HPL Electric & Power Limited has informed the Exchange regarding Analysts/Institutional Investor Meet/Con. Call Updates- TRANSCRIPT OF CONFERENCE CALL
26th August, 2019
The Manager, Listing Department, National Stock Exchange of India Ltd. “Exchange Plaza”, C-1, Block G, Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051 Symbol: HPL
BSE Limited 25th Floor, New Trading Ring, Rotunda Building, Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai – 400 001 Scrip Code: 540136
Subject: Transcript of Conference Call with the Investors/Analysts
Dear Sir
This is with reference to the intimation dated 6th August, 2019 made by the company about the Conference Call scheduled for Investors/Analysts on Tuesday, 13th August, 2019. A copy of Transcript of the conference call held with the Investors/Analysts is enclosed herewith and the same is also available on the Company’s website i.e. www.hplindia.com.
Kindly take the same on record.
Thanking You
Yours Faithfully For HPL ELECTRIC & POWER LIMITED
Vivek Kumar Company Secretary
Encl: As above
“HPL Electric & Power Limited Q1 FY2020 Earnings Conference Call”
August 13, 2019
ANALYST:
MR. HARSHIT KAPADIA - ELARA SECURITIES PRIVATE LIMITED
MANAGEMENT: MR. GAUTAM SETH - JOINT MANAGING DIRECTOR
- HPL ELECTRIC AND POWER LIMITED MR. RISHI SETH - JOINT MANAGING DIRECTOR- HPL ELECTRIC AND POWER LIMITED MR. V.R. GUPTA - HPL ELECTRIC AND POWER LIMITED
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HPL Electric & Power Limited August 13, 2019
Moderator:
Ladies and gentlemen good day and welcome to the HPL Electric & Power Private Limited
Q1 FY2020 Earnings Conference call hosted by Elara Securities Private Limited. As a
reminder, all participant lines will be in the listen-only mode and there will be an
opportunity for you to ask questions after the presentation concludes. Should you need
assistance during the conference call, please signal an operator by pressing “*” then “0” on
your touchtone phone. I now hand the conference over to Mr. Harshit Kapadia from Elara
Securities Private Limited. Thank you and over to you Sir!
Harshit Kapadia:
Thank you Bikram. Good evening everyone. On behalf of Elara Securities, we welcome
you all for the Q1 FY2020 and FY2020 conference call of HPL Electric & Power Limited. I
take this opportunity to welcome the management of HPL Electric & Power represented by
Mr. Gautam Seth, Joint Managing Director. We have Mr. Rishi Seth, Joint Managing
Director and Mr. V.R. Gupta. We will begin the call with a brief overview by the
management followed by Q&A session. I will now handover the call to Mr. Gautam Seth
for his opening remarks. Over to you Sir!
Gautam Seth:
Thank you Harshit. Good evening everyone and a very warm welcome to all of you present
on the call to discuss our financial results for the first quarter of FY2020. Our first quarter
performance was marked by a healthy growth in EBITDA which came in at Rs. 30.2 Crores
up by 11% on a year-on year basis. Improvement in EBITDA margins to 12.2% versus
10.5% reported last year was mainly due to higher contribution of metering and switchgear
segments in our revenue mix for the current quarter.
In our segment wise performance, the metering business which is our largest segment
continued to post growth with revenues growing by 10% year-on year to reach Rs.135
Crores and EBIT growing by 15% to Rs. 19 Crores.
Our switchgear business reported steady performance at both the revenue and EBIT level.
Our lighting and cable segment reported a muted performance in the current quarter
primarily due to weak industry demand and low project orders in the month of April and
May amidst the uncertainty or general elections and tight liquidity conditions prevailing in
the market. However, since the beginning of June we have started to witness good traction
in our lighting business. Our current order book stands at Rs. 508.4 Crores as on August 9,
2019 which provides good revenue visibility for the year ahead.
The gross sale including GST in metering segment was higher during the last six months
wherein higher receivables period coupled with higher inventory and security deposits are
involved resulting in increase of networking capital and ultimately in net borrowings.
