Credit Rating

June 26, 2026 The Manager, The Secretary Listing Department, BSE Limited National Stock Exchange of India Ltd. 25th Floor, New Trading Ring, Rotunda “Exchange Plaza”, C-1, Block G, Building, PhirozeJeejeebhoy Towers, Bandra-Kurla Complex, Bandra (E), Dalal Street, Fort, Mumbai – 400 051 Mumbai – 400 001 Symbol: HPL Scrip Code: 540136 Sub: Disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 – Credit Rating by India Ratings and Research Dear Sir/Madam, Pursuant to the provisions of Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform that India Ratings and Research (Ind-Ra), has affirmed HPL Electric & Power Limited’s bank loan facilities as follows: Details of Instruments Size of Rating Assigned Instrument Date of Coupon Maturity Rating Issue with Type Issuance Rate Date Action (million) Outlook/Watch Bank loan IND - - - INR18,400 Affirmed facilities A+/Stable/IND A1 This is for your kind information and record. Thanking You, For HPL Electric & Power Limited Vivek Kumar Company Secretary Encl: As stated above India Ratings Affirms HPL Electric & Power’s Bank Loan Facilities at ‘IND A+’; Outlook Stable Jun 26, 2026 | HPL Electric & Power Limited | Consumer Electronics India Ratings and Research (Ind-Ra) has affirmed HPL Electric & Power Limited’s (HEPL) bank loan facilities as follows: Details of Instruments Instrument Date of Coupon Maturity Size of Issue Rating Assigned with Rating Type Issuance Rate Date (million) Outlook/Watch Action Bank loan - - - INR18,400 IND A+/Stable/IND A1 Affirmed facilities Analytical Approach Ind-Ra continues to take a fully consolidated view of HEPL and its subsidiaries - Himachal Energy Private Limited (97% stake), HPL Electric & Power Ltd.- Shriji Designs (97%) and HPL-Shriji-Trimurthi Hitech Company Pvt. Ltd. (94%) while arriving at the ratings because of the strong operational and strategic linkages among them. Detailed Rationale of the Rating Action The affirmation reflects HEPL’s healthy order book of INR37.5 billion as of February 2026, of which around 97% of the orders are for smart meters, ensuring revenue visibility in the medium term. The revenue and EBITDA improved to INR18.1 billion in FY26 (FY25: INR17 billion; FY24: INR14.6 billion) and INR2.8 billion (INR2.5 billion; INR1.9 billion), respectively, on account of higher sales in the cables and switchgear segment while broadly maintaining EBITDA margins across segments. Ind-Ra expects the revenue and EBITDA to improve further in FY27 on account of growth in the high- margin meter and switchgear segment. Although, Ind-Ra expects some margin pressure across segments in FY26 driven by a) rising prices of key inputs such as electronic components, among others, against largely fixed-price contracts in the meter segment; and b) rising commodity prices, which could impact consumer and industrial segment; although, passing on the price increases to consumers shall be a key monitorable. However, Ind-Ra expects the overall margins to remain healthy at about 14% in FY27 (FY26: 15.5%; FY25: 15%). The ratings are, however, constrained by the inherently high working capital requirements of the business, which are largely financed through working capital borrowings, resulting in moderate debt metrics. List of Key Rating Drivers Strengths - Established presence in meter industry - Diversified revenue base - Healthy order book - Improvement in revenue and EBITDA in FY26 Weaknesses - Modest credit metrics - Elongated working capital cycle Detailed Description of Key Rating Drivers Established Presence in Meter Industry: The group is an established player in the meter industry and has a manufacturing capacity of 11 million meters per annum. It has been delivering quality products because of complete backward integration and a strong in-house research and development facility. The revenue share from the meter segment decreased to 53% in FY26 (FY25: 63%; FY24: 58%) because of a marginal decline in smart meter volumes and significant growth in the switchgears and cables segments. Meter revenue largely remained stable at INR10.2 billion in FY26 (FY25: INR10.7 billion; FY24: INR8.5 billion). Ind-Ra expects the decline in the meter segment to be a one-off event and expects the segment to witness volume growth in FY27 as 90%-95% of its order book comprises of smart meter orders. Furthermore, the central government aims to install 250 million smart meters in the medium term; of these, only 52.8 million have been installed till date, leaving a large room for smart meter manufacturers. Ind-Ra believes the group will be able to capitalise on this opportunity, given its large manufacturing capacity, strong research and development capabilities, and three decades of manufacturing experience. Diversified Revenue Base: The group maintains a diversified product portfolio, with key segments comprising electronic metering (57%), switchgear (16%), lighting solutions (8%), and cables (19%). The company has witnessed an increase in revenue contribution from the cable segment, while that from the meters segment has declined, and switchgears and lighting segments have remained stable. This diversified product mix helps mitigate the risk of product obsolescence and safeguards revenue against downturns in any single segment. Healthy Order Book: The group has an order book of INR37.5 billion as of February 2026, of which orders worth INR3.6 billion are for smart meters. Ind-Ra expects the group to receive incremental orders in the short term, given the central government’s push towards the installation of 250 million smart meters in the medium term. Ind-Ra expects the meter segment to drive revenue growth with the increased share of smart meters, leading to better margins and higher revenue over the near-to-medium term. Improvement in Revenue and EBITDA in FY26: The consolidated revenue increased to INR18.1 billion in FY26 (FY25: INR17 billion; FY24: INR14.6 billion), largely due to 11.1% yoy, 12.8% yoy and 50% yoy growth in the switchgears, lighting, and cables segments, respectively. However, the meter segment revenue declined 4.6% yoy due to industry-wide execution disruptions. Similarly, the EBITDA margins improved to 15.5% in FY26 (FY25: 15%; FY24: 13.1%), led by slightly higher margins in the meter segment. The meters segment EBIT margins stood at 17.5% in FY26 (FY25: 17%; FY24: 14.6%), and consumer & industrial segment at 10.2% (11.4%; 11.4%). However, Ind-Ra believes the meters segment may experience some margin pressures in FY27, due to the fixed-price nature of contracts and rising raw material costs, driven by the West Asia conflict, which cannot be passed on. In contrast, the consumer and industrial segments are likely to witness limited impact on the margins, as increases in raw material costs can be passed on to customers. Ind-Ra expects the smart meter segment to further drive growth in revenue and EBITDA in the short-to-medium term. Furthermore, the management expects the switchgear segment to contribute meaningfully to revenue and EBITDA growth in FY27. Ind-Ra expects the group to report revenue of about INR19 billion-20 billion with a healthy EBITDA margin of about 14% in FY27. Modest Credit Metrics: At FYE26, the consolidated gross debt (including acceptances) stood at INR9 billion (FY25: INR7.5 billion; FY24: INR7.2 billion) comprising term debt of INR1.5 billion, working capital loans of INR5.99 billion and acceptances of INR1.5 billion. On a consolidated basis, net leverage (adjusted net debt/operating EBITDA) and interest coverage (operating EBITDA/gross interest expense) have improved over the years, yet remained moderate at 3.1x in FY26 (FY25: 2.8x; FY24: 3.6x) and 3.0x (2.8x; 2.1x), respectively. HEPL is planning a capex of INR 1 billion-1.2 billion in FY27 to establish medium- and high-voltage cable manufacturing facilities and is l [Showing first 8,000 characters — download PDF for full document]