Dear Shareholders

At the very outset I feel proud to say that FY 2021-22 has been anexceptional year for us. We crossed the Rs 1000+ Crore mark in revenue and haveprogressed on our strategic goals which in an improving industry scenario has openedmultiple value creation opportunities.

I am happy to note that we have delivered secular growth across allbusiness categories led by a good traction in our robust portfolio of products. Wemaintain a favourable stance for the growth trajectory of our consumer and industrialbusinesses alongside remaining focussed on exploring and evaluating new opportunities.With a solid order book position a balanced approach towards leverage and liquidityprofile and benefiting from our low capex model and adequate capacity we are all set tofuel our medium-term growth plan.

Let me start with the macro context. The year started with a severesecond wave of COVID-19 pandemic. However since the initial setback the economicactivity has been on recovery. Thanks to the fiscal and policy stimulus efforts of theGovernment the country is steadily moving towards the pre-COVID normal level. The yearthough was marred with immense challenges around supply chain and inputs price inflation.

Coming out of pandemic the world is facing a greater risk ofstagflation led by various geopolitical tensions which have triggered energy and securitycrises. The economies of the US and Euro area have slowed down with record high inflation.

China too is facing an eminent slowdown.

The Indian economy is expected to remain relatively stable amidst theglobal turmoil. It is projected to grow 7.4% in FY 2022-23 to become the world's fastestgrowing major economy. The positive outlook augurs well for all sectors of economyincluding the power and electrical industry. In fact the industry is rapidly evolvingwith the government focussing on ramping up the electrical infrastructure and progressingtowards smart grid. There is also a renewed focus on smart metering to achieve these. Anambitious sum of Rs 22500 Crore has been envisaged to replace 250 million conventionalmeters. The progress has been impressive with nearly Rs 1500 Crore worth of Meteringtenders being floated or expected to be floated in near-term. That puts us in a strongposition given our leadership position in the space.

Performance FY 2021-22

Despite the challenging macro we have delivered a commendableperformance. We closed FY 2021-22 with a 16% growth in revenues to Rs 1014 Crore. EBIDTAwas up 5% to Rs 125.1 Crore. PAT was though lower at Rs 7.8 Crore as against Rs 10 Croredue to a regulatory change which increased tax. Margins were impacted given theunprecedented rise in raw material costs. EBITDA margin was lower at 12.3% as against13.6% in FY 2020-21.

On the business front we have seen broad-based growth with allcategories performing well. The Wire and Cable segment delivered a solid performancegrowing by 72% to Rs 143 Crore though partly aided by a favourable commodity price. TheSwitchgear segment grew by 28% to Rs 206 Crore. The Metering and lighting segmentsregistered moderate growth at 7% and 4% respectively.

In terms of customer type the consumer (B2C) segment drove the growthsurging by 23% to Rs 672.6 Crore to accoun for 66% of the revenue. The B2B segment alsodid good as we saw increased ordering activity from various state utilities. We closed theyear with a net order book of Rs 748 Crore. Smart meters ordering was strong at more than50% of the Rs 337 Crore metering order book indicating the government': strong focus onconverting conventional meters. This bodes well as smart meters attracts higherrealisations and will help improve profitability.

The exports business grew by 48% to Rs 49 Crore led by our efforts toenter new regions and introduce market relevant products.

Progressing smartly on R&D activities

R&D competence and ability to consistently launch high technologyproducts has been key to our success. This year we launched several innovative productsin the meters switchgear and lighting segments.

Noteworthy is the launch of Narrow Band-Internet of Things (NB-IoT)smart meters. It reinforces our dominance in this segment and will be key to capitalisingthe opportunities coming ahead.

Smart and sustainable growth

The outlook for HPL looks encouraging. We are well-placed to stretchour market share in smart meters. We are positive on the Government's move to imposeduties on imported smart meters to encourage local manufacturing. Companies like ourshaving integrated operations where we manufacture most components locally will stand tobenefit.

The consumer electric segment has been witnessing good growth since thepast two years and we see this trend to continue. Our efforts around brand buildingespecially in lower tier regions are delivering positive results. We are committed toexpanding our retail presence to over 100000 sales points.

We see exports business as growing revenue stream. We are now presentin over 40 countries. Besides this year our switchgear testing laboratory got IECCEaccreditation from DEKRA Netherlands. This allows us to undertake independent testing ofMCB & RCCB for KEMA and CB certification. It is a testimony of our competencies andwill help us expand global presence.

Growing smartly will be a key focus for us. We are implementing latestand state-of-the-art smart technologies in our products to stand out in the electricalmarket. We have explored IoT and communication-based technologies for power sectorequipment. We have also implemented smart technology process automation and 'Industry4.0' in our manufacturing.

Final thoughts

On behalf of the Board I thank our stakeholders for being with usthrough the challenges. I specially want to thank the employees who have shown immensededication and commitment to help the Company gain market and strengthen competitivenessduring the tough times of pandemic. The Company has proved its mettle in these times. Withthe scenario now moving towards positivity I am sure that with our product portfoliotechnologies and financial position we will be able to deliver stronger and sustainablegrowth. We seek your continued support in this value creation journey.