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HPL Electric & Power Limited August 13, 2019
However, our debt equity ratio remains at 0.74, which is very comfortable. Our thrust on
strengthening our brand presence and visibility continued throughout the quarter. Building
upon our successful campaign with a Delhi Capital team and IPL we have now tied up with
the Haryana Stealers Pro-Kabbadi team. We believe this gives us some effective platform to
create strong brand visibility with the Tier 2 and 3 cities and in the rural areas enabling us to
extend our reach and drive aggressive growth in these regions.
Further, we focused on completing our brand building initiates with product innovation as
we have recently launched new innovative range of products in the lighting and switchgear
segments. Both these product ranges have received good response from our dealers.
Moving forward we expect our lighting and metering segments to see strong growth on a
sequential basis in Q2. We are also optimistic of seeing good traction across our business
segments in the second half for this year. Especially in our B2C business with the onset of
the festive season.
Furthermore, we as a company are fully geared up to meet the government ambitious target
of smart meters which can truly be a game changer providing enormous growth potential.
With this I would now like to handover the call for question and answer session.
Moderator:
Thank you very much Sir. Ladies and gentlemen, we will now begin the question and
answer session. We have our first question from the line of Shailesh Kumar from Sunidhi
Securities. Please go ahead.
Shailesh Kumar:
First thing I would like to know what is the outlook for metering business going forward,
both in terms of revenue and operating margin?
Gautam Seth:
We are currently sitting with the order book of 486 Crores net of GST. So in terms of the
outlook if you go back about two, three quarters we had a fairly good execution of our
metering. Yes we are today having strong order book. Going forward even when we see the
various tenders and enquiries which are currently with various utilities, they are involving
over 2 Crore meters. So again it is a very healthy enquiry band which is floating currently in
the market. So for the current year if you see going forward, we do see a in fact higher
double-digit growth in our metering segment.
Shailesh Kumar:
Sir what kind of margins would be involved in this business?
Gautam Seth:
Yes, just to give you a little more color on the first question. . On a very short-term horizon, if you
see from our first quarter to second quarter, we are seeing at least sequential growth of 20% in the metering, but then
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HPL Electric & Power Limited August 13, 2019
going forward again as the orders are coming, we would definitely see the growth momentum continue. In terms of
margins, we would say normally the margins would be around 15% to 16%. This particular quarter our EBITDA
margins has been around 14.1%, but that is more due to product mix. But I see it to improving a little more from here.
The raw material solution with respect the polycarbonate which actually depressed our margins last year. So we see a
very favorable position from an overall commodities, other raw material pricing perspective and with respect to
realizations also.
Shailesh Kumar:
My second question is, if you could throw some color on the new product that you have
launched during the quarter. What has been response and going forward what are the other
exciting products that are in the pipeline?
Gautam Seth:
We have launched a new MCB. It is a 10K MCB. This replaces our very successful older
model of techno MCB and that earlier model was in place for now over 10 years, but now
this has got much better features. It has got a new termination in fact the international size
termination. So it is a much better and improved product that we have launched. Only in the
last quarter that the materials had gone in, so we do expect which will eventually replace
our older version of Techno. We have also launched 7 new products in lighting, so these are
again very innovative because we already have a full range of lighting product but looking
at this range these are like a inverter lamps or very modern down lighters which can be
fitted in a very unique way. So it is a bouquet of 7 new products which we have launched
together. These have just been launched in the market, some of them are on the way, so we
would definitely see a good traction coming from this. As we are approaching the festive
season for lighting in the next 3 months, again these products are typically with better
margins. they do give us a different type of visibility which is very unique to HPL, where it
talks about our technology and the innovation, what our R&D teams have been doing. So
that is how we are complementing our existing range with these new special products.
Shailesh Kumar:
So basically, you are suggesting these products will be having better margin compared to
our margin in metering segments?
Gautam Seth:
No what I am saying is these are lighting products. Lighting has a very vast range of
products, so we normally have the bulbs, then there are lot of consumer, commercial
industrial lighting products which are typically the batons, the down liters, panels, then we
have a street lighting. These are innovative products in the very same segment. Although,
the volumes may not go up as compared to the regular products, but like we have a single
bulb which changes in to four colors, so these are also used during festive times, these are
quite innovative. They do have off the shelf instant value where a consumer can just pickup
and probably decorate his house. So there a are developments happening in each of our
factory, so our teams are working and we are constantly launching innovative products. For
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HPL Electric & Power Limited August 13, 2019
this festive season, especially for Diwali, we have launched 7 specific products in our
lighting range.
