HPL Electric & Power Limited (HPL) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, very good afternoon to you all, and welcome to HPL Electric & Power Limited's Q3 and 9 Months Earnings Webinar produced by ElevEase. So I'm Shankhini. I'm the Director of Investor Relations here at Dickenson, and I'll be moderating our call today. Joining us from the HPL management team will be Mr. Gautam Seth. He's 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.

Yes. Thank you, Shankhini. Good afternoon, everyone, and thank you for joining us. Before getting into the financials, I want to briefly share how the last 9 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 a strong B2B order pipeline. At the same time, we have worked steadily to scale our branded Consumer and Industrial businesses. Alongside this, we have 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 INR 475 crores. EBITDA increased by about 29% to nearly INR 72 crores. Steady revenue growth, combined with better margins is strengthening our earnings profile quarter after quarter. Let me now walk you through our 2 key business verticals. Smart metering continues to be our long-term growth driver. We currently have an order book of over INR 3,000 crores, which gives us clear multiyear 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 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 2 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. Switchgears grew by over 33% year-on-year in Q3 to roughly INR 68 crores and by 25% in the first 9 months to INR 233 crores. Wire and Cables recorded strong growth of nearly 60% year-on-year in Q3, while Lighting and Electronics returned 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&D and product engineering while maintaining discipline on capital allocation. In line with this, we have recently launched Neeram Pulse 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 road map, 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 that we believe can more than double over the next 3 to 4 years. With this, we will open the floor for questions. So over to you, Shankhini.

[Operator Instructions] Our first question will be from the line of [ Sahil Pataney ].

So a couple of questions, Gautam. So our 9-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 2 or 3 years, what is the steady breakup you see between these 2 verticals? Would it still be between 45% for consumer industrials, 55% smart meters? Or how do you see that?

Yes. So fortunately now, we are seeing growth in both the segments. And of course, the Consumer and Industrial in the 9 months and almost every quarter has seen a very healthy growth -- year-on-year growth. Metering is, as we said in my opening remarks, as I said, 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 2-3 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 the 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 3-4 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 to grow. But broadly, to answer your question, I would say maybe 55% to 45% could be a ratio which will kind of remain.

Got it. Got it. And my second question is around the water smart meters. Congratulations on that launch earlier in the year.

Thank you.

So 3 parts to that. So one is what is the TAM for smart water meters? What is the TAM for that? How much revenue contribution do you see from this vertical, let's say, over the next 2-3 years? And is there an export opportunity as well? Or would you be looking for just -- to just cater the domestic market?

Yes. So if you look at the -- we have -- of course, we've done our work, and we do see a huge opportunity going forward in the smart water meters. Now if you look at globally also, I'll just put it in a perspective and then probably we can -- I'll answer specifically the 3 questions. If you look at the global market in the smart -- like any metering company globally, the big companies, so they are into the electricity, they are into the water, and the gas meters. So with HPL Electric also, 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 -- there are a couple of figures available on various -- from various agencies. But nevertheless, the market is huge. The consumer base is huge. The government has been talking about -- off and on about what can be done in this. And 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 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 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 kind of resources already the company has, the kind of manpower, the strengths what we have already in our R&D. So the time taken to launch this will be far lesser. And I think the clarity and execution what we see generally in the government. So once the policies are fully in frame, once they are there. So I would say the implementations would be 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 so I think it's a very big plus for HPL because like we have been in electricity meters, so we will be present and, hopefully, we should be dominating in future in this segment as well. But exact revenues, what will happen? I think it's too early for us to say that. But as we go forward, I'm sure we'll keep you updated on how we can exploit this.

Okay. And is there an export opportunity as well with this?

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 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.

Our next line of questions will be from the line of Viraj Mahadevia.

Very quickly Gautam, I wanted to check, 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 secular trend in smart metering deliveries over the next 2 to 3 years?

Yes. 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 challenges from 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 now, the policy is clear. I think if you look at the government data, the tenders, a lot has been already given out to the AMISP, even the last bit of tenders are all on the table, getting -- waiting to be given out to the AMISPs. So I think that -- those challenges are not there today. What challenges in the last, let's say, 9 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 challenges 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 3 to 4 states are doing very high level of -- or a good level of implementations. And 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 people involved, the end consumer, the utilities. So certain things will always remain. But overall, I think the progress is much better than what it was like this. And for us, as I said earlier also, 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 are moving into a good phase where I think in the next 2 to 3 years, the bulk of the implementation should be taken care.

