenue growth has been good.

Gautam Seth: If you look at the results and, more importantly, on the margins, the way we look at it, the revenue growth has been good. C&I, as you know, earlier we had talked about also in our last 2, 3 calls, the momentum on C&I is building to a bigger level, and we see the growth going forward. Even the smart meter is, because last year sequentially, we grew 4 quarters. Even now from here on also, we see the good growth coming in. Of course, more at a mature level, but again, both these segments are set for a good growth on a revenue point of view. When we look at the margins, primarily, there is a single point, on the cost of materials that has gone up, and that has gone up mainly from February onwards because of the West Asia conflict, mostly on the geopolitical issues.

Speaker #3: CNI, as you know, earlier we had talked about this also in our last two or three calls. The momentum on CNI is building to a bigger level, and we see the growth going forward.

Speaker #3: Even the smart meter is because last year, sequentially, we grew for four quarters. Even now, from here on also, we see good growth coming in.

Speaker #3: Of course, more at a matured level, but again, both these segments are set for a good growth on a revenue point of view. Now, when we look at the margins, primarily there's a single point like on the cost of materials, that has gone up, and that has gone up mainly from February onwards because of the West Asia conflict, the all mostly on the geopolitical issues.

Speaker #3: So, for that, we are looking at a lot of work happening in our R&D, especially when we look at smart metering, where the contracts are fixed, the sales prices are fixed, and then the variable part is the cost factor.

Gautam Seth: For that, we are looking at, there is a lot of work happening in our R&D, especially when we look at the smart metering, where the contracts are fixed, the sales prices are fixed, and then the variable part is the cost factor. So we are having, of course, we have long-term contracts, which protects us sometimes on the pricing. We also are looking at couple of design changes, which is, of course, a continuous process, but sometimes driven by external factors, we take it in a bigger way. So there are ways to ensure that alternative materials can be used within the same specifications. Even other than metering in the consumer and industrial also, a lot of work is going on alternate materials, alternate designs. Of course, it takes time. Plus, the price increases are also getting passed on to the consumer.

Speaker #3: So, of course, we have long-term contracts, which protect us sometimes on the pricing. We are also looking at a couple of design changes, which is of course a continuous process, but sometimes, when driven by external factors, we take it up in a bigger way.

Speaker #3: So there are ways to ensure that alternative materials can be used within the same specifications. Even apart from metering, in the consumer and industrial segments also, a lot of work is going on regarding alternate materials and alternate designs.

Speaker #3: Of course, these have to be it takes time. Plus, the prices are the price increases are also getting passed on to the consumer. So like we've just had a couple of increases in the wire and cable.

Gautam Seth: Like we have just had couple of increases in the wire and cable. Of course, the prices get passed on much more quicker than if you look at the switchgears and lighting. But even in lighting in the past quarter, we have seen certain increases happening, which have been first time in last, I think 7, 8 years, we have seen first time an increase happening in the lighting, because till now, historically, only the prices were going down. The pass on in the consumer and industrial is possible, but with a time lag. There are a couple of various things, I would say combination of them happening to ensure that we come back on the margins. At the same time, we just hope that maybe these conflicts see some logical end in the next 1 or 2 quarters, and maybe the prices cool down.

Speaker #3: Of course, that is much more—you know, the prices get passed on much more quickly than if you look at the switchgears and lighting.

Speaker #3: But even in lighting, in the past quarter we have seen certain increases happening, which have been the first time in the last, I think, seven or eight years. We have seen for the first time an increase happening in lighting, because till now, historically, only the prices were going down.

Speaker #3: So, the pass-on in the consumer and industrial segments is possible, but with a time lag. There are a couple of factors—I would say a combination of them—happening to ensure that we come back on the margins, and at the same time, we just hope that maybe these conflicts see some logical end in the next one or two quarters and maybe the prices cool down.

Speaker #3: But in the meantime, the teams the supply chain teams are making full efforts to ensure that the margins are back. But if you look at the other things, the finance cost has come down in the next even in absolute terms in the last three quarters, the even the other expenses have been flat, though there has been a 35% increase in the top line.

Gautam Seth: In the meantime, the supply chain teams are making full efforts to ensure that the margins are back. But if you look at the other things, the finance cost has come down, even in absolute terms, in the last 3 quarters. Even the other expenses have been flat, though there has been a 35% increase in the top line. There are a couple of positives, although depreciation has gone up, and that is mainly because of the higher investments, what we have done in the last 2, 3 years. So that has gone up. But overall, there is a growth in cash profit. And the best thing is that because it is the start of the year, Q1 is typically much lower. C&I also, it is the weakest quarter normally.

Speaker #3: So there are a couple of positives. Although depreciation has gone up and that is mainly because of the investments the higher investments what we have done in the last two, three years so that has gone up but overall the cash profit is there is a growth in cash profit and the the best thing is that because it's a start of the year Q1 is typically you know much slower CNI also it's the weakest quarter normally so we have been able to get off to a good start and the revenue visibility in both the segments even in the near term seems to be good so I think we are all set for a good year in this year for sure.

Gautam Seth: We have been able to get off to a good start, and the revenue visibility in both the segments, even in the near term, seems to be good. I think we are all set for a good year, this year for sure.

Speaker #2: Thanks, Gautam. Just so you know, I checked, and if you had maintained the same level of gross margin as earlier on your delivered top line, your EBITDA margins would have been as high as 20–25%.

Viraj Mahadevia: Thanks, Gautam. I just checked. Had you done the same level of gross margin as earlier on your delivered top line, your EBITDA margins would have been as high as 20% to 25%. Right? That is really the operating leverage kicking in on a normalized raw material cost basis. When you take an order, do you fix the prices and the raw material inflation is not a pass-through and normalizes with a lag of one quarter where you take the price increases in accordance with the raw materials? How does that work?

Speaker #2: Right? So that's really the operating leverage kicking in on a normalized raw material cost basis. But when you take an order, do you fix the prices, and the raw material inflation is not a pass-through and normalizes with a lag of one quarter, where you take the price increases in accordance with the raw materials?

Speaker #2: How does that work?

Speaker #3: No, so, no, you're talking specifically for meters or for...

Gautam Seth: Now, you are talking specifically for meters or for

Speaker #2: Meters, I guess.

Viraj Mahadevia: Meters, I guess.

Speaker #3: Yeah, so meters you have to realize that you know you know the competitive scenario has been changing the customers are of course buying repeatedly the volumes are big so certain prices have been coming down and even historically minus the this the specific this war situation happening the prices also the cost also have been coming down in the last two years and even the end customers because typically they are big EMISPs so they also understand the trends what are happening now here specifically we have seen certain prices going up so when we take an order especially the semiconductors and certain critical electronic components more on the active and the passive components so those are typically we book them and some of the supply like the time period for supplies for certain semiconductors are even going up to 52 weeks so they anyway have to be booked in advance as we get them but then the exchange rates are fluctuating so there are some factors in it but I would say more or less if you because we have been reviewing the way our procurement systems are so more or less we are well covered under that the margins have been fairly good but you will see that in this quarter there's been almost a 3% drop in the margins on the metering side which is mainly because of the sudden price hikes especially on the industrial plastics which have gone up and which are more crude dependent than the metals have gone up for sure the copper is everything almost every metal has been at a high but I think these are these are things which are out of the control of anybody but they cannot be hedged because every time so although we gain many times on the prices going down but we also sometimes lose but the critical parts are more or less covered you know and which is the semiconductor and the ICs and everything so those are typically covered at the time when the orders are received.

Gautam Seth: Yeah. So meters, you have to realize that the competitive scenario has been changing. The customers are, of course, buying repeatedly. The volumes are big. Certain prices have been coming down, and even historically, minus the specific war situation happening, the prices also, the costs also have been coming down in the last two years. Even the end customers, because typically they are big AMISPs, they also understand the trends, what are happening. Here, specifically, we have seen certain prices going up. So when we take an order, especially the semiconductors and certain critical electronic components, more on the active and the passive components, those are typically we book them. Some of the supply, like the time period for supplies for certain semiconductors are even going up to 52 weeks. So they anyway have to be booked in advance as we get them.

Gautam Seth: The exchange rates are fluctuating. So there are some factors in it. I would say more or less, because we have been reviewing the way our procurement systems are, more or less we are well covered under that. The margins have been fairly good. You will see that in this quarter, there has been almost a 3% drop in the margins on the metering side, which is mainly because of the sudden price hikes, especially on the industrial plastics, which have gone up and which are more crude dependent. Then the metals have gone up for sure. The copper is high. All the aluminums, everything. Almost every metal has been at a high.

Gautam Seth: I think these are things which are out of the control of anybody, but they cannot be hedged because every time. So although we gain many times on the prices going down, we also sometimes lose. But the critical parts are more or less covered, and which is the semiconductor and the ICs and everything. So those are typically covered at the time when the orders are received.

Speaker #2: Understood. So, going forward, would you be able to pass these on, in terms of the new metering tenders?

