HPL Electric and Power announces Q3FY19 results

HPL-Electric-and-Power logo

Lighting revenues grew by 9% YoY in 9M FY19, with a stable Margin profile. The Wires & Cables segment revenues were stable for the first nine months.

HPL Electric and Power Ltd, an established electric equipment manufacturing company in India, manufacturing a diverse portfolio of electric equipment, announces their financial results for the quarter ended December31, 2018.

Our Financial Performance in the first nine months of the financial year 2018-19, has been marked by revenue growth across our core business segments – Metering, Switchgears and Lighting Products. Metering segment grew by 9% YoY in 9M FY19, marginally impacted by delayed inspection and dispatch of orders worth Rs. 19.8 crores in Q3. These will be dispatched in the next quarter and in line with our prior guidance, we expect to record high double-digit growth in this segment, for the full year. Decline in Metering Margin YoY in 9M FY19 was due to the impact of higher polycarbonate prices in the first 2 quarters of CY 2018. However, prices have normalized in the second half of CY2018 and this should lead to better margin in coming quarters.Switchgear segment recorded growth of 32.4% YoY in 9M FY19, driven by sustained growth in trade business. Switchgear Margin continued to improve YoY due to better product-mix and revenue growth. Lighting revenues grew by 9% YoY in 9M FY19, with a stable Margin profile. The Wires & Cables segment revenues were stable for the first nine months.

The Gross Margin for the quarter, at the company level improved by 85 bps, partly due to decline in polycarbonate prices. Q3 FY19 EBITDA Margin expansion YoY, can be attributed to lower Revenue contribution from Wires & Cables. Profitability decline during the quarter was primarily due to decline in overall Revenue and higher depreciation. Our EBITDA Margin in 9M FY19, improved 48 bps YoY driven by implementation of cost rationalisation measures. PAT for the first nine months of FY19, was stable.

Gautam Seth, Joint Managing Director said, “Our robust metering segment order book along with strong execution capabilities,provide a positive outlook for the fourth quarter and the year, overall.We have recently received a Smart Meter orderfor one of the Smart Grid projects. This re-enforces HPL’s position as one of the leading smart meter providers in the country. We expect Metering and Switchgear margins to maintain the upward momentum over the next few quarters, with stable polycarbonate prices and optimal product-mix, respectively.”

“Our ad-spend for the first nine months, stood at 11.9cr. We are working on new brand-building initiatives and strategic marketing campaigns for the forthcoming IPL Season. Our focus remains on procurement efficiencies across business segments and we are ensuring strict control on our operating costs by enhancing our internal component manufacturing capabilities, which will drive margin expansion over the coming quarters”.

Key Developments in Q3 FY19

  • Consolidated order book was Rs 519.1cr (Net of GST) as on 7thFebruary2019
  • Metering orders of Rs 484.7cr
  • Lighting orders of Rs 12.3cr
  • Switchgear orders of Rs 17.5cr
  • Wires & Cables orders of Rs 4.5cr
  •  Excluding inspection delay impact in Q3, Metering segment revenue was line with the previous quarter.
  • Expected to record segment revenues of Rs. 175 crores in the next quarter.
  • Company recently received orders for supply of 28,000 Smart Meters for one of the Smart Grid projects.