HPL Electric & Power shares jumped 19% to hit a record high after securing a major smart meter order. Known for its reliable meter supplies, the company is well-placed in the expanding smart meter market.
HPL Electric & Power, a leading electrical equipment manufacturer in India, witnessed a 19% surge in its shares, reaching a new peak of ₹555 each. This increase came after the company announced a substantial ₹2,100.71 crore order for smart meters from a major client, as detailed in its recent exchange filing.
The company’s ‘Metering & Systems’ division has been gaining significant momentum. With over two decades of successful meter supply experience, HPL is strongly positioned to benefit from the expanding smart meter market.
Founded in 1992, HPL Electric & Power is a leading Indian electrical equipment manufacturer, dominating two key sectors: metering and systems, and consumer and electrical. As per the company’s latest annual report, HPL commands a 20% share of the domestic meters market, with an annual production capacity of 1.1 crore meters.
Market Performance and Stock Surge of HPL Electric & Power Shares
- Impressive Growth Trajectory: HPL shares surged 225% over the past year and 866% over five years, reflecting robust investor confidence.
- Year-to-Date Performance: A notable increase of 120.1% year-to-date, outperforming broader market indices.
- Relative Strength Index (RSI): Current RSI at 72.07 suggests the stock is overbought, indicating strong bullish sentiment.
Analyst Recommendations and Investor Sentiment
- Analyst Coverage and Ratings: Bloomberg data shows one analyst recommends a ‘buy’ rating, highlighting positive market sentiment.
- Investor Reaction to Performance: Investor response has been positive, with shares trading significantly higher despite broader market fluctuations.
Factors Driving Stock Growth
- Business Expansion and Sector Dominance: Dominance in metering and systems, coupled with expansion in smart metering technology, driving revenue growth.
- Strategic Initiatives and Market Positioning: Successful execution of contracts with AMISPs and alignment with national energy metering initiatives boosting revenue streams.
- International Expansion: Global presence across 42 countries contributing to revenue diversification and market expansion.
Financial Performance and Future Outlook
- Revenue and Profitability Growth: FY24 witnessed a significant increase in operational revenue and profitability, with PAT rising by 44.22%.
- Projected Growth: Forecasted growth in switchgear and metering sectors expected to further bolster revenue, supported by favorable policy measures.
The metering & systems division focuses on institutional and B2B markets, producing both smart and traditional meters. In the consumer & electrical segment, primarily B2C, HPL operates in switchgear, LED lighting, and wires & cables sub-segments.
With a global presence spanning 42 countries, HPL continues to experience strong export growth, aiming to expand its international footprint further. The company’s LV switchgear testing lab in Jabli, Himachal Pradesh, holds IECEE certification for independent MCB and RCCB testing, along with KEMA and CB certification from DEKRA, Netherlands.
HPL’s shares surged 225% over the past year and rose nearly 866% over the last five years. In FY24, the company achieved significant revenue and profitability growth, driven by robust sales in metering, systems & services, and advancements in smart metering technology.
This growth was driven by rising orders for traditional meters and major contracts from leading Advanced Metering Infrastructure Service Providers (AMISPs), aligned with India’s national metering initiative to upgrade energy metering infrastructure.
The expanding order backlog in this sector is expected to bolster future revenue streams and extend the company’s market presence nationwide. FY24 saw a 15.74% increase in operational revenue and a notable profitability improvement, with PAT rising by 44.22% to ₹43.63 crore.
Furthermore, favorable policy measures and a promising industry outlook are anticipated to stimulate demand for HPL’s products, particularly switchgear and meters, which are forecasted to grow at a 15% CAGR from 2019 to 2023, enhancing HPL’s long-term prospects.
HPL Electric and Power shares surged up to 18.41% to Rs 552.30 on the NSE and were trading 16.84% higher at Rs 510, contrasting with the Nifty’s 0.29% decline by 11:05 a.m.
Over the past 12 months, the share price has climbed 172.60%, with a year-to-date increase of 120.1%. The relative strength index stood at 72.07, indicating the stock’s overbought status. According to Bloomberg data, one analyst covering the company recommends a ‘buy’ rating on the stock.
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