Viraj Mahadevia: Understood. So going forward, would you be able to pass these on in terms of the new metering tenders?

Speaker #3: Yeah, for sure. Because the metering tenders prices are open and even with the newer requirements what are coming definitely I think our teams are highlighting the price increases with the EMISPs but again it's a competitive scenario the customers are also they understand it but they also understand the value of having you know strong partners like us who understand technology who have consistency in supplies in quality and I think that is how the it is emerging out so maybe in future definitely as a company we would be hopeful that certain price increases would be given in the further orders as they're getting finalized and we are already asking them and highlighting the same but again I said it's a competitive scenario and it's a trade-off between you know for them going on whether it's on getting some cheaper prices or going for a experienced partner like us but one has to also understand that the competitive scenario on the smart metering is also changing and it's personally my view and the way I look at the market that people the EMISPs the bigger customers they will understand the relevance of going with experienced players who understand technology who have been you know who are able to give products which actually are top in quality which will work for the 10-year warranty period so I think those type of benefits or perceived benefits what are there are definitely I would say we qualify for that and that is going to definitely help us they it is helping us to get better pricing better more orders in future so I think overall things should be good so this could be a temporary maybe one or two quarters certain disruption on the pricing part the cost part could be there but overall the industry is steady the demand is very strong and the next one two years again we should see a very good growth in the smart metering part.

Gautam Seth: Yes, for sure. Because the metering tenders prices are open, and even with the newer requirements, what are coming, definitely, I think our teams are highlighting the price increases with the AMISPs. But again, it is a competitive scenario. The customers are also, they understand it, but they also understand the value of having strong partners like us who understand technology, who have consistency in supplies, in quality. I think that is how it is emerging out. So maybe in future, definitely as a company, we would be hopeful that certain price increases would be given in the further orders as they are getting finalized. We are already asking them and highlighting the same. Again, I said it is a competitive scenario and it is a trade-off between for them going on, whether it is on getting some cheaper prices or going for an experienced partner like us.

Gautam Seth: But one has to also understand that the competitive scenario on the smart metering is also changing. It is personally my view and the way I look at the market, that people, the AMISPs, the bigger customers, they will understand the relevance of going with experienced players who understand technology, who are able to give products which are actually top in quality, which will work for the 10-year warranty period. So I think those type of benefits or perceived benefits, what are there, are definitely, I would say we qualify for that, and that is going to definitely help us. It is helping us to get better pricing, better, more orders in future. So I think overall things should be good. So this could be a temporary, maybe one or two quarters, certain disruption on the pricing part, the cost part could be there. But overall, the industry is steady.

Gautam Seth: The demand is very strong. The next one, two years, again, we should see a very good growth in the smart metering part.

Speaker #2: Perfect. Thank you. I'll come back with more questions.

Viraj Mahadevia: Perfect. Thank you. I will come back with more questions.

Speaker #3: Yeah, sure. Thank you.

Gautam Seth: Sure. Thank you.

Speaker #1: Thanks, Virat. Our next question, written in by Gautam, is more on the CNI wire and cables. So, we've seen some really good growth in CNI wires and cables.

[Company Representative] (Dickenson): Thanks, Viraj. Our next question written in, Gautam, is more on the C&I wire and cables. We have seen some really good growth in C&I wires and cables. What are we doing to invest more in the channel network and growing this segment? Is it sustainable for next quarter?

Shankhini Saha: Thanks, Viraj. Our next question written in, Gautam, is more on the C&I wire and cables. We have seen some really good growth in C&I wires and cables. What are we doing to invest more in the channel network and growing this segment? Is it sustainable for next quarter?

Speaker #1: What are we doing to invest more in the channel network and grow this segment? Is it sustainable for next quarter?

Speaker #3: Yes, I think when we look at the wire and cables, we've been seeing all-round growth because although there has been an increase in the commodity prices, if you look at our specific growth numbers, Q4 was well over 80% and 78% in Q1. So the levels, even in terms of tonnage of copper that we are using, have really gone up.

Gautam Seth: Yes. I think when we look at the wire and cable, we have been seeing an all-round growth because although there has been an increase in the commodity prices, but if you look at our specific growth numbers, Q4 was well over 80%, 78% in Q1. So the levels, even in terms of tonnage of copper, what we are using, have really gone up. It is almost 1.5, 2 times than what we were doing just a year back. The volumes have gone up, and we have seen an all-round growth, whether it is in the solar part, in industrial, in real estate, and retail, for that matter. So what you are talking about, the channel part, when we look at the retailer, dealer, distributor network. That has been growing. This is really growing, and we are also investing a lot into BTL marketing.

Speaker #3: It's almost one and a half to two times what we were doing just a year back. So, the volumes have gone up and we've seen all-round growth, whether it is in the solar part, in industrial, in real estate, and retail for that matter.

Speaker #3: So what you are talking about the channel part when we look at the retailer dealer distributor network so that has been growing and while this is so this is really growing and we are also investing a lot into the into BTL marketing we are also doing a lot of activities at the last mile sales front you know supporting this whole concept we also have our third you know what we have the last mile sales team which is the the third-party manpower what we say which is which has a beat plan going into each and every retail market so there has been a it's a combination of a lot of thing and definitely it's sustainable in fact not only sustainable you will see growth on the retail front happening not only in this quarter but as we go forward also we it's a long-term expansion ultimately what we are looking at since when we look at the the way we have seen the growth in the next in the last five quarters so that definitely gives us certain you know we are also filled with enthusiasm and we look at it and now the strategies are much more stronger not only to grow the wire and cable but also to put all HPL consumer products in a basket whether they are switch lighting fans wires all together into the retail network so I think we are definitely seeing certain interesting times and the consumer and industrial will see a growth as we go forward yeah.

Gautam Seth: We are also doing a lot of activities at the last mile sales front. Supporting this whole concept, we also have our third, what we have the last mile sales team, which is the third-party manpower, what we say, which has a beat plan going into each and every retail market. It is a combination of a lot of things, and definitely it is sustainable. In fact, not only sustainable, you will see growth on the retail front happening not only in this quarter, but as we go forward also, it is a long-term expansion, ultimately, what we are looking at. Since when we look at the way we have seen the growth in the last five quarters. That definitely gives us certain. We are also filled with enthusiasm when we look at it.

Gautam Seth: The strategies are much more stronger, not only to grow the wire and cable, but also to put all HPL consumer products in a basket, whether they are switch, lighting, fans, wires, all together into the retail network. I think we are definitely seeing certain interesting times, and the Consumer & Industrial will see a growth as we go forward.

Speaker #1: Thanks, Gautam. We'll take the next question from Kunal Dube. Hi, Kunal, you can go ahead and ask your question.

[Company Representative] (Dickenson): Thanks, Gautam. We will take the next question from Kunal Dubey. Hi, Kunal. You can go ahead and ask your question.

Shankhini Saha: Thanks, Gautam. We will take the next question from Kunal Dubey. Hi, Kunal. You can go ahead and ask your question.

Speaker #4: Hi. Hi Gautam, how are you?

Kunal Dubey: Hi, Gautam. How are you?

Speaker #3: I'm fine. Thank you.

Gautam Seth: I am fine, thank you.

Speaker #4: Gautam, great set of numbers. Congratulations. I had two questions, a follow-up from the previous participant. I have been hearing on concalls from Polycab buyers or KEI, the wire company. They see AI being the next big thing for cable demand and all.

Kunal Dubey: Gautam, great set of numbers. Congratulations. I had two questions, a follow from the previous participant. I have been hearing con calls from Polycab or KEI, the wire company. They see AI being the next big thing for cable demand and all. Your view in our C&I segment about the cable industry, you see we catering to that segment as of now or any plans on that? That is one big thing which is there in every cable company's con call, is the first question that I

Speaker #4: Your view on our CINI segment about the cable industry—do you see us catering to that segment as of now, or are there any plans on that? Because that is one big thing which is there in every cable company’s concall.

Speaker #4: Is that the first question?

Speaker #3: Yeah. So by AI, you mean it is on the data centers?

Gautam Seth: Yeah. So by AI, you mean is on the data centers?

Speaker #4: Yes, yes, yes, on the data centers. Yes.

Kunal Dubey: Yes. On the data centers. Yes.

Speaker #3: So, we have studied those segments, and now we are coming into certain new cables which would be more specific to the data centers.

Gautam Seth: We have studied those segments. We are coming into certain new cables, which would be more specific to the data centers. We don't have the full range right now, but hopefully by May, June of next year, we should be having those kind of cables with the international certifications, what are required. A lot of these data centers have international customers or international consultants, so they do require that. That is a segment which we would definitely be looking at. Currently, looking at our existing product portfolio, we don't have the full range, so we are not focusing on that, while we are focusing on many things. That is one segment, and it's a long-term segment again. Next 5, 10 years is going to see a huge growth in the data centers, even in India and globally as well.

Speaker #3: So we don't have the full range right now, but hopefully by May or June of next year we should be having those kind of cables with the international certifications that are required, because a lot of these data centers have international customers or international consultants.