Shailesh Kumar:
Sir my next question is if you could help me understand what is the quantum of opportunity
in smart meters in India and how do we plan to capitalize on it?
Rishi Seth:
In this field of smart meters, the opportunities are immense, and the opportunities range
from supply of smart meters to AMR/AMI projects. So we are competent and have been
doing both these things in the past. So we intend that Government of India, Ministry of
Power has said that in the next 3-5 years they intend to replace 20 Crores meters. So we feel
that in the next 8-10 years, they will be able to replace that and then the business
opportunities will tremendously grow, because then the business opportunities will grow
from not only supply, it will also grow to service and it will also grow to AFM.
Shailesh Kumar:
Sir one housekeeping question. What has been on a receivable and inventory days during
the quarter and by then do we expect our networking capital to come below 150 days?
V.R. Gupta:
Number of days as far as utility debtors are concerned on annual net basis 192 days and for
others 105 days. Whereas if we take on gross sale basis with GST the number of days for
utility debtors are163 and for non0utility 91 days.
Shailesh Kumar:
What about inventory days Sir?
V.R. Gupta:
Inventory in utilities around 59% of the total inventory.
Gautam Seth:
I would like to just add that if you see in the last six months, the sales has gone up on the
metering side and with a strong order book. So there has been an increase in the net
working capital of almost about 29 Crores to 30 Crores and this is primarily due to the
inventories going up, so almost within June itself we are seeing certain inventory buildup
for the higher productions. So currently the production in our metering plant is at quite a
high level, so that is where the inventory buildup has been there which has resulted in the
net working capital going up. Now as we are seeing the increased sale, so the possibility of
it coming down is when the receivables come in from the utilities faster, but generally
receivable days are at around 160 days, on gross sales.
Moderator:
Thank you. We have next question from the Sadam Hussain from Noor Capital. Please go
ahead.
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Sadam Hussain:
I would like to know what is the company’s outlook regarding the debt on the books going
forward from this level and can we expect any stability or there will be more debt taken or
even a positive reduction going forward?
V.R. Gupta:
Yes, debt will remain in this range only, hardly 5 Crores to 10 Crores here and there, maybe
down or even may be up depending on the utility debtors.
Sadam Hussain:
Any plans to bring it down or get debt free in 2-3 years?
Gautam Seth:
No, not on an immediate basis, because our right now with the kind of sales growth we are
looking at in the next couple of quarters. Over 50% coming in from the metering so
immediately we do not see a reduction. But as Mr. Gupta was saying the levels at which the
debt is it could remain so and if you see even in our September quarter last year, if you see
almost in the last 4-5 quarter, we are almost at the same debt what we are doing. Although
in the previous quarters we have seen a reduction on the nonutility debtor days. In the last
quarter, what we have just reported, the days are almost constant but that is something
where going forward we will see for further improvement in debtor days mainly with more
dealers entering the channel financing and more fiscal discipline within the company being
there. Although in the overall market the liquidity situation seems to be tight, but still I
think efforts are going on where we would see certain nonutility debtors coming down.
Sadam Hussain:
So, are you finding it tough if we have to raise new debt?
Gautam Seth:
No, it is not a problem.
Moderator:
Thank you. We have next question from the line of Ruchir Shah from Cloud Nine
Investments. Please go ahead.
Ruchir Shah:
Sir, Can you give us some guidance on the revenue growth and profitability growth for the
next 2-3 years and we will be able to achieve 3% PTA margin in the next 2-3 years?
