HPL Electric & Power Limited (NSE: HPL) Q3 2026 Earnings Call dated Feb. 09, 2026
Corporate Participants:
Shankhini Saha — Director of Investor Relations
Gautam Seth — Joint Managing Director & Chief Financial Officer
Analysts:
Sahil Patani — Analyst
Viraj Mahadevia — Analyst
Rishabh Hinger — Analyst
Pranjal Mukhija — Analyst
Kunal Dubey — Analyst
CA Chandresh Malpani — Analyst
Presentation:
Shankhini Saha — Director of Investor Relations
Webinar produced by Elvis so I’m Shankini. I’m the Director of Investor Relations here at Dickinson and I’ll be moderating our call today. Joining us from the HPL management team will be Mr. Gautam Seth. He the joint managing director and CFO of HPL. Please note that this conference is being recorded and that some statements in this call may be forward looking based on current expectations and subject to risks that may cause results to differ materially. So we’ll get started. I’d like to hand over to Mr. Gautam to start with some opening remarks. Take it away, Gautam.
Gautam Seth — Joint Managing Director & Chief Financial Officer
Yeah. Thank you Shankani. Good afternoon everyone and thank you for joining us. Before getting into the financials, I want to briefly share how the last nine months have shaped our direction and how we are positioning HPL for the next phase of growth. Over the last few years we have benefited from our strong B2B order pipeline. the same time, we have worked steadily to scale our branded consumer and industrial businesses. Alongside this, we are focused on improving the quality of our earnings through better product mix differentiation and disciplined execution across the portfolio. These efforts are now showing clear results.
In Q3, our revenue grew by about 21% year on year to roughly 475 crores. EBITDA increased by about 29% to nearly 72 crores. Steady revenue growth combined with better margins is strengthening our earnings profile quarter after quarter. Let me now walk you through our two key business verticals. Smart Metering continues to be our long term growth driver. We currently have an order book of over 3000 crores which gives us clear multi year visibility. After a relatively flat first half, execution picked up meaningfully in Q3. Deliveries increased by around 25% sequentially and were up about 11% year on year.
Our focus on execution discipline product quality helped us support higher deployments during during the November to March period after the monsoon season. Alongside this, our consumer and industrial business is steadily becoming a second core growth pillar for HPL Electric. The business has delivered continuous year on year growth over the last two years supported by faster business cycles and a diversified demand base. This puts us in a strong position to benefit from India’s long term consumption and industrial growth. Switch gears grew by over 33% year on year in Q3 to roughly 68 crores and by 25% in the first nine months to 233 crores.
Wire and cables recorded strong growth of nearly 60% year on year in Q3. But while lighting and electronics return to growth at around 20%. This growth is supported by our expanding distribution network. We now work with over 900 authorized dealers and more than 85,000 retailers which is helping us improve reach, improve conversions and build repeat demand across markets. Let me now touch on how we are preparing for the next phase of growth. We will continue to strengthen both verticals through focused R and D and product engineering while maintaining discipline on capital allocation. In line with this, we have recently launched Neeram plus Smart water meters expanding our metering platform into water infrastructure.
This is a natural extension of our capabilities in our metering segment and opens up a large new addressable market as data driven infrastructure adoption accelerates. To summarize our growth roadmap, electricity meter and industrial products gives us scale and visibility. Water metering adds a new growth engine for the future. And the consumer and industrial business provides a strong growth momentum and that we believe can more than double over the next three to four years. With this, we will open the floor for questions. So over to you Shankani.
Questions and Answers:
Shankhini Saha
Thanks Gautam. We’ll now begin with the Q and A session. So as a reminder, please raise your hand to join the question queue. Here’s a quick reminder on how you can raise your hand. If you’re on desktop or laptop. Please click 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 in the queue and I can call on you accordingly. If you’re on mobile or tablet, tap on the More button on the bottom right of your screen then select Raise Hand from the menu.
Great. So we’ll get started with the Q and A session. Our first question will be from the line of Sahil Patani. Sahil. You can go ahead and unmute your mic and ask your question please.
Sahil Patani
Hi, thanks for the opportunity. So couple of questions Gautam. So our nine month segmental share shows like our consumer industrial services picking up from like 37 to 44% and smart meters kind of dropping from 63 to 56%. So over the next two, three years, what is the steady breakup you see between these two verticals? Would it still be between, you know, 45 for consumer industrials, 55 smart meters or you know, how do you see that?
Gautam Seth
Yeah. So you know, fortunately now we are seeing growth in both the segments and of course the consumer and industrial in the nine months and almost every quarter has seen a very healthy growth year on year. Growth metering is as. As we said in my opening remarks. As I said it’s. It’s a long Term story again, quarter on quarter we’ve had almost 11 growth sequentially it was 25% growth. So metering is also now going to see a good growth. So in a way for us both these verticals are important. We will see both of them really grow henceforth from here.
