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HPL Electric & Power Ltd.

BSE: 540136 Sector: Engineering
NSE: HPL ISIN Code: INE495S01016
BSE 00:00 | 16 Aug 40.80 -1.50
(-3.55%)
OPEN

42.10

HIGH

42.10

LOW

39.80

NSE 00:00 | 16 Aug 40.85 -1.60
(-3.77%)
OPEN

41.85

HIGH

42.60

LOW

39.65

OPEN 42.10
PREVIOUS CLOSE 42.30
VOLUME 6057
52-Week high 84.75
52-Week low 39.80
P/E 9.74
Mkt Cap.(Rs cr) 262
Buy Price 40.50
Buy Qty 1.00
Sell Price 40.80
Sell Qty 132.00
OPEN 42.10
CLOSE 42.30
VOLUME 6057
52-Week high 84.75
52-Week low 39.80
P/E 9.74
Mkt Cap.(Rs cr) 262
Buy Price 40.50
Buy Qty 1.00
Sell Price 40.80
Sell Qty 132.00

HPL Electric & Power Ltd. (HPL) - Chairman Speech

Company chairman speech

Dear Shareholders

We stand at the cusp of dynamic transformation of India's infrastructure; against thisbackdrop we successfully leveraged our robust foundation to deliver improved resultsacross most of our business segments. It is my privilege and pleasure to take you throughthis performance as well as the other highlights of the year and the way forward as Ipresent the 26thA nnual Report of your Company.

In India the first half of fiscal 2018 was marked by the adjustment to the Goods andServices Tax (GST) arguably the biggest and most decisive tax reform in the countrypost-Independence. The GST is a welcome measure as from the longer term perspective as itleads to greater formalisation of the economy and eliminates the cascading effect ofdiverse taxes. While this reform moderated economic growth in the first half of the yearwith stabilisation of the GST the economy bounced back in the second half to reclaim itsposition as the fastest growing major economy in the world. The implementation of GSTdisrupted demand in our trade business in the first half of the fiscal. Channel partnersopted for pre-GST inventory destocking due to lack of clarity and uncertainty overavailability of input tax credit. Restocking by channel partners took time till theteething issues of the new tax regime were largely resolved. Post stabilisation of tradechannels our trade business displayed healthy growth. Switchgear lighting and wires& cables revenues went up 58% 32% and 26% respectively in the second half of the yearcompared to the first half underlining the strong recovery. On a year-on-year basisswitchgear business grew by 12%. While the lighting segment de-grew by 17% due to higherphase of a large bulk LED order in 2017 and also due to phase out of CFL lighting weremain enthused by the strong traction displayed by the LED trade business. The wires andcables segment also remained stable during the year driven by speciality cable orders. Ourbiggest achievement for the year was the impressive revival in our metering business.Successful bids for the right contracts and its efficient execution resulted in meteringbusiness growing by 14% on a year-on-basis. More importantly as on May 31 2018 we havea robust order book of _477.6 crore providing strong revenue visibility over the comingyear. Gaining momentum across all our business verticals in the second half of the fiscalwe achieved steady growth in overall revenues. Total revenues for the year (net of excise)stood at _1036 crore as against _986 crore in the previous year an increase of 5.1%. Ourmargins were however impacted due to unprecedented increase in the raw material prices.Our recent tenders reflect the raw material price increase and thus we are now betterplaced to protect our margins.

We would like to mention that our channel financing scheme has shown good progress andthe benefits are visible at the operational level. We are also committed to improve thequality of our dealer network by bringing on board dealers with clean financial recordsand those focussed on product redistribution. This will ensure fiscal discipline as wellas boost our B2C business. Another important pillar for driving our B2C business is ourconscious investment in brand building. We firmly believe that our brand is a tremendousasset which can help us to enhance our realisations and also our margins. Our advertisingand marketing spend increased by almost 50% on a year-on-year basis. HPL was one of thesponsor to the Royal Challengers Bangalore cricket team of the Indian Premier League(IPL). While cricket enjoys huge viewership across the country our association has led tostrong brand visibility and recall. We are delighted to share that our smart metersreceived the BIS certification making HPL among the select few companies in India to berecognised with this qualification. This milestone enhances our status as atechnologically advanced meter supplier and gives us an edge by way of pre-qualificationin the smart metering opportunity. On the back of the Government's focus on smart gridsand smart cities the market for smart meters is tipped to grow exponentially; with ournew certification we are confident of ushering in promising prospects.

In another landmark achievement we completed the installation of smart lightingsolutions in Bhopal in accordance with the Smart Cities initiative undertaken by theGovernment. Among the 100 shortlisted smart cities Bhopal is the first to have completedthe project of smart lighting. We are proud to partner the Government in their efforts tobuild a New India. At the same time the experience we have gained will prove valuable inour future endeavours. The next energy revolution is upon us: clean energy is here tostay. At HPL building on our culture of innovation we have developed a complete range ofsolar energy solutions. The product diversification will enable us to embrace a brightertomorrow for all our stakeholders. This innovation is the outcome of sustained thrust onresearch and development. We continue to focus on developing new products incorporatingsolar technology and making the existing product line flexible enough to cater to andaccommodate the various specifications of our end customers in India and the InternationalMarket. We finished 2018 on a strong note despite a sluggish start. We are now poised formoving to an even higher growth trajectory. Our positivity has strong roots. As Indiaseeks to provide more a_ordable more accessible reliable and sustainable power to allits people Government projects such as Saubhagya Integrated Power Development Scheme(IPDS) and Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJ) should gain vigour. All of themhave a meter requirement which improves the prospects for our metering business. Inaddition initiatives such as ‘Housing for All' Smart Cities Mission 4Ginstallation in the telecom sector augur well for our different verticals. Switchgear andlighting segments continue to be largely been driven by robust sales in trade businesswhile the wires & cables segment is set to see strong traction driven by trade &speciality cables orders.

Review

The next energy revolution is upon us: Clean energy is here to stay. At HPL buildingon our culture of innovation we have developed a complete range of solar energysolutions. The product diversification will enable us to embrace a brighter tomorrow forall our stakeholders.

We completed the installation of smart lighting solutions in Bhopal in accordance withthe Smart Cities initiative undertaken by the Government.

All the opportunities aside we understand of course that you would like us to shedlight on our internal workings. Here is what you can expect from HPL in the months ahead:strong execution in our metering business; increased focus on controlling costs drivingprocurement efficiency and maintaining working capital requirements at existing levelswhile ensuring healthy sales growth further strengthening our balance sheet; andcontinued management efforts to drive double digit revenue growth across all verticals. Inclosing I would like to acknowledge the efforts and commitment shown by our people. Theircollective experience and expertise keeps us on top of our game. I am also thankful to ourstakeholders including Central and State government bodies customers bankersinvestors creditors and dealers for reposing their trust in our vision and strategies.HPL remains committed to a future of continuous growth. Thank you for joining us on thejourney; we aim to make it a rewarding one.

Sincerely

Lalit Seth

Chairman and Managing Director