Gautam Seth:
With respect to the revenue growth, we see a good double-digit revenue growth happening
in meters based on two things; one, we are already having a good order book almost in the
first quarter, but we still have the last part of the year remaining with us. Second, enquires
are very strong. We see the metering industry to be really picking up. This is excluding the
smart meter opportunity and when we take the smart meter opportunity, the industry is said
to grow at a very large level in the next coming years. So as regard metering is concerned
on a short-term considering this year. We see a double-digit growth but even going forward
in the next 3-4 years, we see that to be a very strong segment for us. Looking at the trade
segment, the quarter was little weak in some of the products but the way we have seen the
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things to pickup, I would say that we expect a good Q2 at least from the lighting and certain
other products. But going forward we see the market growing up. On a three year period
even on the trade side, we would see tremendous growth coming in especially coupled with
our brand building effort. We are expanding our channel reach today in terms of our retail
outlets and the sales point. So I think these type of efforts what we are doing will definitely
give us a better revenue outlook. In terms of margin, to achieve as you said 3% PAT, I see
that is easily possible. We are if you see in the last couple of quarters the operating
expenses have been under control whether they are other expenses or even on the salaries
and other things. So there has been a lot of work that is already happening and if you just
see even on quarter basis margin, the quarter ending March 2019 we did achieve that in a
single quarter but I am sure with our revenue said to go up, better control happening on the
expense side, and our push also on the centralized procurement system what we have put in,
which is already showing certain results where we see a big war on reducing our
procurement cost across the various factories. So, there are lot of steps what we have put in.
= As we go ahead I definitely see much better margin to come.
Moderator:
Thank you. We have next question from the line of Ninad Sabnis from Sabnis Financial.
Please go ahead.
Ninad Sabnis:
Sir I would like to know what is the outlook for lighting and switchgear business going
forward?
Gautam Seth:
We always have been saying that as an industry if you see the lighting industry the growth
potential is very large. In fact it considering most of the fields of electrical or the related
products lighting does have a very big upside as per the way the industry has been growing
and the way the LED penetration has been happening. So going forward we do see a lot of
growth coming in. TThere has been certain challenges with the lighting industry over the
past couple of years. The opportunity has come with certain challenges, those challenges
being that the prices have been coming down a lot of innovation has been required and that
is where HPL has been really working on it. So we have a complete control over the design,
over the manufacturing of all the materials that we have been selling. So that has helped us
to be really up-to-date on that. In terms of growth, major share has come in from consumer
side of the LED lighting, but going forward by the second half of the year, we see a lot of
the project sales and the outdoor lighting that part of our business to pickup.
On a longer term, we see a very steady growth on the lighting front. Switchgear is a much
more steadier vertical, the growth of the industry is more slower mainly because of the
pains what we have been seeing in the real estate segment. That segment has been really
muted, the overall demand is not very large right now and in the last couple of months,
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almost last two quarters even the government purchasing due to the elections has been on
hold, so while we have seen muted growth but overall it is steady. If you see HPL
performance in the last two years our switchgears has picked has picked up, more because
of certain reorganizations what we did and we got in a specific focus on the switchgear part
and that did pay results and in certain quarters we were even able to grow even about 20%-
30%. But overall as I see it going forward, we would see just a kind of double-digit growth
not a very high demand coming in. So somewhere we expect to grow a little above the
industry that is how we see the segment currently.
Ninad Sabnis:
Next question would be on the EBITDA margins. Do you see any improvement in the
EBITDA margin as the year progresses?
Gautam Seth:
As I said earlier, on the metering side, because metering, we have done about 14% EBIT
margin, so I will take to the little product wise. So, the metering we might expect a slight
betterment in that. Similarly, if you see lighting has come down in this quarter at 10%. But
maybe with a better mix that may improve by 100 bps as we go ahead, but our switchgear
and wire business, they are at a much more steadier level and I do see much improvement
happening in that, but the overall EBITDA we have seen certain improvement in this
quarter largely due to higher share being from metering and switchgears, but as we see the
lighting also which is said to grow in the second quarter then maybe the overall figure may
get altered a little downwards.
Ninad Sabnis:
Can you throw some light on the order book movement during the quarter, how much was
executed and what was the incremental order inflow for us?
Gautam Seth:
I do not have exact incremental figure but in our fourth quarter results our total order book
at that time was around 574 Crores, which is now at 508 Crores. So there has been the
execution has been little more than the new orders coming in but that is more because in the
first quarter almost two months we have seen the elections. So lot of tenders were out but
that not tenders were getting decided. Now as we go forward in the second quarter and the
third quarter, we do see a lot of orders getting decided, so that is where we see a big
opportunity for us.