But on a still in a basis I would see these to be maybe metering in the next two, three years remaining 55%, consumer being 45% although the basis will change and, or maximum up to 50, 50. But in a longer term, if you look at the last decade or last 15 years, it’s practically been almost like a 50, 50 sometimes depending on the business cycles. Right now metering has a very strong growth cycle in the next three, four years. But now since the consumer and industrial has also caught up with that with higher growth rates, we would see that both these segments to continue grow.
But broadly, to answer your question, I would say maybe 55 to 45 could be a, you know, a ratio which will kind of remain.
Sahil Patani
Got it, got it. And my second question is around this, the water smart meters, you know, congratulations on that launch earlier in the year. So three, three parts to that. So one is what is the TAM for smart water meters? You know, what is the time for that? How much revenue contribution do you see from this vertical, let’s say over the next two, three years. And is there an export opportunity as well or would you be looking for just to just cater the domestic market?
Gautam Seth
Yeah, so, so you know, if you look at the, the, you know, you know, we have, of course we’ve done our work and we do see a huge opportunity going forward in the, in the smart water meters. Now if you look at globally also, I’ll just put in a perspective and then probably we can, I’ll answer specifically the three questions. If you look at the global market in the smart, like any metering company globally, the, the big companies, so they are into the electricity, they are into the water and the gas meters. So with HPL Electric also, you know, we’ve been dominating the electricity meters and we feel and we have that kind of ambition to be a global player in metering.
And so our step into this has been that we do see a very big addressable market in the country right now. Probably we don’t have figures or the, the, you know, or there are couple of figures available on various, from various agencies. But nevertheless the, the market is huge, the consumer base is huge. The government has been talking about off and on about, you know, what can be done in this and we we feel that it’s a huge segment to enter and obviously the technologies are available with companies like us also where we see that the basic communication or the, the AMR or the kind of metering accuracies, what are required.
So we have also leveraged our strengths. What we have in the general metering, what we have and we have come out with this one. But in terms of revenues, in terms of exactly what will happen, I think we are, it’s a little early because you know there will be trials, there will be approvals by various agencies as we go forward. But the time taken, let’s say to, for us to establish the electricity meter probably will require much lesser time because of the, the kind of resources already the company has, the kind of manpower, the, the strengths, what we have already in our R and D.
So the time taken to launch this will be far lesser. And I think the, the clarity and execution what we see generally in the government. So once the policies are in, fully in frame, once they are there. So I would say the, the implementations would be, you know, pretty good. So in terms of revenue, we should start seeing something probably in the second half of next year because there are approval processes and others but we have already initiated those. So we do have certain setups with us to get started in this, such a huge industry.
What we see it and it’s, I think it’s a very big plus for HPL because like we have been in electricity meters. So we will be, you know, present and hopefully we should be dominating in future on in this, this segment as well. But exact revenues, what will happen? I think it’s too early too for us to say that. But as we go forward, I’m sure we’ll keep you updated on how we can exploit this.
Sahil Patani
Okay. And is there an export opportunity as well with this?
Gautam Seth
Yes, there is. Of course the specifications, country to country might be different but the basic, the technologies of metering and communication are pretty much the same globally. So we will be exploring that. But right now I think this, the start will have to be in India because until we gain experience, we understand the industry in a better manner. But yes, the global opportunities will be available or are available already.
Sahil Patani
Got it. Thank you Gautam. That’s all from me.
Gautam Seth
Yeah, yeah. Thank you, Sahil.
Shankhini Saha
Thanks for your question. Sahil. Our next line of questions will be from the line of Viraj Mahadevia. Viraj, you can go ahead and unmute your line and ask your questions please.
Viraj Mahadevia
Hi Gautam, how are you?
Gautam Seth
I’m fine, thank you.
Viraj Mahadevia
Gautam. I wanted to check, you know, smart metering has had a bit of ups and downs over the last many quarters in terms of deliveries. Are you seeing most of the challenges, industry challenges behind you? And from here expect to see a more secure trend in smart metering deliveries over the next two to three years?
Gautam Seth
Yeah, so if you look at the earlier, if you look at the earlier challenges, what were there, some of them could have been more on the policy side. But right now I think the, the challenges from the, the policy perspective or any clarity of go, no go, I think those type of challenges are not present. I don’t see that happen in the industry. So right, right now the, the policy is clear. I think the, if you look at the government data, the tenders, a lottery has been already given out to the amisp, even the last bit of tenders are all on the, you know, on the table getting waiting to be, you know, given out to the amisp.