Speaker #3: So they do require that, but that is a segment which we would definitely be looking at. Currently, looking at our existing product portfolio, we don't have the full range, so we are not focusing on that. While we are focusing on many things, that is one segment, and it's a long-term segment. Again, the next 5–10 years are going to see huge growth in the data centers, even in India and globally as well.

Speaker #3: So I think we should be out with those products next year for sure.

Gautam Seth: I think we should be out with those products next year for sure.

Speaker #4: Okay, Gautam, on the second question that you just highlighted a couple back, the EBITDA margins have dropped. But now, what I understand from your commentary is that they will improve from this level; they will not worsen, right?

Kunal Dubey: Okay. Gautam, on the second question, which you just highlighted a couple of back. The EBITDA margins have dropped, but now what I understand, this is your commentary, you say that it will improve from this, it will not worsen off, right?

Speaker #3: Yeah, I cannot comment on geopolitical things, but yes, hopefully, if that's the worst level we've reached, we are making efforts to make sure that we go better from here, for sure.

Gautam Seth: Yeah. Hopefully.

Kunal Dubey: It will improve.

Gautam Seth: I cannot comment on geopolitical things, but yes, hopefully, if that is the worst level we have reached, we are making efforts to make sure that we go better from here, for sure. Yeah, but please, I think you still have some question left.

Speaker #3: Yeah, but please, I think you still have some questions left.

Speaker #4: Yes but my question was like if you see Q2 as such the crude price was basically in the range of 80 85 dollars compared to Q1 so I see crude had come off a little from Q1 so my question is like I just want to understand when you say you cannot assure what is the lead time as such what is your ordering you order a couple of months in advance how is the lead time as such you determine is there a lead time around it?

Kunal Dubey: Yes. But my question was, if you see Q2 as such, the crude price was basically in the range of $80 to $85, compared to Q1. So I see crude had come off a little from Q1. My question is, I just want to understand when you say you cannot assure, what is the lead time as such? What is your ordering? Do you order a couple of months in advance? How is the lead time as such you determine? Is there a lead time around it?

Speaker #3: Yeah there is no our lead times because we have you know proper standard suppliers of PVC plastics and all and some of them are international suppliers so the lead time could be anywhere between 15 days to even two months you know because some of the especially the polycarbonates are all imported so they could have up to two months because they come in containers from outside but the local suppliers are typically you know 10 15 days is the time and they are all very large suppliers in the country okay that is it no I think there's some for now there's some background

Gautam Seth: Yeah. There is. Our lead times, because we have proper standard suppliers of PVC plastics and all, and some of them are international suppliers. So the lead time could be anywhere between 15 days to even 2 months.

Kunal Dubey: Okay.

Gautam Seth: Especially the polycarbonates are all imported. So they could have up to 2 months because they come in containers from outside. But the local suppliers are typically 10, 15 days is the time. And they are all very large suppliers in the country.

Kunal Dubey: Okay.

Gautam Seth: That is it. No, I think there is some.

[Company Representative] (Dickenson): Kunal, there is some background noise.

Shankhini Saha: Kunal, there is some background noise.

Speaker #1: Please keep yourself on mute while Gautam is answering to minimize background noise.

Gautam Seth: But in.

[Company Representative] (Dickenson): I request you to keep yourself on mute while Gautam is answering.

Shankhini Saha: I request you to keep yourself on mute while Gautam is answering.

Speaker #3: Yeah, Kunal, can you just mute?

Gautam Seth: Kunal, can you just mute?

Speaker #1: Yeah.

[Company Representative] (Dickenson): Yeah.

Shankhini Saha: Yeah.

Speaker #3: Yeah, so that is it, but typically the crude would have a direct impact on the inputs that go into it. So, let's say for a PVC, the resin or the DOP or those things have a direct impact, and probably those impacts will come into the PVC in the next 30 to 50 days. So, you know, it's not that if crude goes down today, then the price would become cheaper, and similarly when it goes up. I guess there is a typical time lag, so I will not know too much on their supply chain—how it happens—but it takes time for things to go up as well as come down when you look at the industrial plastics.

Gautam Seth: Yeah. That is it. But typically, the crude would have a direct impact on the inputs, what go into it. So let's say for a PVC, the resin or the DOP or those things have a direct impact, and probably those impacts will come into the PVC in the next 30, 50 days. So, it is not that if crude goes down today, that the price would become cheaper. Similarly, when it goes up, I guess there is a typical time lag. So I will not know too much on their supply chain, how it happens, but it takes time for things to go up and as well as come down when you look at the industrial plastics. That is it, Gautam, from my side. I wish you the very best. Thank you for your time once again. Yeah. Thank you. Thank you.

Speaker #4: That said, Gautam, from my side, I wish you the very best. Thank you for your time once again.

Speaker #3: Yeah thank you.

Speaker #4: Thank you.

Kunal Dubey: Thank you.

Speaker #1: Thanks, Kunal. Our next question will be from the line of Chandresh Malpani. Hi Chandresh, you can go ahead and ask your questions.

[Company Representative] (Dickenson): Thanks, Kunal. Our next question will be from the line of Chandresh Malpani. Hi, Chandresh. You can go ahead and ask your questions.

Shankhini Saha: Thanks, Kunal. Our next question will be from the line of Chandresh Malpani. Hi, Chandresh. You can go ahead and ask your questions.

Speaker #2: Yeah hi thank you for so much for the opportunity. So my first question is on the you know like since you mentioned in your last concall that Adani is our you know bigger customer so sir since Adani you know acquiring Intelli Smart now and also he there are news that he's going to acquire an OEM which will have a meter manufacturing capacity so how are you seeing this overall you know scenario with you know the biggest MISP is there a threat you know where he will acquire a player and the quantum of orders that you know HPL is going to cater in the future would have some impact or your your view on this thing?

Chandresh Malpani: Yeah, hi. Thank you so much for the opportunity. Sir, my first question is on, since you mentioned in your last phone call that Adani is our bigger customer. Sir, since Adani acquiring IntelliSmart now and also there are news that he is going to acquire an OEM, which will have a meter manufacturing capacity. So how are you seeing this overall scenario with the biggest AMISP? Is there a threat where he will acquire a player and the quantum of orders that HPL is going to cater in the future would have some impact, or your view on this thing?

Speaker #3: Yeah so on the first part of news that they have acquired Intelli Smart I think that has been a very positive for us because we were preferred vendors and approved in both of them so I think that consolidates our position with them as a combined entity so I think that is good that's been very very positive for us so that is it on the second part of them buying okay it's it's a news right now I'm not sure how that is going to do it so but you know we are right now with every independent AMISP and so anybody so so our business is pretty spread out and so we are not dependent on one or two just AMISPs for our for our business volumes so that is it so as the business let's also hope and see how how that really closes but I won't be able to comment more on the the second part of your question.

Gautam Seth: Yeah. On the first part of news that they have acquired IntelliSmart, I think that has been very positive for us because we were preferred vendors and approved in both of them. I think that consolidates our position with them as a combined entity. I think that is good. That has been very positive for us. That is it. On the second part of them buying, it is a news right now. I am not sure how that is going to do it. But we are right now with every independent AMISP. Our business is pretty spread out, and so we are not dependent on one or two just AMISPs for our business volumes. That is it. As a business, let us also hope and see how that really closes. But I will not be able to comment more on the second part of your question.

Speaker #2: Okay, got it, sir. But directionally, let's say if Adani was, you know, let's say in three or six months he was in a process to acquire a player—so how has our ordering with them been? Has it been steady state? I'm not asking for absolute numbers, but just a directional view you can give, because our order book has remained more or less around 3,000-odd crore rupees in smart metering since the last four or five quarters, I guess. So just directionally, if you can help us understand.

Chandresh Malpani: Okay. Got it, sir. But directionally, let us say if Adani was, in three or six months, he was in a process to acquire a player. So how has been our ordering with them? Has it been steady state or I am not asking absolute numbers, but just a directional view you can give, because our order book has remained more or less around INR 3,000 crore in smart metering since last four, five quarters, I guess. Just directionally, you can help us understand.

Speaker #3: Yeah so if you see the order flow is continuous but I have said it even two three years back that the the time of big orders is from the AMISP so you what you have to understand is that a lot of let's say you talked about one AMISP so maybe let's say they're sitting on four crores of orders or five crores of meter orders so they are not going to give away the ordering now process is like any regular business which is typically given out based on requirements which they see specific requirements which they see in the next three to four months you know it's not going to be the next two three year requirements are given to one player and locking the price so it's not going to be like that now that is how when an industry matures that is how it is going to see there we stand to gain more on that in the the way the current process is because our product speaks for itself our technology speaks for itself and e the more we are supplying with more AMISPs the more we are getting preferred and the way I see the disruption in the next two years I would definitely see a bigger consolidation happening even at meter you know meter manufacturer level the bigger and established players who are consistent with quality and technology stand to definitely gain out of that and sometimes the not so focused players or certain smaller players may definitely you know leave out of the industry or may not you know grow the way they are looking to grow so there is already certain level of consolidation happening at a meter manufacturer level and I think our quality and technology speaks for itself and that is going to get us the further business so the more repeat orders are there the more AMISPs become strengthened here and I think the volumes are large it's a huge game no company can today look at only one supplier and work based on that so this is just how I look at the market so I think I think that's how the competitive scenario is but we definitely are at an advantage right now and our teams are really working hard to make sure we keep those advantages with us as we go forward.