Ninad Sabnis:
Lastly, when can we expect our net working capital days to go below 150 days?
Gautam Seth:
Not in the immediate future. because over 50% of our business is currently coming from
meters, At least for this year when we see because of the large order book and the enquiries
that are there, we will see the metering part to be strong, although the trade part, will also
pick up. So immediately in this year I do not expect that to come down. Although we are
constantly working to make sure that comes down, but maybe not in the immediate future.
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Moderator:
Thank you Sir. We have next question from the line of Ankita Jain from Alpha Investment
Advisors. Please go ahead.
Ankita Jain:
I want to know what is your outlook for the B2C business over the next couple of years and
considering our brand building and marketing efforts, do you expect it will grow faster than
the utilizing metering business going forward?
Gautam Seth:
Yes, if you see the overall B2C business, in immediate future, we would see lighting to
really grow in a bigger way and the switchgear business and the wire business to be on a
more steadier level although there will be growth that will be just at a little marginal rate.
But overall if you look at a longer period we see our B2C business to be growing at a faster
rate. Currently, in the short term, we have seen certain demand going down or even the
liquidity being a little tight in the market, but as we go ahead, we are very well placed on
the B2C side. The advertisement push what we have done in the IPL and even the one
which we have recently started with the Kabbadi Association we believe the brand is now
getting to be known better at least on the trade side and even with the consumers which are
using. The awareness levels are getting to a better level. With this we have also reorganized
our main dealer and distributor segment. In fact, we have drastically reduced the number of
dealers with a view to bring in a better fiscal disciple that has being showing on the books
but as at the same time we are expanding our retail network. So with almost 27,000 retailers
today and which is said to grow in a bigger way in the coming years the B2C segment will
definitely see a sustained growth going forward as we are putting more money on the
advertisements.
Moderator:
Thank you. We have next question from the line of Priti Sharma from Individual Investor.
Please go ahead.
Priti Sharma:
What has been the response like for the promotional campaign we did in the Delhi Capital
team during the IPL. Have we see any tangible benefits of the same and also what kind of
response are you expecting from the Haryana Stealers pro Kabbadi Campaign?
Gautam Seth:
Yes we have seen a quite a positive response in our association with IPL because as you are
aware IPL is the most watched tournament with a very large viewership. During the last 2-3
years. When we had actually started investing in building up the brand, the IPL was viewed
by our consumers, by our trade channels and everybody as a much more bolder step by the
company where the visibility was much more better and we were able to build up a much
more better proposition with the customer. Somehow in terms of the sales it did not show
up directly on the first quarter, but we believe brand building in much for a longer time. So
we are already from June onwards seeing certain traction on the lighting part. So overall as
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we continue with various other ways to reach out to a consumer we do expect the brand to
be build up in a better way. Further, will be able to even improve our realizations as we go
forward with a better brand and with the brand pull by the channel and as the better brand
pull happens, it will also help us to reduce the number of receivable days because that is
where we can be more commanding with our channel on that. The difference with Haryana
Stealers Association and the IPL is that if you see Kabbadi in terms of the Tier 2 and Tier 3
markets and the rural markets, much of the data shows that the viewership in certain of
these places is much more than what even the IPL commands. So it is our effort now to get
into these type of towns which we believe is going to be the future growth areas in the
country and that is where the newer demand will come through. So, we wish to capitalise on
that and the initial the responses that we have got and even with specific activities
happening on a BTL basis, in Haryana, UP, and certain other northern states we do expect a
much better visibility and thereby growth coming in sales for HPL.
Priti Sharma:
Sir one more question. Why is the depreciation increasing so much like almost we can see a
35% YOY increase? What is the reason behind this? Could you please explain?
V.R. Gupta:
In Q4 2019, depreciation was 8.62 Crores that has gone up to Rs. 9.43 Crores. It is partly
because of Rs. 75 lakhs increase on account of Ind-As 116 introduction.