So I think that point that those challenges are not there today. The what challenges in the last, let’s say nine months or 12 months have emerged are mainly, I believe so are mainly from the execution part which are being faced by the amisps. So I think those are also getting addressed. Although maybe like a monsoon or certain things which are out of control of everyone. Probably those challenges may probably remain like this. But I think the skill set for implementation, the, the challenges what are, what are being faced on the ground level due to the support of either the utilities or the meter manufacturers or getting in better skilled manpower to implement.
I think those challenges are now getting overcome and certain states I think have been doing pretty well. Now at least three to four states are doing very high level of or a good level of implementations. I think certain new states are also now joining in for the implementation part. So I think overall certain challenges will always be there whenever such large scale implementations are happening. Especially when it involves the last mile connectivity with, you know, people involved, the end consumer, the utility. So certain things will always remain. But overall I think the, the progress is much better than what it was like this.
And for us, as I said earlier also the, the Q3 has seen a much better execution. We do expect Q4 to be probably the best quarter in the current year in terms of metering supply and installation also from the AMISPs. So overall I think we, we are moving into a good phase where I think in the next two to three years the bulk of the implementation should be taken care of.
Viraj Mahadevia
So does that mean you expect, say let’s say 5 to 6 crore smart meter execution per annum for the next two to three years. And consequently hopefully based on your market share of 20 odd percent, maybe you would be pull up in capacities at 1.2 to 1.4 smart meters sort of sold from your, your end.
Gautam Seth
Yes. So if you look at the, you know, purely going by the run rate of the government data and the kind of projection, so I think that seems to be a possibility of having at least a 5 crore meter being implemented. Of course I cannot talk for the AMISPs of the government, but just my sense of the way we read the market, I think that is not a very. It should not be a big problem for the industry to achieve those figures. And if that happens, we are very confident of our supplies to the AMISPs.
We have the orders. We are currently also, even as we talk we have a lot of our materials going to various amisp. So that is better. So we are, you know, as a company or as an industry, it’s not only one or two amisps which are actually performing, it’s multiple amisps and multiple circles where the work is going on. So I think yeah, that should be a possibility and we ourselves should see a steady, you know, growth in revenue and our dispatches should improve.
Viraj Mahadevia
This last question, are you seeing a pressure on your gross margins given copper prices? Because you know, Q1 had a very good gross margins of about 38% and you know, in the latter quarters you’ve come sort of around 37, 36%. Is copper playing a big role there and is there a lag? Because these are fixed price contracts and you know, copper prices moved up. So the, and will you be able to pass on these higher copper prices in future contracts?
Gautam Seth
So I, I’ll just. So if you look at, you know, the copper or other metals, the, they are mainly affecting our consumer and industrial business. So the smart metering part is not actually affected so much by the copper prices. This is one second if you look at it, yes, the, the prices get passed on. So any increase in the, in the cost are getting passed on to the consumer, but with a lag. So in the maximum impact would happen in the wire and cable where typically it takes two to three weeks to pass on the cost to the consumer.
But over the last couple of months, let’s say if you look at the nine months, there might have been at least six to seven price increases which the industry or even a company like us have affected on our consumers. So those but lags are there. So let’s say if there is a increase today, so maybe it may take two, three weeks for those prices to come. That so in a way that does put certain effect, adverse effect on the margins but it gets passed on when you look at switch gears because again lighting is not so much impacted by that.
But if you look at switch gears, yes, certain part of switchgears has copper playing a big role because copper and silver both, you know they are the current carrying parts. And so there the, you know the passing on gets, it cannot be done on a monthly basis. Generally the industry is doing it after three months, six months depending on that. So there of course we might, yeah we have seen certain, you know, pressures on the margins but eventually the cost gets, gets passed on.
Viraj Mahadevia
This would helpful. I’ll come back with any more questions.
Gautam Seth
Yeah, thank you Viraj.
Shankhini Saha
Thanks for your questions. Viraj. Our next line of questions will be from the line of Rishabh Hinger. Rishabh, you can go ahead and unmute your mic and ask your questions please. Hi Rishabh, you might be on mute. You can go ahead and ask your question.
Rishabh Hinger
Yes. So am I, am I audible now?
Shankhini Saha
Yes, please do go ahead.
Rishabh Hinger
All right Gautam, first of all congratulations for delivering robust results. Now I have a couple of questions from you primarily on the strategy part. So one is are we strictly restricting ourselves to the low to medium voltage market where we are operating. Reason I’m asking this question is if you look at hpl we have strong connect with the utilities desk comps. So a natural extension is a product like EHV cables which is a natural extension for the wires and cable segment. So do we have any such plans in future to venture into these type of segment? Second, my question is regarding the next generation product line.