So does that mean you expect say, let's say, INR 5 crores to INR 6 crores smart meter execution per annum for the next 2 to 3 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 end?

Yes. So if you look at the -- purely going by the run rate of the government data and the kind of projections, so I think that seems to be a possibility of having at least INR 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 AMISPs. So that is better. So we are -- as a company or as an industry, it's not only 1 or 2 AMISPs, which are actually performing. It's multiple AMISPs and multiple circles where the work is going on. So I think, yes, that should be a possibility. And we ourselves should see a steady growth in revenue and our dispatches should improve.

Just last question. Are you seeing a pressure on your gross margins given copper prices? Because Q1 had very good gross margins of about 38%. And 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 copper prices moved up, so there's a squeeze and will you be able to pass on these higher copper prices in future contracts?

So I'll just -- so if you look at the copper or other metals, 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 prices get passed on. So any increase 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 2 to 3 weeks to pass on the cost to the consumer. But over the last couple of months, let's say, if you look at the 9 months, there might have been at least 6 to 7 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 an increase today, so maybe it may take 2-3 weeks for those prices to come to that. So in a way, that does put certain effect -- adverse effect on the margins, but it gets passed on. When you look at switchgears, because, again, lighting is not so much impacted by that. But if you look at switchgears, yes, certain part of switchgears has copper playing a big role because copper and silver, both -- they are the current carrying parts. And so there, the passing on gets -- it cannot be done on a monthly basis. Generally, the industry is doing it after 3 months, 6 months, depending on that. So there, of course, we -- yes, we have seen certain pressures on the margins. But eventually, the cost gets passed on.

Our next line of questions will be from the line of Rishabh Hingar.

Gautam, first of all, congratulations for delivering robust results. Now I have a couple of questions for you primarily on the strategy part. So one is, are we 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 [ DISCOM ]. 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 the future to venture into these type of segment? Second, my question is regarding the next-generation product line. So our competitors such as Genus Power have got solar inverter, solar, they're working on solar storage solutions or on the Consumer Industrial sides, solar panels. So there are a lot of next-generation product lines which our competitors are working on. So has HPL got any such plans to augment these type of product lines?

Yes. So Rishabh, I'll -- so if you look at our main -- major portfolio, whether we look at the energy meters, of course, in metering, we have been -- all this goes into the distribution segment, obviously, through the utilities. If you look at the switchgear part and the wire and cable, we have 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 an 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 -- whether it's the panels or what you see in the offices, downlighters, everything we make like this. Similarly, in the wire cable, we have extended. So that has been 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 higher kind of cables going up to HD and then EHV. So it's a progression which typically for any good company would take 3 to 5 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 3 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 HT cable. So one -- so it's a -- I would say it's a progression. We are looking at it very actively. And as we -- 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, 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 DC 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. We -- in fact, last 4-5 years, we already have a complete solar division, and we are, again, growing into that. Now if you look at HPL, with over 180 engineers in R&D and which covers all the things, not only meters, but also switchgear, wire and cable, lighting, and then into a lot of common technologies like the electronics or the communication and other things. So we are continuously developing a lot of new age products in each of our product segments, which address 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 3 major telecom players, whether it is Jio or you have Vodafone or you have Airtel. So a lot of new age opportunities, what we see. We are working on that. And obviously, 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 come back to you.

[Operator Instructions] So our next question will be from the line of Pranjal Mukhija.

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?

No. So this is regarding the metering we are talking about?

Right. For the whole AMI piece or maybe the whole energy transition piece also, maybe grid solutions, like wherever you guys are working, like I would love to understand in greater detail.

No. So I had offered you last time also that I can arrange a separate call, but we -- apart from the meter supplies what we are doing, the -- both the -- we are working on both the billing software as well as the head-end system, okay? And so we've been working on that because we are also -- at least with 2 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 AMISPs wherever required, yes. 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 Shankhini and we can -- I can connect you in the next 2 days with our team. So you could understand...

Really appreciate it. Actually, we tried reaching out last time as well, but I didn't get any reply. So I hope like this is fruitful.

Okay. So we'll do that. Yes.

Pranjal, any more questions?

No, that's it.

So our next question will be from the line of [ Kunal Dubey ].

Congratulations for the good set of numbers. My question -- I joined the call a little late. I have a couple of questions for you. First, in the last call, you had mentioned that we would be in the revenue -- our total revenue number is currently INR 1,291 crores in 9 months. And you had mentioned that we would be in the pin code of around INR 1,900 crores. So is that number still on? Is my first question to you that will we be able to meet that INR 2,000 crores, INR 1,900 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?