Gautam Seth:
Just to add on that there is a new accounting standards, AS-116 and due to that the
depreciation has gone up by about Rs. 75 lakhs. So that is one of the reason because that has
become mandatory from April 2019.
V.R. Gupta:
Last quarter it was 8.62 Crores that has increased to 9.43 Crores in this quarter.
Priti Sharma:
One last question, what is the outlook for the interest expense. Do you expect it to go below
50 Crores in the foreseeable future?
V.R. Gupta:
Right now, it does not seem to be because it would be around 60 Crores or so in the whole
year.
Moderator:
Thank you. We have next question from the line of Harshit Kapadia from Elara Securities.
Please go ahead.
Harshit Kapadia:
I just wanted to know how large is the professional lighting segment within your lighting
business Sir, since there has been a media cause of decline in revenue in this quarter?
Gautam Seth:
Close to 30% is the professional loom division.
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Harshit Kapadia:
This is purely because of demand being subdued or is there also price angle to it because
there has been a decline in your LED prices is what we understand from the market sources,
so is there is mixture of both or is only one?
Gautam Seth:
It is a mixture of both because one if you see the professional lighting segment this is
mainly what we are doing through trade or non-institutional customers. If you see there has
been a large demand which came in through the government purchases and through the
EESL and other such large institutions. So due certain time when the prices were really
coming down or based on certain terms and conditions which we felt were not very
favorable at that time. So we consciously did not take certain of those orders, so although
the demands were there and there was something that we could have also participated and
actually brought in the orders. But looking at a long-term view, we at that time chose not to
go for that. Nevertheless now we see the demand to be picking up so there is even in the
professional looms, now we see good enquiry bank is there and with certain specifications
and the requirement also going up, that is where we see the future of professional looms to
be picking up. Just to recall that we have been saying for the last 2-3 years that when the
real opportunity came in we were about 60-70 companies which actually came in to it, but
the demand is now much more consolidated, lot of not so serious players are out of the
industry and they are in the fray. So now the terms are much better for us to pursue those
opportunities. About one and half years back we did very large project of the Bhopal Smart
City. So there are a couple of very large such projects which are coming out and which we
believe are really going to be beneficial for us because of the technology they are asking for
and that is where our strength comes in, but it is also the margins are good, the terms and
conditions are quite favorable looking a long-term business opportunity.
Harshit Kapadia:
Continuing with professional lighting only, is there is a price still reduction going on mean
LED, bulbs, batons and panels or is there the curb has been reduced?
Gautam Seth:
If you see as a reduction as a curb what was happening that is not happening as such, but
yet the market it is an open market, it is competitive so each time there could be somebody
who is playing on the price but that happens with every other product so as such the drops
what we have seen earlier in the last 3-4 years that is not as such happening.
Harshit Kapadia:
Some of your peers during this Q1 conference call had highlighted that there is some
amount of slowdown in consumption especially in the real estate sector since our products
also much related to that sector, are you seeing any kind of slowdown especially Tier 2,
Tier 3 cities where our advertisement is largely maintained towards the rural market now.
So are you seeing a slowdown there as well and that would impact some demand in Q2 and
possibly in Q3?
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HPL Electric & Power Limited August 13, 2019
Gautam Seth:
I would agree with that. There has been a slowdown in the real estate segment and so we
have seen certain affect on our switchgear business, many on the domestic switchgear and
also on the wire business, which normally goes to the big and small builders. Similarly, this
type of a slowdown maybe going into the Tier 2 and Tier 3 cities, our plan of building up
the brand is a little long-term. So whether there is a recession or low demand which we
believe is still temporary in nature we would continue to build up our brand because when
the opportunity comes that is where we can look to exploit our brand in a much better way.
Harshit Kapadia:
But would you want to curtail some amount of your ads or promotional expenses at this
point in time since there is some amount of slowdown just to maintain that EBITDA margin
level of let say 12%, 13% odd for the full year?
Gautam Seth:
Yes if you see our advertising spend in the last year and if you see the current run rate of
spending that is already in a checked manner. So we are aware of the conditions which are
currently prevailing in the market but we are always ready to review based on that. But we
do anticipate a bigger demand coming in the near future on the festive season and then
going forward in the next 2-3 years we do see the demand really picking up.