So our competitors such as Genius Power have got solar inverter, solar, they’re working on solar storage solutions or or on the consumer industrial sides solar panels. So a lot of next generation product lines which are competitors are working on. So has HPL got any such plans to augment these type of product lines?
Gautam Seth
Yeah. So Rishabh, so if you look at our main major portfolio, whether we look at the energy meters, of course in metering we have been, you know all this goes into the distribution segment obviously through the utilities. If you look at the switch gear part and the wire and cable we’ve been into the low voltage, not even in the medium voltage and but that is typically this. But as a strategy if you look at the low voltage market we are covering the entire switchgear basket which goes in from Starting from an air circuit breaker which is the main incomer, then it goes downstream up to the modular switch.
So every kind of switchgear, whether it is a automatic transfer switch, changeovers, MCCBs, contactors, relays, MCB distribution board, the entire chain, we have it. When you look at the lighting, again right from a street light up to the LED bulb. So there are over 200 products what we make which are, you know, whether it’s the panels or what you see in the offices down lighters, everything we make like this. Similarly in the wire cable we have extended. So that has been our, our major strategic USP has been a one stop shop for any kind of home industrial commercial requirements like that.
Now going forward we are already evaluating the. We do realize that it’s a huge market like you were talking about ehv, but it’s a general progression. So we have been studying the market to go into the, the higher kind of cables going up to HT and then ehv. So it’s a, it’s a progression which typically for any good company would take three to five years to actually come out with those ranges like this. But yes, we are actively looking at it and to come into the higher set of cables because our wire cable last three years has seen a very good growth.
We have seen a big, right from a margin improvement up to the market expansion. We have been seeing that and there is a big demand coming in from our own dealer, distributor and customers to come out with a higher cable. So those are the LT power cable and probably going into the lower HD cable. So one, so it’s a, I would say it’s a progression. We are looking at it very actively and as we, you know, maybe down this calendar year we should be able to update you on how we look at the market and what kind of investments and opportunities we see in that.
Now looking at when you’re talking about the solar or other things, we already have a solar division. We are supply. If you look at the top, let’s say the top 10 solar companies, you know, the, the bigger ones who are doing so we are already supplying to them. We have a very strong solar product portfolio starting with the solar cables. We do net metering which is again a very strong product of ours. But when you look at the switchgear on the solar side, on the D.C. side we have the complete distribution boards. So a lot of products on the solar markets are already addressed.
We are already developing a lot of newer products to cater to that. So we are open on that. In fact, last 45 years we already have a complete solar division and we are again growing into that. Now if you look at HPL, you know, with over 180 engineers in R and D and which covers all the things, not only meters but also switch gear, wire and cable, lighting and then into a lot of common technologies like you know, the electronics or the communication and other things. So we are continuously developing lot of new age products in each of our product segments which address to the, to the consumers.
So whether any kind of cables or switchgear would probably go into a data center that we are probably looking at those 5G. We are already doing a good sizable business with all the three major telecom players. Whether it is JIO or you know, you have Vodafone or you have Airtel. So, so a lot of new age opportunities. What we see, we are working on that and obviously the, the revenue obviously gets split into the various divisions, what are there. So yes, we are hopeful on that and including the higher end cable there. So as we have more info we’ll, we’ll come back to you.
Rishabh Hinger
Sure, sure. Thanks. Kauti.
Gautam Seth
Yeah, thank you. Rishabh.
Shankhini Saha
Thanks for your questions. Rishabh, just a note to our participants if you have any more follow up questions, you can keep your hand raised and I’ll join you into the follow up queue. Great. So our next question will be from the line of Pranjal. Mukhija. Pranjal. You can go ahead and mute your mic and ask your questions.
Pranjal Mukhija
Yeah. Hi, I’m Audible.
Shankhini Saha
Yes, please go ahead.
Pranjal Mukhija
Hi sir, I have a couple of questions so just wanted to understand a little bit more about your software piece. I think in the last call also I mean I asked this question. So sir, any clarity on like what we are doing on the software piece?
Gautam Seth
No. So this is regarding the metering we are talking about, right?
Pranjal Mukhija
For the whole AMI piece or maybe you know, the whole energy transition piece also maybe grid solutions like wherever you guys are working. Like I would love to understand in greater detail.
Gautam Seth
No, so I had offered you last time also that I can arrange a separate call. But you know we, apart from the meter supplies, what we are doing we are working on both the billing software as well as the headend system. We’ve been working on that because we are also at least with two of our big customers we have been doing the AMISP as a system integrator. We’ve been working so we’ve been using our own solutions and now we, in a limited way we have started offering the solutions to even the regular AMI sps wherever required.
Yeah. So moving beyond meter we do have certain solutions. But if you want to understand it more technically and just to see what it is probably I can ask Shankini and we can, I can connect you in next two days with our team, you know, so you could understand.