Yes. 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 schedules what we have from the various AMISPs, I think we should do a fairly good turnover for the smart metering. And the Consumer and Industrial also is set for another good quarter and a good growth. So even looking at it sequentially or year-on-year, we do expect a good quarter. Now we have done about INR 470 crores in the Q3. So definitely, we -- the figure you said, we are looking to get there. But again, there could be 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 if we are not reaching there, but we should be getting somewhere 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. Now looking at -- actually, I talked about in the initial on the water meter part. So we have launched the meters. Of course, since the government or the [ GEL ] boards and others are the primary consumers of that. So our -- the products would be going for their testing, their approvals. So that is a process which that would happen. 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 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.

Gautam, just a follow-up question to you. If I may ask you or if you can give me an answer, we did last year around INR 500 crores in Q4. We would be in that same line, if you could answer that question. If it could match Q4 of FY '25 around that...

I think we should see a growth from there. Growth probably I cannot say that. But yes, I think we are looking at it. Internally, we do have strong targets. Our teams are working day and night to make sure that the best figures are there. But, yes, I think we should have a growth from there.

Our next line of questions will be from Chandresh Malpani.

Sir, first question is on the -- again, the order book itself and the overall broader perspective when we see smart metering about INR 15 crores meters are awarded. So 2 questions here again, sir. I've asked in the past as well that out of INR 15 crores, your sense, how much is passed on to the OEMs? And second, sir, we have not seen any meaningful tendering happening in the last 8 to 10 months from the utilities to the AMISP itself, where we see Tamil Nadu, which is a big ticket 3 crore odd meters, but the orders have not been finalized. So sir, your overall sense on the tendering thing because our order book has also remained in the range of INR 2,500 crores to INR 3,000-odd crores. So our incremental revenue depends to a large extent to this new orders that will come in. So your overall thought process here, sir?

Yes. So Chandresh, I don't know from where you picked up the INR 15 crore point, but I think the government data, if you look at it, they are talking about anywhere, I think whether it's INR 15 crores or INR 18 crores, more or less the INR 18 crore business out of the INR 22.5 crores sanctioned meters. I think approximately INR 18 crores have been either decided on the AMISPs or they are already -- the tenders have been done and L1 is probably identified. Now -- so let's take that as a figure. So because we both probably will go by the figures which are there in the public domain and by the government. So out of those, just my sense is that right now, if, let's say, 5 crores 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 crores 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 -- 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 company, listed company, if they are to give out their order book details, it is no more -- one has to give out 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 of 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 1.5 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 AMISPs 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 even my take about 2-3 years back, I've said it in one of the calls that you will not -- continuously, you will see more and more recurring orders, the big bang orders will not be there to the meter manufacturers, but they will 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 levels also in a couple of crores definitely. But there are more repeat orders. So you don't find an order of, let's say, 10 lakh, 15 lakh meters come in together, maybe 1 lakh, 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 genuine meter manufacturers like us. So I think that is where we stand to gain here. So the overall industry scenario is very good. I think the industry is on track to maybe in the next -- maybe instead of 3, it may take 4 years or 5 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. Yes.

Got it, sir. And sir, second question is on the -- when we see the data of government. So is HPL also executing a project as an AMISP for Punjab?

No. Right now, with 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, supplying to the AMISP, and they are doing in turn 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 1 or 2 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 a lot of the complete, let's say, the value-added services along with that.

We now have some time for follow-ups. We can take 1 or 2 maybe before we get into the written questions. So we'll start with the first follow-up from the line of Viraj Mahadevia.

I wanted to check, has there been any progress in terms of smart metering orders and qualifications with overseas clients as another growth driver?

Yes. Like last time also, I said we have a dedicated team now. So we have -- of course, a lot of tenders are available. We have recently looked at 2 countries where we can. But 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 -- but in the long-term, I see that as a big business happening. So we are -- like our smart metering solutions, like we have an upcoming phase 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 gained from the Indian market in the last 2-3 years, I think that will 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 another 12 months from here as we get all the certifications in place. But eventually, if we are able to crack even 3, 4 countries, the volumes can be big and the values are far good. The realizations are pretty good and especially if you look at the European or the advanced Middle East markets, the values can be very good. Yes. The margins also can be good. So we are exploring that. And definitely, there's a dedicated work happening in that direction.

And how are we placed against the Chinese in some of these markets?