Gautam Seth: Yeah. If you see the order flow is continuous, but I have said it even two, three years back that the time of big orders is from the AMISP. What you have to understand is that a lot of, let us say, you talked about one AMISP, so maybe let us say they are sitting on 4 crore of orders or 5 crore of meter orders. So they are not going to give away. Their ordering now process is like any regular business, which is typically given out based on requirements which they see, specific requirements which they see in the next three to four months. It is not going to be the next two, three-year requirements are given to one player and locking the price. It is not going to be like that now. That is how when an industry matures, that is how it is going to see.

Gautam Seth: There we stand to gain more on that, in the way the current process is, because our product speaks for itself, our technology speaks for itself. The more we are supplying with more AMISPs, the more we are getting preferred. The way I see the disruption in the next two years, I would definitely see a bigger consolidation happening even at meter manufacturer level. The bigger and established players who are consistent with quality and technology stand to definitely gain out of that. Sometimes, the not so focused players or certain smaller players may definitely leave out of the industry or may not grow the way they are looking to grow. There is already a certain level of consolidation happening at a meter manufacturer level, and I think our quality and technology speaks for itself, and that is going to get us the further business.

Gautam Seth: The more repeat orders are there, the more AMISPs become strengthened here. I think the volumes are large. It is a huge game. No company can today look at only one supplier and work based on that. This is just how I look at the market. I think that is how the competitive scenario is. We definitely are at an advantage right now, and our teams are really working hard to make sure we keep those advantages with us as we go forward.

Speaker #2: Okay that was helpful sir and second question is on the you know overall industry wide tendering and execution so there's I mean no meaningful tenders that have come into the market so what is your view because Tamil Nadu has also kind of you know halted their tenders so what's your overall view because in your in your earlier mention you earlier question you mentioned that how the ordering flows if you know AMISP sitting with a four crore meter order so how this will flow so on the first part is the tendering part and second the execution I think in Q1 the execution in the in the at the country level has gone down so how how are you seeing this year comparative to FY26?

Chandresh Malpani: Okay. That was helpful, sir. My second question is on the overall industry-wide tendering and execution. There are no meaningful tenders that have come into the market. What is your view? Tamil Nadu has also kind of halted their tenders. What is your overall view? In your earlier question, you mentioned how the ordering flows. If AMISP is sitting with a 40 million meter order, how will this flow? The first part is the tendering part, and second, the execution. I think in Q1, the execution at the country level has gone down. How are you seeing this year comparative to FY26?

Speaker #3: No if you look at the figures what are there in the in the public domain I think almost seven crore meters are right now installed as we talk today because it was so I think there there is no it's a continuous process that is happening and for us to you know we are dependent we are a meter supplier so if there are AMISP tenders coming out or no that does not affect us because there is enough orders already finalized on AMISPs which can take care of our requirements our future growth in a very aggressive manner the next two to three years so I think it doesn't bother us already we are sitting on large orders there are a lot of orders still the AMISPs are holding for themselves so right now the pipeline is very strong as far as we are concerned what you are talking about tenders not coming out or maybe slow but I'm not so aware of that but that is more for an AMISP to think for them but if you look at the overall number given out by the the ministry so a large part of the first phase of installation of 25 crore meters have already been tendered out so I think the that's the that's a cycle by the industry so that does not bother us even if you look at the next three to four years there is enough volume still available for a meter manufacturer like ASEA.

Gautam Seth: No. If you look at the figures, what are there in the public domain, I think almost 70 million meters are right now installed as we talk today, because it was 6.9 the last official figure. I think it is a continuous process that is happening, and for us, we are dependent. We are a meter supplier, so if there are AMISP tenders coming out or no, that does not affect us because there is enough orders already finalized on AMISPs, which can take care of our requirements, our future growth in a very aggressive manner the next two to three years. I think it does not bother us. Already, we are sitting on large orders. There are a lot of orders still the AMISPs are holding for themselves. Right now the pipeline is very strong as far as we are concerned.

Gautam Seth: What you are talking about tenders not coming out or maybe slow, but I am not so aware of that. That is more for an AMISP to think for them. If you look at the overall number given out by the ministry, a large part of the first phase of installation of 250 million meters have already been tendered out. I think that is a cycle by the industry. That does not bother us. Even if you look at the next three to four years, there is enough volume still available for a meter manufacturer like us here.

Speaker #2: Okay, got it, sir. And sir, one last question. I guess two years back we signed an MOU with a Chinese player for relay local assembly and manufacturing of relays. So are we, you know, manufacturing relays, and how much are we doing captively for our smart meters?

Chandresh Malpani: Okay, got it, sir. One last question. Two years back, we signed an MOU with a Chinese player for a relay local assembly and manufacturing of relay. Are we manufacturing relay and how much captively are we doing it for our smart meter?

Speaker #3: Yeah so I think you know one thing for sure that we are making efforts to you know to ensure that we go into backward integration couple of components are identified which you know we would be directly or indirectly ensuring that they are available and they are you know backward integrated into our processes so as I am more information on this currently I won't be able to share much on this particular transaction but as we have something more definitely things are in progress there are some things happening but as we have more information we would be sharing it with that yeah with you all of all of you for sure.

Gautam Seth: Yeah. I think one thing for sure is that we are making efforts to ensure that we go into backward integration. A couple of components are identified, which we would be directly or indirectly ensuring that they are available and they are backward integrated into our processes. As I have more information on this, currently, I will not be able to share much on this particular transaction, but as we have something more, definitely things are in progress. There are some things happening, but as we have more information, we would be sharing it with all of you for sure.

Speaker #2: Okay, but currently we do not have a manufacturing setup, right?

Chandresh Malpani: Okay. But currently we are not having a manufacturing setup, right?

Speaker #3: No, not as on today, but yes, there are, you know—probably in a different way, you know, the way we structure the thing. That's how we will be—we are working on that, but there definitely is work on the particular components. Work on the technologies is going on, definitely.

Gautam Seth: No, not as on today.

Chandresh Malpani: Okay.

Gautam Seth: But yes, probably in a different way. The way we structure the thing, that is how we are working on that. But definitely there is work on the particular components, work on the technologies going on, definitely.

Speaker #2: Okay, got it, sir. Thank you, and all the best.

Chandresh Malpani: Okay. Got it, sir. Thank you and all the best.

Speaker #3: Yeah thank you.

Gautam Seth: Yeah. Thank you.

Speaker #1: Thank you, Gautam. We'll take another written question. This question is pertaining to margins again. The question is: Are we looking at any backward integration in order to de-risk from supply chain disruptions?

[Company Representative] (Dickenson): Thanks. Gautam, we will take another written question. This question is pertaining to margins again. The question is: Are we looking at any backward integration in order to de-risk from supply chain disruptions?

Shankhini Saha: Thanks. Gautam, we will take another written question. This question is pertaining to margins again. The question is: Are we looking at any backward integration in order to de-risk from supply chain disruptions?

Speaker #3: Yes so as far as possible if you see HPL you know historically if you look at even the last 25 years every of our product division we have seven factories all of them are very well backward integration so while we are into switchgears lighting wire cable metering if you see we are very strong on right from tool rooms we have three tool rooms we have over 100 injection molding machines so entire industrial plastic manufacturing is very well backward integrated we have electronic manufacturing which is very large in fact just two years back we expanded that to a totally international level in terms of quality and scale the sheet metal is again very well backward integrated so most of the critical components whether they are copper or sheet metal are manufactured in-house that ensures not only a supply chain continuity it ensures quality it ensures that the right pricing is happening so that is a underlying philosophy of HPL where we have always been you know very well into manufacturing and backward integrated manufacturing now coming to your question I think it's it probably it's more because of the metering part what we were talking in the earlier question so here also if you look at the existing metering many of the components are today all manufactured in-house which are regular now when we look at these relays or some of the critical components which till now were not being manufactured in India so with the you know the government also has been giving directives on ensuring that the maximum components of smart metering need to be made in India so we have also been making efforts conscious efforts to ensure that these are to be made in India so I think you will hear from us as we because these are long these are highly technical products they are long you know they have a long drawn process of ensuring the specific machines are coming in and also certain actions have been taken but as we come close as we have more material information definitely we will be sharing it.

Gautam Seth: Yes. As far as possible, if you see HPL historically, if you look at even the last 25 years, every of our product division, we have seven factories, all of them are very well backward integration. While we are into switchgears, lighting, wire, cable, metering, if you see, we are very strong right from tool rooms. We have three tool rooms. We have over 100 injection molding machines. So entire industrial plastic manufacturing is very well backward integrated. We have electronic manufacturing, which is very large. In fact, just two years back, we expanded that to a totally international level in terms of quality and scale. The sheet metal is again very well backward integrated. So most of the critical components, whether they are copper or sheet metal, are manufactured in-house.

