HPL Electric meters & lighting business drives growth by 5 per cent in Q2 FY20
HPL Electric and Power Ltd, an electric equipment manufacturing company, has recently announced their financial results for the quarter ended September 30, 2019.
HPL Electric and Power Ltd, an electric equipment manufacturing company, has recently announced their financial results for the quarter ended September 30, 2019.Gautam Seth, Joint Managing Director, HPL Electric, said, “As per our guidance given post the Q1FY20 results, our metering and lighting segments posted strong double-digit growth on a sequential basis. Metering business grew by 22 per cent QoQ to Rs 165.3 crore and lighting business grew by 48 per cent QoQ to Rs 51.5 crore. Our focus on improving operating profitability continued as our EBITDA margins expanded by 123 bps to 12.9 per cent in Q2 FY20 led by increase in share of higher margin metering business, and efficient cost control.
On the product innovation front, the company is continuously looking ahead to launch innovative products in various categories. HPL’s association with the Haryana Steelers Pro Kabaddi team as its official LED lighting partner is yielding positive results in the lighting trade segment. Lighting business witnessed robust growth with revenues growing by 48 per cent QoQ and 12 per cent YoY. Growth was majorly led by network expansion, and offering a wider range of products to consumers.
Going forward, the company expects segments like metering, lighting, and wires & cables to see strong growth on a year-on-year basis in Q3FY20. Metering business continued its growth momentum in the second quarter as revenues grew by 22 per cent QoQ and 3 per cent YoY driven by timely execution of orders. Seth said, “In the meters business, healthy order book combined with increased enquiries and tenders provides good revenue visibility for the rest of this year. Further, favorable policy measures like the Government’s plan to set up a Rs 25,000 crore fund to revive stalled housing projects and the increased government spending is expected to further boost demand for HPL’s products especially for domestic switchgears.”
Contribution of the switchgear segment remained muted due to lower demand in real estate, industrial and infrastructure markets
Q2 FY20 EBITDA margins expanded by 123 bps to 12.9 per cent driven by increased revenue contribution from higher margin metering business (61 per cent in Q2FY20 Vs 56 per cent in Q2FY19) and efficient cost management.Consolidated current order book stands at Rs 390.3 crore (Net of GST) while metering orders of Rs 361.4 crore, switchgear orders of Rs 19.6 crore, lighting orders of Rs 8.2 crore, wires & cables orders of 1.1 croresEnquiry base for Metering tenders are at a healthy level. Tenders amounting to Rs 2,000 crore have been floated or expected to be floated in the near-term. This provides good visibility and positive outlook for the coming quarters for the company.