Pranjal Mukhija
We’d really appreciate it. Actually you tried reaching out last time as well but didn’t get any reply. So I hope like you know this, this is fruitful. Thank you.
Gautam Seth
Okay, so we’ll do that. Yeah.
Pranjal Mukhija
Thank you.
Shankhini Saha
Pranjal, any more questions or.
Pranjal Mukhija
No, that’s it. Thank you.
Shankhini Saha
Yeah, thanks. So our next question will be from the line of Kunal Dube. Kunal, you can go ahead and unmute your line and ask your questions please.
Kunal Dubey
Hello.
Shankhini Saha
Hi Kunal. Please go ahead.
Kunal Dubey
Hi. Hi Gautam. Congratulations for the good set of numbers. My question to have joined. I’ve joined the call a little late. I have couple of questions for you first. In the last call you had mentioned that in they would be in the revenue. Our total revenue number is currently 1,291 crores nine months. And you had mentioned that we would be in the pin code of around 1900 crores. So is that number still on? Is my first question to you that we will be able to meet that twenty nineteen hundred crores number. And my second question to you is on the new metering system which we have launched.
Water metering. What is the revenue pipeline or gtm go to market strategy for it.
Gautam Seth
Yeah, so. So in terms of revenue I won’t give a specific number but definitely we look at a much our strongest quarter coming into the Q4 right now. The way we look at it and the you know the schedules, what we have from the various AMI sps I think we should do a fairly good. The turnover into A for the smart metering and the consumer and industrial also is set for another good quarter and a good growth. So even looking, looking at it sequentially or year on year we do expect a good quarter. Now we have done about 470 in the, in the Q3 so definitely we, you know the figure you said we are looking to get there.
But again there could be you know just last moment let’s say if there are some postponements happening from the AMISPs and all but right now we do look at a good quarter. So even, even if you’re not reaching there but we should be getting somewhere close, close to that. So. But on a specific number I probably will not. Won’t be able to confirm to you on that but that should happen.
Kunal Dubey
Okay.
Gautam Seth
Now looking at actually I talked about in the initial on the. On the water meter part. So we have launched the meters of course since the government or the, the gel boards and others are the, the primary consumers of that. So our, you know the, the products would be going for their testing, their approvals. So that is a process which that would happen. And, and but we do see that the government the way things are going on that this would be a future. The government would definitely come out with you know, bigger schemes for their implementations.
So right now we are working on that but specifically on numbers or how what we can achieve. I think as we are reaching the next year maybe in the second half you should start seeing certain things coming on that Gotham.
Kunal Dubey
Just a follow up question to you if I may ask you or if you can give me an answer. Your. We did last year around 500 crores in Q4. We would be in that same line if I, if you could answer that question. If we could match Q4 of FY25.
Gautam Seth
I think we, I think we should see a growth from there. Growth. You know, probably I cannot say that. But yes, I think we are looking at it internally. We do have strong targets. Our teams are you know working day and night to make sure that the best figures are there. But yeah, I think we should have a growth from there.
Kunal Dubey
Thank you Gautam. Thank you for your time and all the very best. Thank you. Thank you.
Shankhini Saha
Thanks for your questions, Kunal. Our next line of questions will be from Chandrash Malpani. Chandrash, you can go ahead and unmute your mic and ask your question please.
CA Chandresh Malpani
Hello, am I audible?
Shankhini Saha
Yes Chandrash, please go ahead.
CA Chandresh Malpani
Yeah, thank you for the opportunity. Sir. First question, you know is on the again the order book itself and the overall broader perspective and we see smart metering about 15 crores meter are awarded. So two questions here again sir, I’ve asked in the past as well that out of 15 crore your sense how much is, you know, passed on to the OEMs. And second sir, we have not seen any meaningful, you know, tendering happening in the last eight to 10, eight to 10 months from the utilities to the AMISP itself where we see Tamil Nadu which is you know a big ticket, 3 crore odd meters.
But the orders have not been finalized. So sir, your overall sense on the, you know, tendering thing because our order book has also remained in the range of 2500 to 3000 odd crores. So our incremental revenue, you know, depends to a large extent to this new Orders that will come in. So your overall thought process here, sir?
Gautam Seth
Yeah. So Chandrash, I don’t know from where you picked up the 15 crore point but I think the government data, if you look at it they are talking about anywhere I think whether it’s 15 or 18 crores more or less the 18 crore business. Out of the 22 and a half crore sanctioned meters I think approximately 18 have been either decided on the AMISPs or they are already. The tenders have been done and L1s probably identified now. So let’s take that as a figure. So you know, because we both probably will go by the figures which are there in the public domain and by the government.