Gautam Seth: That ensures not only a supply chain continuity, it ensures quality, it ensures that the right pricing is happening. So that is an underlying philosophy of HPL, where we have always been very well into manufacturing and backward integrated manufacturing. Now coming to your question, I think it is more because of the metering part, what we were talking in the earlier question. So here also, if you look at the existing metering, many of the components are today all manufactured in-house, which are regular. Now, when we look at these relays or some of the critical components, which till now were not being manufactured in India. So the government also has been giving directives on ensuring that the maximum components of smart metering need to be made in India. So we have also been making efforts, conscious efforts to ensure that these are to be made in India.

Gautam Seth: So I think you will hear from us, because these are highly technical products. They have a long drawn process of ensuring the specific machines are coming in or not. So certain actions have been taken, but as we come close, as we have more material information, definitely we will be sharing it.

Speaker #1: Thanks, Gautam. We'll take another written question. The question is: Could you share some details on R&D, especially on the switchgear side? Which new products are we looking at to launch this year?

[Company Representative] (Dickenson): Thanks, Gautam. We will take another written question. So the question is: could you share some details on R&D, especially on the switchgear side? Which new products are we looking at to launch this year? How are our new products like ATS 370, 390, and ACB accepted in the market in comparison to big companies?

Shankhini Saha: Thanks, Gautam. We will take another written question. So the question is: could you share some details on R&D, especially on the switchgear side? Which new products are we looking at to launch this year? How are our new products like ATS 370, 390, and ACB accepted in the market in comparison to big companies?

Speaker #1: How are our new products like ATS370390 and ACB accepted in the market in comparison to the big companies?

Speaker #3: Yeah so I yeah so so like we have our metering R&D where we have 170 people working in the metering R&D even switchgear R&D has now become much more bigger and meaningful and we are working on new products there have been what the products on ATS what you just mentioned those are new products which have come out if you see since last couple of years maybe last 20 years we've been a market leader on the changeover segment and the ATS is a natural progression in in technology because again it does a similar function but on a automatic basis so the electronics the controllers what we have are new so that's that's a growing segment for us and this helps us to be abreast with technology this is a much more global product launch which we see to sell into many countries here and this will help us to maintain our market share and our sales growth going forward yeah apart from that we are also working on a lot of integration of electronics and communication into the existing switchgear so those are I would say longer drawn projects which are there but that's a future and we would see in the future that a lot of work happening in panels a lot of work happening with electronic integration so those are projects which are ongoing right now and you should see the results maybe in the next two to three years some immediately but some could be much more longer drawn.

Gautam Seth: Yeah. So like we have our metering R&D where we have 170 people working in the metering R&D. Even switchgear R&D has now become much more bigger and meaningful, and we are working on new products. There have been the products on ATS, what you just mentioned. Those are new products which have come out. If you see, since last couple of years, maybe last 20 years, we have been a market leader on the changeover segment. The ATS is a natural progression in technology because, again, it does a similar function, but on an automatic basis. So the electronics, the controllers, what we have are new. So that is a growing segment for us, and this helps us to be abreast with technology. This is a much more global product launch, which we see to sell into many countries here.

Gautam Seth: This will help us to maintain our market share and our sales growth going forward, yeah. Apart from that, we are also working on a lot of integration of electronics and communication into the existing switchgear. So those are, I would say, longer drawn projects which are there, but that is the future. We would see in the future that a lot of work happening in panels, a lot of work happening with electronic integration. So those are projects which are ongoing right now, and you should see the results maybe in the next two to three years. Some immediately, but some could be much more longer drawn.

Speaker #1: Thanks, Gautam. Another written question: With the EU FTA happening at any time, how are we positioned in terms of product certifications and channel partners to tap into this market?

[Company Representative] (Dickenson): Thanks, Gautam. Another written question. With EU FTA happening at any time, how are we positioned in terms of product certifications, channel partners, to tap into this market?

Shankhini Saha: Thanks, Gautam. Another written question. With EU FTA happening at any time, how are we positioned in terms of product certifications, channel partners, to tap into this market?

Speaker #3: No, so sorry. Can you just...

Gautam Seth: No. Sorry, can you just

Speaker #1: Sure. Yeah.

[Company Representative] (Dickenson): Sure. Yeah.

Shankhini Saha: Sure. Yeah.

Speaker #3: Yeah.

Gautam Seth: Yeah.

Speaker #1: So, with the EU FTA happening at any time, how are we positioned in terms of product certifications and channel partners to tap into this market?

[Company Representative] (Dickenson): With the EU FTA happening at any time, how are we positioned in terms of product certifications, channel partners, to tap into this market?

Shankhini Saha: With the EU FTA happening at any time, how are we positioned in terms of product certifications, channel partners, to tap into this market?

Speaker #3: Yeah so so even our current products if you see are most of the products entire switchgear a lot of even certain wire cables and others are all already IEC compliant so we have certain certificates like our MCB is already DECRA certified DECRA is again a European standard and a test house so even our lab even the lab in our factory is DECRA certified lab right now so that entitles us to sell to almost 55 countries with the certification so a lot of our products are compliant they are already certified but as we get more opportunities which are more country specific and which may require certain specific testing so we can do that obviously there is a cost and there is a time involved in each of them but broadly if you look at our switchgears they are IEC compliant as per that and even if you look at the Indian standards most of the standards are today based on IEC so I I think that ensures that the compliances are already there.

Gautam Seth: Yeah. Even our current products, if you see, most of the products, entire switchgear, a lot of even certain wire cables and others, are all already IEC compliant. We have certain certificates, like our MCB is already DEKRA certified. DEKRA is, again, a European standard and a test house. Even our lab, even the lab in our factory is DEKRA certified lab right now. That entitles us to sell to almost 55 countries with the certification. A lot of our products are compliant, they are already certified, but as we get more opportunities, which are more country specific, and which may require certain specific testing, we can do that. Obviously, there is a cost and there is a time involved in each of them, but broadly, if you look at our switchgears, they are IEC compliant as per that.

Gautam Seth: Even if you look at the Indian standards, most of the standards are today based on IEC. I think that ensures that the compliances are already there.

Speaker #1: Thanks, Gautam. We'll take the next question from the line of Ankur Golati. Hi Ankur, you can go ahead and ask your question. Yeah, go ahead, Ankur.

[Company Representative] (Dickenson): Thanks, Gautam. We will take the next question from the line of Ankur Gulati. Hi, Ankur. You can go ahead and ask your questions.

Shankhini Saha: Thanks, Gautam. We will take the next question from the line of Ankur Gulati. Hi, Ankur. You can go ahead and ask your questions.

Ankur Gulati: Hi. Am I audible?

[Company Representative] (Dickenson): Yeah, go ahead, Ankur.

Shankhini Saha: Yeah, go ahead, Ankur.

Speaker #4: Gautam, quick question: what is the normal cost on the metering side in the current order?

Ankur Gulati: Gautam, quick question. With the cost, raw material cost up on the metering side in the current order.

Speaker #3: So, can you be louder, Ankur, please?

Gautam Seth: Can you be louder, Ankur, please?

Speaker #4: Yeah. With the cost going up on the metering side, should we now work with whatever EBIT margins we saw this quarter on the metering side? Is that the new baseline for current orders?

Ankur Gulati: With the cost going up on the metering side, should we now work with whatever EBIT margins we saw this quarter on the metering side? Is that the new baseline for current orders?

Speaker #3: Yeah so you know on a conservative basis you know on an immediate let's say on a this quarter maybe that could be a much more conservative way but although we are looking to improve our margins but it could take some time maybe another an extra quarter more but currently the levels what we are I think that would be you know like a baseline right now for us to pursue although efforts are there to increase enhance them further.

Gautam Seth: So, on a conservative basis, on an immediate, let's say on this quarter, maybe that could be a much more conservative way, but although we are looking to improve our margins. But it could take some time, maybe another an extra quarter more. But currently, the levels what we are, I think that would be like a baseline right now for us to pursue, although efforts are there to increase, enhance them further.

Speaker #4: And the new orders that you're bidding for on the metering side, they are coming in at, what, 11-quarter plus whatever used to be the earlier baseline?

Ankur Gulati: The new orders that you are bidding for on the metering side, they are coming in at what level? Quarter plus whatever used to be the earlier baseline? Is that correct?

Speaker #3: Yeah, so definitely we are pitching in, but as the new orders are coming in, they also have a, you know, lead time for supply. Like, in the sense that for orders if we receive today, maybe the supplies would start maybe in December, January, or even later than that. So there is a certain lead time which would happen, you know, unless they are pure repeat orders with similar specifications by AMISP. So, right now, when we look at it, yes, the margins have come down in metering, and it's, it's more very specific to the geopolitical issue. But let's see. Even the actions that we are taking, they will have certain time lags, you know.