Harshit Kapadia:
How has been the growth in July and part of August that we have just completed in lighting
and cables and wire segment just to understand how severe is this, is there the decline
continuing or you are seeing some?
Gautam Seth:
More specifically on the lighting I can update that from June and continuing in July, we
have seen the lighting segment to pickup as compared to April and May, so that is why we
did talk about that. We see Q2 to be much better on the lighting front, of course a large part
of the festive season because typically from the August 15 is the time when the real festive
season begins, starting with Ganesh Chaturthi and then going to Onam as we go ahead, so I
think we are quite fed for the festive season. So just considering June and July I think things
have been on the positive side.
Harshit Kapadia:
Just two more questions from my side. Sir switchgear could you highlight the 2% growth,
we had seen a growth in the switches segment or the MCCV or the MCB segment, if you
just break up that into different product segment?
Gautam Seth:
As I said earlier because of the real estate, we are seeing the domestic switchgear demand
going up slowly and that is mainly on the private sector side. Also, in this quarter the
purchasing, that was happening earlier for the Saubhagya scheme and lot of other schemes
that the government is running, because they also had certain demands coming in through
various contractors, so that was not seen at all in the first quarter. In our case, last year, in
the Q1 also had a little higher base as compared to the earlier years, But definitely our team
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HPL Electric & Power Limited August 13, 2019
is looking at how we can grow from here in the switchgear, despite certain slowdown being
in the real estate segment.
Harshit Kapadia:
Just final question Sir since we are market leader in utility meter segment, generally power
meters, this it a thought process by the management where you know government spending
or incremental government spending would be coming in more towards water related
project so we have a product in place like a water meter or do you think we should be
developing that as a product since that is a very long-term benefit as well?
Rishi Seth:
Water meter is already there in our R&D and we have already been assessing that and we
are also getting the flow meters designed for that water meter, but we are still looking at
various possibilities of both Shakthi Ministry, what type of specifications, what type of
model they will follow and I know it will be AMR compliant so what type of an AMR
model will they follow. Also we will be doing the financial evaluation of both the ministry
as well as the our own value added benefit to take the decision on that, so we are in touch
with all the stakeholder in this and as and when we get more clarity we will brief you.
Moderator:
Thank you. We have next question from the line of Priti Sharma, Individual Investor. Please
go ahead.
Priti Sharma:
Sir I just have a question. What is the credit rating at present?
V.R. Gupta:
A minus.
Priti Sharma:
One more if I could take it. With the rate cuts being announced by RBI at present, do you
expect the interest rate that we are paying our loans currently to come down?
V.R. Gupta:
Yes, definitely it will come down. SBI has also taken step to reduce it.
Moderator:
Thank you. We have next question from the line of MS Arun from Capital Markets. Please
go ahead.
MS Arun:
Sir. Could you please tell me the market share of our each of the product in geographical
wise?
Gautam Seth:
I am giving you the geographical break up you have been asking for the overall B2C
business. So, the north region contributes about 32%, the west contributes about 28%, south
about 24% and about 16% is the eastern region.
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HPL Electric & Power Limited August 13, 2019
Moderator:
Thank you Sir. As there are no further questions, I now hand the conference over to Mr.
Harshit Kapadia from Elara Securities Private Limited for closing comments. Sir over to
you!
Harshit Kapadia:
Thanks Bikram again. We thank Mr. Gautam Seth and Mr. Rishi Seth along with Mr. Gupta
for giving us an opportunity to host this call. We also thank all the investors and analysts for
joining for this call. Any closing remarks Gautam Sir and Rishi Sir?
Gautam Seth:
I would like to thank everybody and as we go ahead to the second quarter, the teams are
working to ensure that we are able to bring out better results going on the metering side and
lighting plus all the other products as well and the company being today very conscious on
to look at the networking capital and bring it down. So there are continuous efforts
happening in that and we will relook and see how we can bring it down further. Thank you
once again.
Moderator:
Thank you very much Sir. Ladies and gentlemen on behalf of Elara Securities Private
Limited that concludes the conference call. Thank you for joining without us and you may
now disconnect your lines.
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