CA Chandresh Malpani
Yeah.
Gautam Seth
So out of those just my sense is that right now if let’s say 5 crore some meters are already implemented, probably 4 to 5 crores are pending orders with the OEMs. Again it’s a calculated guess. I would say maybe this could be lesser. So there are still almost, I would say 6 to 8 crore meters which probably are given out to the AMISPs which need to be awarded to the meter manufacturers like us. So that is, I would, that is kind of the broad calculation. Obviously the execution has picked up. There is no doubt in that.
Now when you look at there are orders coming on a month to month or quarterly basis what is happening is that under the new regulation if you look at that any person, any company listed company if they are to give out their order book details, it is no more. One has to give out the, the quantity, the pricing, the customer details and other things. So if you see in the last couple of months we as HPL Electric we have not been giving out the new order book in the stock exchanges because because of the, you know, the competitive interference what we can find.
And so just to keep those, the confidentiality on the further details and the customer name. So we have not been giving out but the industry has been seeing orders coming out regularly from the amisps to the meter manufacturers and companies like us are also getting orders regularly. So that is happening. So overall things are I would say in place since the pipeline still from the AMISP is pretty large covering almost one and a half years. So we are not worried on that because we are very confident that as and when more and more meters are going into the market and the AMI sps are seeing their, the performance, their data and everything.
So we are definitely eligible as a preferred vendor to get more and more business. So the, this was you know even my take about two, three years back. I have Said it in one of the calls that you will not, you know, continuously you will see more and more recurring orders. The big bang orders will not be there to the meter manufacturers but they would be continuously happening. And this is exactly what is happening. That all the big amisps have been giving orders regularly. Recurring orders but on a smaller levels. But smaller is also in couple of crores.
Definitely. But there are more repeat orders. So you don’t find an order of let’s say 10, 15 lakh meters coming together. Maybe 1, 2 lakh, 3 lakh meters being given out. So that is how the. Because the industry is maturing now. That is how even people realize the performance of good, you know, genuine meter manufacturers like us. So I think that is where we stand to gain. Yeah. So the overall industry scenario is very good. I think the, the industry is on track to maybe in the next maybe instead of three, it may take four years or five years or whatever.
But I think all the meters and many more beyond this will get implemented. And companies like us are definitely to gain on that.
CA Chandresh Malpani
And so second question is on the, when we see the data of government. So is HPL also executing a project as an AMISP for Punjab?
Gautam Seth
No, right now, you know with the, the typical AMISP with the funding and others. So we are not right now doing a full AMISP in that. We are focused on metering, you know, supplying to the AMISP and they are doing in turn the, the financing and the implementation. But we are also offering a couple of added services to the AMISPs which goes beyond the meter supplies. We are doing that and in one or two customers we have been where the financing is not involved in typically in the way the central government AMISP model is. So we have been doing lot of the complete, let’s say the value added services along with that.
CA Chandresh Malpani
Okay, Got it sir. Thank you so much.
Gautam Seth
Yeah, thank you.
Shankhini Saha
Thanks for your questions. Chandraesh. We now have some time for follow ups. We can take one or two maybe before we get into the written questions. So we’ll start with the first follow up from the line of Viraj Mahadevya Viraj. You can go ahead, unmute yourself and ask your follow up questions.
Viraj Mahadevia
Hi Gautam, I want to check has there been any progress in terms of smart metering orders and qualifications with overseas clients as another boat rider.
Gautam Seth
Yes, like last time also I said we have a dedicated team now. So we have, you know, of course the. A lot of tenders are available. We have recently looked at two countries where we can. But you know you have to understand that by the time we get the international certification we do get certain follow up. So maybe some time may be involved in that. So you know, but in the long term I, I see that as a big business happening. So we are like our smart metering solutions. Like we have an upcoming fears coming up in Dubai and in Hanover in Germany.
So I think we will be pitching in now to the global market with our smart meters in a bigger way. I think the experience and the specifications, what we gain from the Indian market in the last two, three years, I think that will, you know, kind of qualify us very well to get into any type of country or markets we want to get in. So but it will take time. So maybe maybe another 12 months from here as we get all the certifications in place. But eventually if we are able to crack even three, four countries, the volumes can be big and the values are far good.
The realizations are pretty good. And especially if you look at the, the European or the, the advanced Middle, Middle east markets, the, the values can be very good. Yeah, the margins also can be good. So we are exploring that and definitely there’s a dedicated work happening in that direction.
Viraj Mahadevia
And how are we placed against the Chinese in some of these markets? I would say in terms of perception, etc.