Gautam Seth: Yeah. We are pitching in, but as the new orders are coming in, they also have a lead time for supply. In the sense, orders if we receive today, maybe the supplies would start maybe in December, January, or even later to that. There is certain lead time which would happen until they are pure repeat orders with similar specifications by AMISP. Right now, when we look at it, yes, the margins have come down in metering, and it is more very specific to the geopolitical issue. Let us see. Even the actions what we are taking, they will have certain time lags.

Speaker #4: And on the CNS side, let's say by Q3, you guys should be able to get back to 11-plus margins.

Ankur Gulati: On the C&I, about Q3, HPL will be able to get back to 11% plus margin, is that true?

Speaker #3: Yeah, hopefully we look at that because certain costs are definitely getting passed on, for sure, and certain changes we can do immediately. So, let's assume that, let's say, the copper or these prices more or less remain at these levels—which are, again, high—but let's say even if they remain like this, it gives us a good window to, you know, improve our margins as we reach Q3.

Gautam Seth: Yeah. Hopefully, we will look at that. Because there, certain costs are getting passed on for sure, and certain changes we can do immediately. Until, let us assuming that, let us say, the copper or these prices more or less remain at these levels, which are again high, but let us say even if they remain like this, it gives us a good window to improve our margins as we reach Q3. That is possible for sure.

Speaker #3: That is possible for sure.

Speaker #1: Okay, thanks, Ankur. We have some time for a few more follow-up questions before we take a written question. We'll take our next follow-up from Viraj Mahadevia.

Ankur Gulati: Okay. No problem.

[Company Representative] (Dickenson): Thanks, Ankur. We have some time for some more follow-up questions before we take a written question. We will take our next follow-up from Viraj Mahadevia. Hi, Viraj, you can go ahead and ask your follow-up questions.

Shankhini Saha: Thanks, Ankur. We have some time for some more follow-up questions before we take a written question. We will take our next follow-up from Viraj Mahadevia. Hi, Viraj, you can go ahead and ask your follow-up questions.

Speaker #1: Hi Viraj, you can go ahead and ask your follow-up questions.

Speaker #5: Hi Gautam, thanks for taking it. So Gautam, with the current smart metering buildout, how many years do you think this goes on for? And is there a new wave of smart metering coming in, in terms of a new RDSS scheme? So is this a three-year, a five-year, a ten-year runway in terms of smart metering? And beyond that, what are the other growth vectors that you see coming into play, whether it's getting empaneled for smart metering supplies to the Middle East, Africa, or other such markets, or, you know, other growth engines?

Viraj Mahadevia: Hi, Gautam. Thanks for taking it. Gautam, with the current smart metering build-out, how many years do you think this goes on for? Is there a new wave of smart metering coming in terms of a new RDSS scheme? Is this a 3-year, a 5-year, a 10-year runway in terms of smart metering? Beyond that, what are the other growth vectors that you see coming in play, whether it is getting empaneled for smart metering supplies to Middle East, Africa, other such markets, or other growth engines?

Speaker #3: Yeah so I think it's a very long-term story the smart meter 1.0 I think assuming in six years it gets over thereafter you will see a 2.0 coming in for sure and but maybe it will have a gradual replacement so it may not be that you know the entire 25 crore meters is going to get replaced because some of it is installed in the first second third year and some of it could be in the fourth or the fifth year so everything will not going to replacement at the same time this is what I I just believe that would happen but for sure the smart meter market is here to stay we will we should see certain consolidation and even the 2.0 will have a different level of technology different level of communication and all which will be much more better so you have to realize that while the 1.0 the the smart metering is happening a lot of factors of collecting data ensuring that proper household data is actually available for installation a lot of primary work is happening here so when you see in the future it is only going to be restricted more to replacing the old meter with the new meter so the the base work जो हुआ है which is a very long-term thing that is happening which is going to be very good for the country as a whole because the entire household data the metering data is going to get compiled it is going to be mapped and thereafter whenever they want to change the meter it becomes much more easier so I think that effort is actually you know probably sometimes we find that there is some slow in the slow down in the installation it is only because a lot of primary data and coordination with the utilities is happening but once that data comes on board then to change and to enhance the let's say the the technology and also to use that or rather to use the smart meter to its fullest capacity based on technology also becomes much more meaningful in future so smart meter is here to stay it's not a five seven year it's going to be even more maybe 10 15 years as long as we see electricity consumption and households using it I guess that's going to be longer time we are also in export we are also looking at certifications we in fact you just mentioned Middle East one of the the utilities in Middle East has just approved our metering this is very recent so already we are now moving to the international markets thanks to the scale and technology what we are using in India that would actually make us eligible to go anywhere in the world and look at the smart metering opportunity so as probably you know the Indian market matures it gives us an opportunity to look out which we already have started and then that can be a very very big opportunity going forward you know just picking up one or two first world countries also will really can take us to a different level for sure.

Gautam Seth: Yeah. I think it is a very long-term story. The smart meter 1.0, I think, assuming in 6 years it gets over. Thereafter, you will see a 2.0 coming in for sure. Maybe it will have a gradual replacement. It may not be that the entire 25 crore meters is going to get replaced, because some of it is installed in the first, second, third year, and some of it could be in the fourth or the fifth year. Everything will not go into replacement at the same time. This is what I just believe that would happen. For sure, the smart meter market is here to stay. We should see certain consolidation. Even the 2.0 will have a different level of technology, a different level of communication and all, which will be much more better.

Gautam Seth: You have to realize that while the 1.0, the smart metering is happening, a lot of factors of collecting data, ensuring that proper household data is actually available for installation, a lot of primary work is happening here. When you see in the future, it is only going to be restricted more to replacing the old meter with a new meter. The base work which is a very long-term thing, that is happening, which is going to be very good for the country as a whole. Because the entire household data, the metering data, is going to get compiled, it is going to be mapped, and thereafter, whenever they want to change the meter, it becomes much more easier. I think that effort is actually, probably, sometimes we find that there is some slowdown in the installation.

Gautam Seth: It is only because a lot of primary data and coordination with the utilities is happening. But once that data comes on board, then to change and to enhance the, let's say, the technology and also to use that, or rather to use the smart meter to its fullest capacity based on technology, also becomes much more meaningful in future. Smart meter is here to stay. It is not a five, seven year, it is going to be even more, maybe 10, 15 years, as long as we see electricity consumption and households using it. I guess that is going to be longer time. In export, we are also looking at certifications. In fact, you just mentioned Middle East. One of the utilities in Middle East has just approved our metering. This is very recent. So already we are now moving to the international markets.

Gautam Seth: Thanks to the scale and technology, what we are using in India, that would actually make us eligible to go anywhere in the world and look at the smart metering opportunities. As probably the Indian market matures, it gives us an opportunity to look out, which we already have started, and then that can be a very big opportunity going forward. Just picking up one or two first world countries also really can take us to a different level for sure.

Speaker #5: Fantastic. Good to hear. So basically, the growth vectors are growing consumer and lighting wires and cables, smart metering for the next four years. After that, replacement demand within India and newer markets opening up.

Viraj Mahadevia: Fantastic. Good to hear. Basically the growth vectors are growing consumer and lighting wires and cables, smart metering for the next four years. After that, replacement demand within India and newer markets opening up in smart metering.

Gautam Seth: Yes. If you see the global trend, which even we will follow, but we need to make sure that we are better grounded in each part. Like we have come out with like typically international oil metering companies are into electricity, water, and gas.

Speaker #3: Yes. And then if you see the global trend which even we will follow but you know we need to you know make sure that we are better you know grounded in each part like we've come out with like typically international all metering companies are into electricity water and gas typically these are the three things like this so we have come out with water meter now we it will take some time while we get the approvals while we stabilize on technology and then hit meaningful volumes on that probably gas can be the next one like this because typically the technology the measurement technology is communication electronics a lot of it can be leveraged with the existing staff what we have yeah I think.

Viraj Mahadevia: Right.

Gautam Seth: Typically, these are the three things. We have come out with water meter now. It will take some time while we get the approvals, while we stabilize on technology, and then hit meaningful volumes on that. Probably gas can be the next one, because typically the technology, the measurement technologies, communication, electronics, a lot of it can be leveraged with the existing staff, what we have.

Viraj Mahadevia: Yeah, I think one of your competitors is quite bullish on gas, I think, Gautam.

Speaker #5: One of your competitors is quite bullish on gas, I think, Gautam.

Speaker #3: Yeah, for sure. So eventually, you know, that's a window we will also be looking at probably, but we have internally discussed it many times. But then again, as I said, you know, as HPL, we are very clear that once any new category is launched, until we reach a meaningful business size in that and other things, we just don't like to jump on the next one, you know. There are...

Gautam Seth: Yeah, for sure. Eventually, that's a window we will be also looking at probably. We have internally discussed it many times. But then again, I said that, as HPL, we are very clear that once any new category is launched, until we reach a meaningful business size and that and other things, we just don't like to jump on the next one. There are 10 things to do.

