Buy HPL Electric and Power; target of Rs 710: Anand Rathi

Anand Rathi's research report on HPL Electric and Power

The company reported revenue of ₹4,925 Million for the quarter ended March 2025, marking an 16.1% year-on-year increase from ₹4,241 Million in the same quarter last year, and a growth of 25.5% rise on a sequential basis. For the full fiscal year FY25, revenue stood at ₹17,002 Million reflecting a 16.4% year-over-year growth. The company reported EBITDA of ₹557 Million and Profit After Tax (PAT) of ₹181 Million for the March 2025 quarter. While EBITDA grew by 12.1% yearon-year, PAT grew by 51.4% over the same period. For the full fiscal year FY25, EBITDA stood at ₹2,546 Million a growth of 32.5% compared to previous year, and PAT came in at ₹957 Million, a growth of 115.5% year-over-year basis. The company reported an EBITDA margin (EBIDTAM) of 11.3% and a profit after tax margin (PATM) of 3.7% in Q4 FY25, down from 11.7% whereas PATM was up from 2.8% respectively in the same quarter last year. On a full-year basis, FY25 EBIDTAM was 15.0% and PATM stood at 5.6%. This reflects a growth in EBIDTAM from 13.2% in FY24, while PATM improved from 3.0% in the previous year In FY25, Metering, Systems & Services reported a robust growth of 26.16%, contributing ₹10,756.1 million to overall revenues. The Cables segment grew by 23.6% year-on-year, while the Domestic Switchgear business registered a 16% YoY increase. Segment-wise, in FY25, the EBIT margin for Metering, Systems & Services improved to 17.0%, up from 14.6% in FY24. Meanwhile, the EBIT margin for the Consumer, Industrial & Services segment remained relatively stable at 11.5%, compared to 11.4% in FY24. Metering, Systems & Services contributed 63% of the total revenue in FY25, with the remaining 37% coming from the Consumer, Industrial & Services segment. The company maintains a strong and stable order book and is executing existing orders on a fast-track basis to ensure smooth and efficient delivery across the current pipeline. They have an order book of ₹35,000 Million which ensures revenue visibility for the short and medium term. Metering, Systems & Services accounts for approximately 99% of the order book, with a strong and healthy pipeline of metering tender enquiries. . Meanwhile, the ‘5G’ sector continuesto expand, driven by advancementsin digitalization and connectivity infrastructure.

Outlook

The company is on a robust growth trajectory and remains confident in its ability to drive sustainable growth going forward, supported by its strong R&D capabilities. The 'Metering & Systems' segment is expected to be the key growth driver, with strong traction and an efficient execution cycle. Leveraging its competitive strengths, the company is well-positioned to capitalize on emerging opportunities in the smart meter space. We maintain our BUY rating on the stock with an unchanged target price of ₹710 per share.

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HPL Electric and Power - 29052025 - anand