Gautam Seth
Like no. So if you see, this is just my personal past experience. If you see last, covering last 20 years, the Indian quality and specifications have been much higher than the Chinese for sure. And I’ll give you the reasons why. Because in India we had like China even from the last two decades typically had one specification which they would use it for five years. And that was a, let’s say like a global specifications formed by the central Chinese authorities and they had two, three utilities run the tenders and they would do that. No changes happening in the specifications for a fixed period, let’s say about four, five years.
But the volumes were high. So typically the specifications were frozen but the quantities were large. So they went into very good, you know, smart way of manufacturing those because the quantities were large and the, the specs were fixed. India on the other hand, if you see in the last two decades are, we had multiple utilities, let’s say 25 states ordering. So every utility had a different specification. So that was driving the specification each time and many times each state coming out, let’s say with two or three tenders would up the specification each time. So that put a lot of pressure on the R and D for the meter manufacturers and companies like us and maybe one, two of them who really survived those years and really kept abreast with the technology that made the meter very strong like this.
So if you compare one on one on the technology, I think India is far above and now with the smart meter in place and probably I would say one of the biggest rollout of smart meters in the world. I think India is very well placed here and as a general perception also because we do a lot of switch gears in over 35, 40 countries, we are doing switch gears also. So I think the Indian perception is very good and the irregular good customer is ready to pay a premium to any, any Indian manufacturer as compared to China.
So this is just my personal, this thing. But I think we would have a very good chance if we, the way we would penetrate into the utilities even internationally and, and people will definitely prefer.
Viraj Mahadevia
Understood. One last question, Gautam. Given that now hopefully the worst is behind us from a smart metering perspective and you know, steady tenders over the next two, three years and the CNI business is picking up, as you mentioned, could we look to a 20% growth in top line over FY27 from FY26? Yes, I think 25% is achievable.
Gautam Seth
Yes, I think it is achievable. And I think internally when probably you know, by, by next month when we are finalizing our, let’s say budget for the next year internally with our teams and other things, I think that is something that is should be minimum required if you don’t see any, or, or just, or rather I would put it that way that keeping few challenges which would anyway come in the business, I think those types of growths are achievable, no doubt in that. I think our consumer is set for a good growth. There’s no doubt in that.
Even metering we have the orders, the, the requirements are there. The policy is also very clear now. So that again you, you know, should see a growth. So I think what you, what you are saying, I think that looks definitely achievable.
Viraj Mahadevia
Great, thank you. All the very best.
Gautam Seth
Yeah, thank you.
Shankhini Saha
Thanks for your follow up. Thanks for answering. Gautam. What we’ll do is we’ll take some questions now that was sent in prior to the call. So the first question is about the recent developments in the FTA. As we saw some European FTAs come through. Can you tell us how this affects our export opportunity for both our business segments on the metering front as well as the CNI segment?
Gautam Seth
Yeah, so, so I would say two FTAs, one with the UK which is I, I guess already signed and the Europe one which is announced and I guess it will be also formalized and notified. So I think we stand as HPL Electric, we stand to gain from both these FDAs in a big way. Now these as, as we read from the news that the import duties of engineering products into Europe would get reduced. So if you see India is basically on the IEC standards which are typically, you know, the electrical system is, you know, compatible with the UK and the European standards.
So, so we stand a good chance as a company to supply into Europe, supply into UK into those markets. And these countries typically have a lot of their manufacturing already shifted out of Europe. So typically it’s gone major to China. And now with this fta, I think India as a country and the engineering companies here have a good chance to become a manufacturing base for the European customers and big companies. So I think definitely we are looking at it and our focus in going forward. In Hanover, as I said, we are participating in these fears.
So I think those, our focus is definitely to now penetrate into the market in a bigger way. And I think the fda, the, the difference in the duties should make us competitive vis a vis the other countries like China. And if you look at technology wise, we are up there already. Our certification and technologies are there, but only whatever, you know, if price was a major factor which was deterring the European customer or people in, let’s say the customers in UK from taking Indian products, I think that should give us a good advantage.
Shankhini Saha
Thanks Gautam. The next written in question that we’ll take is regarding our go to market strategy for the CNI segment. Can you give us more detail on what brand building initiatives and what initiatives we’re putting in place to build our channel network in the domestic market, which is the real push for the growth in the CNI segment?
Gautam Seth
Yeah, so, so we, you know, like last three quarters have been good. Of course our efforts have been going on well before but now the results are on board, you know, and I think this gives us some encouragement to, you know, probably to our teams also to look at this business in a bigger way. So although I, I don’t give too much of a guidance many times, but I think the CNI next year we should be looking at probably crossing let’s say 1000 crores in a way or coming close to that. So in a way I do foresee that even the next year should be a good year for CNI and with us reaching those levels that would be a minimum level to really grow further from there.