I would say in terms of...

[Indiscernible] perception, et cetera?

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 2 decades, typically had one specification, which they would use it for 5 years. And that was, let's say, like a global specification formed by the central Chinese authorities, and they had 2, 3 utilities run the tenders and they would do that. No changes happening in the specifications for a fixed period, let's say, about 4-5 years, but the volumes were high. So typically, the specifications were frozen, but the quantities were large. So they went into very good smart way of manufacturing those because the quantities were large and the specs were fixed. India, on the other hand, if you see in the last 2 decades, 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 2 or 3 tenders would up the specification each time. So that put a lot of pressure on the R&D for the meter manufacturers and companies like us and maybe 1, 2 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 switchgears in over 35, 40 countries, we are doing switchgears also. So I think the Indian perception is very good and the regular good customer is ready to pay a premium to any Indian manufacturer as compared to China. So this is just my personal thing. But I think we would have a very good chance if we -- the way we would penetrate into the utilities even internationally here, and people will definitely prefer.

Understood. One last question, Gautam. Given that now, hopefully, the worst is behind us from a smart metering perspective and steady tenders over the next 2, 3 years and the C&I business is picking up, as you mentioned. Could we look to a 20% growth in top line over FY '27 from FY '26?

Yes. I think...

Would you say that 25% is achievable?

Yes. I think it is achievable. And I think internally, when -- probably 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 we don't see any -- or just -- or rather, I would put it that way that keeping a few challenges, which would anyway come in the business, I think those types of growth 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 requirements are there. The policy is also very clear now. So that, again, you should see a growth. So I think what you are saying, I think that looks definitely achievable.

What we'll do is we'll take written questions now that were sent in prior to the call. So the first question is about the recent developments in the FTAs. 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 C&I segment?

Yes. So I would say 2 FTAs, one with the U.K., which is, I guess, already signed and the Europe one, which was 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 FTAs in a big way. Now these -- 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 IC standards, which are typically, the electrical system is compatible with the U.K. and the European standards. So we stand a good chance as a company to supply into Europe, supply into U.K., 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 and, as I said, we are participating in these [ fields ]. So I think those -- our focus is definitely to now penetrate into the market in a bigger way here. And I think the FTA, 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 -- if price was a major factor, which was deterring the European customer or people in, let's say, the customers in U.K. from taking Indian products, I think that should give us a good advantage.

The next written question that we'll take is regarding our go-to-market strategy for the C&I 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 C&I segment?

Yes. So we -- like last 3 quarters have been good. Of course, our efforts have been going on well before, but now the results are on board. And I think this gives us some encouragement to probably to our teams also to look at this business in a bigger way. So although I don't give too much of a guidance many times, but I think the C&I next year, we should be looking at probably crossing, let's say, INR 1,000 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 C&I. 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 2, 3 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 6 master warehouses. And I think our supply chain through the 900 channel partners and the retailers, it would be 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&D, which have been -- which we say are creating certain differentiation with the competition. And the acceptability with our customers or with our dealers, with the channel partners is definitely there. So I think that is going to be a big differentiation factor, which is going to really make sure that the C&I products are coming out like that. Our advertising has seen a stronger push mainly in the digital segment where we are -- we have really probably made it 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 giving us immediate ROIs, keeping the budget in mind, we are doing that. So a lot of these actions have happened, which have given us. We are on the way of a lot of digital transformation where we are looking to launch 2, 3 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 and everything going digitally through the QR codes. So that is something which, again, 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 INR 1,000 crores of revenue coming from C&I, that would 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 -- 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'll learn and see that we keep up the growth coming up.

Just a quick follow-up on this. If you look at geographically, if you look at the C&I segment, is there room for more penetration when it comes to building the channel network?

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 think there's a huge gap, which probably we need to rule 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 even if the -- if you look at the industry figures, even if I see the industry figures as flat, 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 does help us. But right now, the way it is, at least in the next 5 quarters, I'm seeing a good runway for growth for C&I 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 3 to 4 months, covering, let's say, the Feb, March, and Jan, 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 monitoring are there. So definitely, I think we should be able to -- there is a good gap in which we are ready to fill up.

Thank you, Gautam. That was really insightful. We have some more written questions, but due to paucity of time, we'll get back to you with some written answers. And those in the questions 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 any participants here, you can also write to us on the e-mail 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.

Yes. 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 2 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&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.

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 thank you for being with us, and you may now disconnect your lines. Cheers, everybody. Have a good evening.