Speaker #5: Understood. But do you have the capability in gas to make these gas meters, or do you need to acquire the technology or tie up with someone?

Viraj Mahadevia: Understood. But do you have the capability in gas to make these gas meters, or you need to acquire the technology or tie up with someone?

Speaker #3: I would say when we look around I think we would have the capability but then there are you know in today's time we are very open on you know any partnership so if any technology needs to be bought or you know if somebody needs to do that I think today with the the way the businesses are structured and with our own strength so I think anybody would we can get the technology we can buy the technology or even develop it in-house so I think those options remain but only thing is putting the business plan and together but right now with electricity going in a big way and once that is maturing then it gives us a window to look look into the other part which we've already taken a step on the water meter so it will take time until we really establish that and get in the numbers over there.

Gautam Seth: I would say, when we look around, I think we would have the capability. But then in today's time, we are very open on

Viraj Mahadevia: Partnerships

Gautam Seth: any partnership. If any technology needs to be bought or if somebody needs to do that, I think today, with the way the businesses are structured and with our own strength, I think we can get the technology, we can buy the technology or even develop it in-house. I think those options remain, but only thing is putting the business plan together. But right now, with electricity going in a big way, and once that is maturing, then it gives us a window to look into the other part, which we've already taken a step on the water meter. It will take time

Viraj Mahadevia: Understood, yes

Gautam Seth: until we really establish that and get in the numbers over there.

Speaker #5: Right, great. One more question, Gautam, is regarding the cash flows and the capex. So now that presumably most of your capex is behind you to produce, whatever, 1.2–1.4 crore smart meters annually, what is likely to be the capex in '27, '28, or '29? How do you see that playing out—annual capex, maintenance plus any new capex?

Viraj Mahadevia: Right. Great. One more question, Gautam, is regarding the cash flows and the CapEx. Now that presumably most of your CapEx is behind you,

Viraj Mahadevia: to produce whatever 1.2, 1.4 crore smart meters annually.

Gautam Seth: Yes.

Viraj Mahadevia: What is likely to be the CapEx in 2027, 2028, or 2029? How do you see that playing out? Annual CapEx, maintenance plus any new CapEx?

Speaker #3: No, so we would find maintenance capex because, you know, tools and dies are a big capex point which get replenished, you know, because there's a lot of injection molding items, even sheet metal, going into that. So right now, I think from a metering perspective, it is going to be more on the maintenance part because we have the capacities now, and they were necessary to bring us to the scale and the volumes and what we are looking at. But there are—this is another, you know, different projects we are working at which will, which may entail certain capex, but they would have a different revenue stream, maybe different categories or something like that. So I think, as we have more information on that, we will definitely be giving out in the public domain. And then, whatever capex specifically would happen, they would have separate revenue streams coming forward for that.

Gautam Seth: No, so we would find maintenance CapEx because tools and dyes are a big CapEx point, which get replenished, because there's

Viraj Mahadevia: Right

Gautam Seth: a lot of injection molding items, even sheet metal is going into that. So right now, I think from a metering perspective, it is going to be more on the maintenance part, because we have the capacities now.

Viraj Mahadevia: Right

Viraj Mahadevia: Right.

Gautam Seth: And they were necessary to bring us to the scale and the volumes and what we are looking at.

Gautam Seth: But there is another different projects we are working at, which may entail certain CapEx, but they would have a different revenue stream, maybe different categories or something like that. So I think as we have more information on that, we will definitely be giving out in public domain. But whatever CapEx specifically would happen, they would have separate revenue streams coming forward for that.

Speaker #5: Understood. So can we say ₹50 to ₹100 crores of capex for the next year or two? It shouldn't be more than that, right?

Viraj Mahadevia: Understood. So can we say INR 50 to 100 crore of CapEx for the next year or two? It shouldn't be more than that, right?

Speaker #3: No it depending on the project but okay as a time comes you will hear about it but they will be definitely certain natural progression from our existing products so it's not something totally out of the way it is something which naturally will help us to grow you know certain of the divisions or the segments so as that comes out we'll put that in the public domain yeah.

Gautam Seth: No.

Viraj Mahadevia: Maximum.

Gautam Seth: Depending on the project.

Viraj Mahadevia: Okay

Gautam Seth: As the time comes, you will hear about it, but there will be definitely certain natural progression from our existing products. It is not something totally out of the way, it is something which naturally will help us to grow, certain of the divisions or the segments. As that comes out, we will put that in the public domain, yeah.

Speaker #5: Okay, great. Thank you. All the best.

Viraj Mahadevia: Okay, great. Thank you. All the best.

Speaker #3: Yeah. Thank you.

Gautam Seth: Yeah. Thank you.

Speaker #1: Thanks, Viraj. We'll take the next follow-up from Chandresh Malpani. Hi Chandresh, you can go ahead and ask your questions. Hi Chandresh, you can go ahead and ask your questions.

[Company Representative] (Dickenson): Thanks, Raj. We will take the next follow-up from Chandresh Malpani. Hi, Chandresh. You can go ahead and ask your questions. Hi, Chandresh. You can go ahead and ask your questions. Yeah, looks like he is busy. That is fine. Before we wrap up, I think before I hand over to you, Gautam, for your closing remarks, I would just like to let all our participants know that we will keep you posted on any upcoming management interactions. We are planning something soon.

Shankhini Saha: Thanks, Raj. We will take the next follow-up from Chandresh Malpani. Hi, Chandresh. You can go ahead and ask your questions. Hi, Chandresh. You can go ahead and ask your questions. Yeah, looks like he is busy. That is fine. Before we wrap up, I think before I hand over to you, Gautam, for your closing remarks, I would just like to let all our participants know that we will keep you posted on any upcoming management interactions. We are planning something soon.

Speaker #1: Yeah, looks like he's busy. That's fine. So, before we wrap up, I think before I hand over to you, Gautam, for your closing remarks, I'd just like to let all our participants know that we'll keep you posted on any upcoming management interactions—we're planning something soon.

Gautam Seth: Yeah.

Speaker #1: So, look forward to hosting you there. And I think, Gautam, if we have time, can I take one more question? We have one.

[Company Representative] (Dickenson): Look forward to hosting you there. I think, Gautam, if we have time, can I take one more question? We have one more.

Shankhini Saha: Look forward to hosting you there. I think, Gautam, if we have time, can I take one more question? We have one more.

Gautam Seth: Yeah, sure. We have the time.

Speaker #3: Yeah, sure, sure, sure. We have the time.

Speaker #1: Okay, great. Hi, Diya. You can go ahead and ask your question.

[Company Representative] (Dickenson): Okay, great. Hi, Diya. You can go ahead and ask your question.

Shankhini Saha: Okay, great. Hi, Diya. You can go ahead and ask your question.

Speaker #2: Thank you for the opportunity. How do we look at revenue and margins in the coming years, sir?

Diya: Sir, thank you for the opportunity. How do we look at revenue and margins in the coming years, sir?

[Analyst]: Sir, thank you for the opportunity. How do we look at revenue and margins in the coming years, sir?

Speaker #3: No so no so the the revenue if you see from both the segments have a strong outlook I will not put a specific number but if you look at smart metering they have a you know a strong visibility if you look at this year next year the next three to five years seem to be a strong visibility we are sitting on orders we are already preferred vendors to most of the AMISPs so overall the smart metering should see steady revenue growths what we are seeing since the last four quarters so that would happen the only thing they are the pace of sales depends a lot on execution so time and again we have seen certain execution challenge not faced by us but by the AMISP so typically they are our customers so it's dependent on that but overall with only seven crore meters installed a lot to go so it's it's it's got a good revenue visibility when you look at consumer and industrial there I would say the next 12 to 18 months will be very strong the the cable and wire segment has been we've been growing well well above the in fact the volume growths are far exceeding even the value enhancements what we see due to the commodities so that is it so I think that momentum we are looking to maintain of of course for a long term but at least the visibility on the 12 18 months we see that so that should be a high double digit growth and so hopefully you should see good revenue growths coming in in the next couple of quarters.

Gautam Seth: The revenue, if you see from both the segments, has a strong outlook. I will not put a specific number, but if you look at smart metering, they have strong visibility. If you look at this year, next year, the next three to five years seem to be a strong visibility. We are sitting on orders. We are already preferred vendors to most of the AMISPs. Overall, the smart metering should see steady revenue growth, what we are seeing since the last four quarters. That would happen. The only thing, there the pace of sales depends a lot on execution. Time and again, we have seen certain execution challenges, not faced by us, but by the AMISP. Typically they are our customers. It is dependent on that. But overall, with only 7 crore meters installed, a lot to go.

Gautam Seth: It has got a good revenue visibility. When you look at Consumer & Industrial, there I would say the next 12 to 18 months will be very strong. The cable and wire segment, we have been growing well above the. In fact, the volume growths are far exceeding even the value enhancements, what we see due to the commodities. That is it. I think that momentum we are looking to maintain, of course, for a long term, but at least the visibility on the 12, 18 months, we see that. That should be a high double-digit growth. Hopefully you should see good revenue growth coming in in the next couple of quarters, yeah.