So also our strategy has been focused on two, three major issues. We have really strengthened our supply chain in a big way. We believe that today putting the products close to the consumer or in an effective way because at peak time we had almost 30 warehouses in the country. Today we operate only with six master warehouses. And I think our supply chain through the 900 channel partners and the retailers today much better off. So I think there has been a lot of work which has been, which has gone on to that. So we are really progressing on that.
There has been a lot of products, new products have come out from our R and D which have been, which we say are creating certain differentiation with the competition, you know, and the acceptability with our customers or with our dealers, you know, or with the channel partners is definitely there. So I think that is going to be a big differentiation factor which is going to really, you know, you know, make sure that the CNI products are coming out like that. Our advertising has seen a stronger push mainly in the digital segment where we are, we have really, you know, probably made a 2x or 3x the spend what we were doing on the digital marketing on all the social media and other things.
Our BTL has been very strong now. So although we are not spending big large money onto the television or the more on the ATL part, but the BTL on point of sale and other parts have been pretty strong and they have been consistent. So I think with certain strategies which are, you know, giving us immediate ROIs, keeping the budget in mind, we are doing that. So. So a lot of these actions have happened which have given us, we are on the way of, you know, a lot of digital transformation where we are looking to launch two, three new apps in the next coming months which would connect all our dealers, all our retailers and a lot of our electricians, including the loyalty programs of electricians through the app, you know, and everything going digitally through the QR codes.
So that is something which again we are, we are in process of doing. So I think there are a couple of these smart moves which we have, we are undertaking which will give us positive results going forward. Now the moment the way the sales are going up, it’s my sense that maybe by end of, on the later part of next year, once we have much more sizable sales coming up and almost a thousand crores of revenue coming from CNI that will give us a minimum level to do much more brand building activities even on the ATL side where we can reach out to our end consumer in a bigger way, make HPL known as a household name.
So I think that will happen naturally and progressively as we go forward. But right now we are in a direction and we feel encouraged by the results what are coming. Of course market is competitive. There are, you know, it’s an open market competition is there. But I think overall we’ve got certain things right for sure and I’m sure we learn and see that we keep up the, you know, the growth coming up.
Shankhini Saha
Thanks Gautam. Just a quick follow up on this. If you look at geographically, if you look at the CNI segment, is there room for more penetration when it comes to building the channel network?
Gautam Seth
Yes, I think if you see like we are present in all the states but still the penetration into Tier 2 and Tier 3, I, I think there’s a huge, you know, gap which probably we need to do that and not only now. I think even if we double up from here we will still see gaps happening in that. So there is definitely a room for us to grow. So, so even if the, if you look at the industry figures, even if I see the industry figures as flat, I, I see a huge opportunity for HPL Electric to grow in these segments.
So we are, although sometimes if the industry is growing so it, it does help us. But right now, the way it is, at least in the next five quarters I am seeing a, a good Runway for growth for CNI in a good way and I’m sure we’ll be putting the next level of strategies thereafter for future growth. So that is going to happen even right now as we are closing the year we in the next three to four months covering let’s say the Feb. March and Jan. Your the April and May. We do see a lot of new appointments of channel partners.
Our teams have identified a lot of areas where HPL would require a strong distributor. So a lot of internal targets are there and monitorings are there. So definitely I think we should be able to. There is a good gap which we are ready to fill up.
Shankhini Saha
Thank you Gautam. That was really insightful. We have some more written questions but paucity of time. We’ll get back to you with some written answers and those in the question queue can also write to us and we’ll be very glad to get your questions answered to your satisfaction. So before I hand over to Gautam for closing remarks, I’d also like to mention that we are planning some investor and analyst events for HPL in the coming month. So invites for that should go out shortly within a week or so and NEA participants here you can also write to us on the email ID on the last slide of the investor deck and we’ll be happy to include you in the registration process.
So on that note, I’ll hand over to you Gautam to make some closing remarks for our earnings webinar for today. Over to you.
Gautam Seth
Thank you. So in closing, I would say HPL is entering the next phase of growth journey with a position of clear strength. We now have two scalable businesses which are smart metering and the consumer and industrial. And both are meaningfully growing with meaningful drivers of growth in both of them. Our focus remains on strengthening the product platforms through R and D, expanding our distribution and channel network and maintaining discipline in the capital employed. Now with these operating momentums and multiple growth opportunities, we are well positioned to deliver long term value for our stakeholders. So thank you for being part of our journey here and thank you and have a good evening ahead.
Thank you.
Shankhini Saha
Thanks to all our participants today and thanks Gautam on behalf of hpl. It’s been a pleasure to host you all today. Happy to receive any more requests for data or any other questions and we’ll make sure to get them answered. So. So thank you for being with us. And you may now disconnect your lines. Cheers everybody. Have a good evening.