HPL Electric Q2 EBITDA rises by 5 pc due to healthy growth in meters and lighting business

HPL Electric and Power Ltd said on Friday its earnings before interest, tax, depreciation and amortisation (EBITDA) margins during the second fiscal quarter expanded by 123 basis points to 12.9 per cent driven by increased revenue contribution from higher-margin metering business and efficient cost management.

However, overall net revenues dropped by 5 per cent to Rs 272 crore in Q2 FY20 as against Rs 286.5 crore in Q2 FY19. Profit after tax too declined by 4 per cent to Rs 7.5 crore from Rs 7.8 crore in the same period.

"Our metering and lighting segments posted strong double-digit growth on a sequential basis. The metering business grew by 22 per cent quarter-on-quarter to Rs 165 crore and lighting business grew by 48 per cent quarter-on-quarter to Rs 51.5 crore," said Joint Managing Director Gautam Seth.

The metering business continued its growth momentum driven by timely execution of orders. On the other hand, growth in lighting business was majorly led by network expansion and offering a wider range of products to consumers.

Seth said the contribution of switchgear segment remained muted due to lower demand in real estate, industrial and infrastructure markets.

"Favourable policy measures like the government's plan to set up a Rs 25,000 crore fund to revive stalled housing projects and increased spending is expected to further boost demand for HPL's products especially for domestic switchgears," he said in a statement.

The consolidated order book stands at Rs 390 crore with metering orders of Rs 361 crore, switchgear orders of Rs 20 crore, lighting orders of Rs 8 crore and wires and cables orders of Rs 1 crore.

Tenders amounting to Rs 2,000 crore (about 1.6 crore meters) have been floated or expected to be floated in the near-term. "This provides good visibility and positive outlook for the coming quarters," said Seth.

HPL has the largest market share for electricity energy meters in India and the fifth largest market share for LED lamps.