Speaker #2: And can we go back to 16–17% margins if the Middle East situation eases?

Diya: Can we go back to 16% to 17% margins if the Middle East situation eases?

[Analyst]: Can we go back to 16% to 17% margins if the Middle East situation eases?

Speaker #3: Yes I think if that happens for sure we can do that but right now you know these are out of our control but whatever best we can do to still get back our margins so already the teams are doing that but yes if the situation ends and let's say supply chain disruptions also come down and the crude comes down so definitely that will definitely help us to resume and come back to the margins what we've been making here and in fact why come back even look to grow those margins as the especially if you look at CNI with the volume growths also happening so that also will give us certain triggers of that so one more point on the if you see on the margin front which somehow it's that's missed out is that there have been if you look at the manpower cost so especially in Haryana one has seen that the there has been almost a 40% increase in the minimum wages by the Haryana government in May so and since most of our manufacturing is there so that has also added to the cost on this but even I think the other neighboring states of UP and others have also gone into that so that's also one of the factors where the manpower cost has gone up quite drastically in the first quarter if you see but overall we are aware of this thing and with the volumes and the you know once the revenues are growing in a good manner it gives us a lot of opportunity and window to ensure that the costs are at a minimum level and the margins are there so I think we are working towards that and let's hope that this geopolitical situation eases out.

Gautam Seth: Yes, I think if that happens, for sure we can do that. But right now, these are out of our control. But whatever best we can do to still get back our margins, already the teams are doing that. But yes, if the situation ends, and let's say supply chain disruptions also come down and the crude comes down, that will definitely help us to resume and come back to the margins, what we have been making here. And in fact why come back? Even look to grow those margins, especially if you look at C&I, with the volume growth also happening. So that also will give us certain triggers of that.

Gautam Seth: So one more point, if you see on the margin front, which somehow that is missed out, is that if you look at the manpower cost, especially in Haryana, one has seen that there has been almost a 40% increase in the minimum wages by the Haryana government in May. And since most of our manufacturing is there, that has also added to the cost on this. But even, I think, the other neighboring states of UP and others have also gone into that. So that is also one of the factors where the manpower cost has gone up quite drastically in Q1, if you see.

Gautam Seth: But overall, we are aware of this thing and with the volumes and once the revenues are growing in a good manner, it gives us a lot of opportunity and window to ensure that the costs are at a minimum level and the margins are there. So I think we are working towards that, and let us hope that this geopolitical situation eases out.

Speaker #2: Okay, sir. Understood. And the order book of ₹3,000 crores, it's 90% from smart meters, right?

Diya: Okay, sir. Understood. And the order book of INR 3,000 crore, it is 90% from smart meters, right?

[Analyst]: Okay, sir. Understood. And the order book of INR 3,000 crore, it is 90% from smart meters, right?

Speaker #3: Yeah.

Gautam Seth: Yeah.

Speaker #2: Yeah.

Diya: When do

[Analyst]: When do

Speaker #3: Yeah because you know consumer and industrial does not have long orders like that so so those orders are coming month on month you know but now they are also becoming substantial because typically we are on a month to month basis reaching either highest order books or highest sales so I think that momentum is there but they will never you know ever have very large orders just sitting on the books you know.

Gautam Seth: Yeah, because consumer and industrial does not have long orders like that. Those orders are coming month-on-month. But now they are also becoming substantial because typically we are on a month-to-month basis, reaching either highest order books or highest sales. I think that momentum is there, but they will never ever have very large orders just sitting on the books.

Speaker #2: And when can we expect the execution of these smart meter orders?

Diya: When can we expect the execution of these smart meter orders?

[Analyst]: When can we expect the execution of these smart meter orders?

Speaker #3: Typically, one and a half to two years, they should get executed. But again, sometimes—yeah, typically, they should get executed, but only the execution speed also matters. But normally, the visibility would be two years, let's say.

Gautam Seth: Typically, one and a half, two years, they should get executed. Typically, they should get executed, but only the execution speed also matters. Normally the visibility would be two years, let's say.

Speaker #2: And any major capex that we are planning?

Diya: Any major CapEx that you are planning?

[Analyst]: Any major CapEx that you are planning?

Speaker #3: Capex no in the let's say in the metering and existing product categories it's mainly the maintenance capex which also sometimes because of the tools dies and others that gets substantial plus there is a lot of work on automation happening and so recently we've just commissioned our new machine especially for MCBs which is you know it the the single machine does the work of 44 workers and these are machines which can work for 24 hours almost practically without any person there manufacturing almost 18,000 MCBs so I think there are these are good level international level automations what we are doing so we've just put in overall seven to eight machines in our factories so there are a couple of lot of things and now especially with the even the you know the minimum wage going up in almost every state so it would make a lot of sense to come into more automations which we are looking at and these typically machines have an ROI of three to four years so that also it makes financial sense to actually invest and go into those that is great sir.

Gautam Seth: CapEx, no. In the metering and existing product categories, it is mainly the maintenance CapEx, which also sometimes, because of the tools, dies, and others, that gets substantial. Plus, there is a lot of work on automation happening. Recently we have just commissioned a new machine, especially for MCBs, which the single machine does the work of 44 workers. These are machines which can work for 24 hours, almost practically without any person there, manufacturing almost 18,000 MCBs. I think these are good international level automations, what we are doing. We have just put in overall seven to eight machines in our factory. There are a lot of things, and now, especially with even the minimum wage going up in almost every state, it would make a lot of sense to come into more automations, which we are looking at.

Gautam Seth: These typically machines have an ROI of three to four years. That also it makes financial sense to actually invest and go into those.

Diya: That is great, sir. Thank you so much, and all the best.

[Analyst]: That is great, sir. Thank you so much, and all the best.

Speaker #3: Thank

Speaker #2: Thank you so much, and all the best.

Speaker #3: Yeah thank you dear.

Gautam Seth: Yeah. Thank you, Diya.

Speaker #2: Thanks, dear. Thanks, Gautam. What we'll do now is hand over to you for closing remarks, and then we'll go ahead and close the call.

[Company Representative] (Dickenson): Thanks, Diya. Thanks, Gautam. What we will do now is hand over to you for closing remarks, and then we will go ahead and close the call. Go ahead.

Shankhini Saha: Thanks, Diya. Thanks, Gautam. What we will do now is hand over to you for closing remarks, and then we will go ahead and close the call. Go ahead.

Speaker #2: Go ahead.

Speaker #3: Yeah. So, thank you everyone for your questions, and your continued interest in HPL Electric. Q1 FY27 reinforces our confidence in the direction of the company.

Gautam Seth: Yeah. Thank you everyone for your questions and your continued interest in HPL Electric. Q1 FY27 reinforces our confidence in the direction of the company. Both growth engines are scaling. The business mix is broadening, and our focus is on converting the momentum into better margin quality, cash generation, and sustainable growth. We are also encouraged by the near-term outlook, with the coming quarters looking positive and remain confident that the efforts underway across the business will increasingly translate into stronger operating performance. Have a good day ahead, and thank you for being part of HPL Electric's growth journey. Thank you very much.

Speaker #3: Both growth engines are scaling. The business mix is broadening, and our focus is on converting the momentum into better margin quality, cash generation, and sustainable growth.

Speaker #3: We are also encouraged by the near-term outlook, with the coming quarters looking positive, and remain confident that the efforts underway across the business will increasingly translate into stronger operating performance.

Speaker #3: So, have a good day ahead, and thank you for being part of HPL Electric's growth journey. So, thank you very much.

Speaker #2: Thanks, Gautam, and thanks to everybody for joining us today. For any further follow-up questions or requests regarding the numbers, please feel free to write to me.

[Company Representative] (Dickenson): Thanks, Gautam, and thanks to everybody for joining us today. For any more follow-up questions or requests on the numbers, please feel free to write to me on the email ID on the last page of the deck, and we will be happy to answer you and also set up more interactions with Gautam and the management team as required. Once again, thanks for joining us this afternoon, and like Gautam said, being part of HPL's growth journey. We will see all of you soon. Thank you and have a great day ahead. Cheers.

Shankhini Saha: Thanks, Gautam, and thanks to everybody for joining us today. For any more follow-up questions or requests on the numbers, please feel free to write to me on the email ID on the last page of the deck, and we will be happy to answer you and also set up more interactions with Gautam and the management team as required. Once again, thanks for joining us this afternoon, and like Gautam said, being part of HPL's growth journey. We will see all of you soon. Thank you and have a great day ahead. Cheers.

Speaker #2: On the email ID on the last page of the deck and we'll be happy to answer you and also set up more interactions with Gautam and the management team as required.

Speaker #2: So once again, thanks for joining us this afternoon and, like Gautam said, being part of HPL's growth journey. We'll see all of you soon.

Speaker #2: Thank you and have a great day ahead. Cheers.

Diya: Goodbye

Operator: Goodbye

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Q1 2027 HPL Electric & Power Ltd Earnings Call

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