HPL Electric zooms 50% in 1 month on robust order book, revenue visibility

The management expects that the demand for the company's products from the domestic markets to continue unabated over the rest of FY23

Shares of HPL Electric & Power hit a multi-year high of Rs 101.30 as they rallied 9 per cent on the BSE in Friday's intra-day trade. The stock was trading at its highest level since June 2018, while it had hit a record high of Rs 198 on October 4, 2016, data shows.

The stock of electric equipment manufacturing company has zoomed 50 per cent in the past one month on robust order book, and strong revenue visibility. In comparison, the S&P BSE Sensex has gained 6 per cent in one month. 

HPL Electric is manufacturing a diverse portfolio of electric equipment, including metering solutions, switchgear, lighting equipment and wires and cables, catering to consumer and institutional customers in the electrical equipment industry. HPL had the largest market share in India's electricity energy meters market, with one of the most comprehensive portfolios of meters in India.

On October 21, BSE had sought clarification from HPL Electric & Power with reference to movement in volume. The reply is still awaited.

For April-June quarter (Q1FY23), HPL Electric had reported profit after tax of Rs 6.3 crore, against a loss of Rs 19.9 crore. The company’s revenue surged by 129 per cent year-on-year (YoY) to Rs 295.60 crore, while metering & systems segment registered a revenue growth of 185 per cent YoY. Earnings before interest, taxes, depreciation, and amortization (Ebitda) margin expanded by 512 bps and stood at 12.7 per cent in Q1FY23.

During Q1FY23, the company had received very strong and healthy inquiries in smart meters, as both the public and private sectors were seeing great economic benefit in deploying next generation meters. By the end of Q1FY23, the company’s order book stood at a healthy level at Rs 832 crore. The management expects that the demand for the company’s products from the domestic markets will continue unabated over the rest of FY’23.

The Company is targeting a double-digit revenue growth for the near term. The current order book ensures enough revenue visibility for the short and medium term.

While the Company expects the B2B segment to pick traction in the second half of FY 2022-23, the B2C will outperform in FY 2022-23 on the back of buoyant economy and underlying themes playing out like increased urbanisation, move from unorganised to organised, premiumisation, rise of nuclear family, higher rise in disposal incomes, among other factors.

Additionally on the Utilities business, Smart Meter provides a great opportunity and the Company being one of the key players in the segment is likely to benefit the most in the near to medium term, HPL Electric said in its FY22 annual report.