HPL Electric & Power Ltd

Dear Shareholders,

As I reflect on the fiscal year 2024, I am filled with immense pride and gratitude for the remarkable journey that HPL Electric & Power Ltd. (HPL) has undertaken. This year has been a testament to our commitment to innovation, operational excellence, and strategic growth. Despite the global economic challenges, our resilience and strategic foresight have enabled us to achieve significant milestones and position ourselves strongly for the future.

Our financial performance for FY24 shows our growth trajectory and operational excellence. We achieved a substantial 15.74% increase in revenue from operations, reaching 71,460.86 crore, up from 71,262.21 crore in the previous fiscal year. This growth is a testament to our strategic initiatives and our ability to capitalize on market opportunities across all our product segments.

Our focus on operational efficiency and cost management has yielded substantial improvements in profitability. The Profit After Tax (PAT) grew by 44.22% to 743.63 crore, reflecting the effectiveness of our strategies to enhance operational efficiency and maximize performance. Additionally, our Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) grew by 22.49% to 7192.15 crore, with EBITDA margins improving by 72.54 basis points to 13.15%. These results are indicative of our disciplined approach to financial management and our commitment to delivering value to our shareholders.

One of our key growth drivers has been our leadership in the smart metering sector. We achieved a handsome 27.25% year-over-year growth in our Metering, Systems & Services segment. This growth was propelled by significant orders from Advanced Metering Infrastructure Service Providers (AM ISPs) and through the government's Revamped

I Distribution Sector Scheme (RDSS). Our strategic partnership with Wirepas Oy has further strengthened our smart metering solutions, aligning with national objectives and enhancing our competitive edge in a dynamically evolving market.

Smart meters are transforming the way energy is managed, consumed and accounted ; providing an unparalleled control and clarity over energy usage to consumers and providers alike. With the widespread adoption of smart meters, we are witnessing a paradigm shift in the energy sector. Our advanced metering solutions are not only enhancing energy efficiency but also driving significant cost savings for our customers.

However, it is important to note that only a fraction of what is planned lias been translated to reality on a national scale, and there is vast scope for much more going forward. As we expand our market reach, we are poised to play a pivotal role in India's transition to a smarter and more sustainable energy future.

In line with our culture of innovation and technological advancement, we have entered into a landmark partnership with Guangxi Ramway Technology Co. Ltd., a leader in magnetic latching relays. This Memorandum of Understanding (MoU) will leverage Guangxi Ramway's technical expertise to advance relay manufacturing in India. Magnetic latching relays are specialized electromagnetic switches that maintain their state without continuous current, making them ideal for energy- efficient applications. These relays are critical components used in the manufacture of Smart Meters and other Electrical Equipments. By producing these relays domestically, we will streamline supply chains, reduce costs, and improve availability, aligning with the Government of India's Make in India initiative.

This collaboration reflects our objective towards enhancing our manufacturing capabilities and delivering high-quality products to our customers. As India advances in smart meter deployment and modernization, the demand for reliable relays is paramount. This partnership not only supports the growth of the smart grid and energy management sectors in India but also strengthens HPL's market position, fosters innovation, and contributes to the development of India's energy infrastructure. However, we are still in the early stages of implementing this, and it should start giving us meaningful positive impact from FY2026 onwards. This will form an important pillar within our offerings.

Throughout the year, we have made focused improvements in our margins, optimized our operations, and reduced debtor days, strengthening our financial health and ensuring better liquidity management. Our commitment to improving balance sheet ratios reflects a prudent approach to financial management and sustainability, ensuring we are on a path of continuous growth.

Apart from meters, our strategic focus on other high-value segments such as switchgear, lighting, and wires & cables has also been instrumental in driving revenue growth. The wires and cables segment, in particular, is set to experience positive growth driven by increasing demand and technological advancements; switchgear being at a rise of 27.43% YoY and wire & cables growth upwards of 7% YoY for FY24. The shift towards the organized sector, coupled with governmental emphasis on infrastructure and developmental projects, is anticipated to drive substantial growth across various industries including infrastructure, power, telecommunications, transmission and distribution, manufacturing, real estate, engineering, and automotive.

At HPL, our dedication to sustainability and environmental stewardship remains at the forefront of our strategic vision. We continue to invest in R&D, driving continuous improvement and keeping us at the forefront of technological developments. Our efforts are aligned with significant government initiatives such as the Smart Cities Mission and the National Smart Grid Mission, reinforcing our role as a leader in the nation's energy sector.

Our strategic initiatives are not just about driving growth but also about creating a positive impact on society and the environment. We are committed to reducing our carbon footprint and promoting energy efficiency through our innovative products and solutions. Our advanced metering solutions, for instance, are helping consumers and providers alike to manage energy usage more efficiently, thereby reducing greenhouse gas emissions and contributing to a more sustainable future.

Our efforts to expand our global reach are also giving us forward momentum. We are now present in over 42 countries, driven by steadily increasing exports across our Metering Systems & Services and Consumer, Industrial & Services segments. Our deep order book pipeline, standing strong at over Rs2,000 crore as of 31 st May, 2024, gives us clear visibility for near-term growth and profitability.

The global market for smart meters is also expanding, and we are well-positioned to capitalize on this opportunity, Our innovative metering solutions, coupled with our large-scale and automated manufacturing capabilities, should enable us to offer compelling value proposition to customers around the world. As we continue to expand our global footprint, we remain committed to maintaining the highest standards of quality and customer satisfaction.

As we envision a smarter, sustainable future for India and the world, our commitment to excellence, transparency, and eco-conscious growth remains our guiding compass. With a culture steeped in quality and innovation and a strategic focus on high-value segments, we are poised to steer through the evolving energy landscape with agility and foresight.

In closing, I extend my heartfelt gratitude to our shareholders, customers, employees, and partners for their continued support and trust in HPL Electric & Power Ltd. Together, we will continue to build on our successes, driving value creation and sustainable growth for years to come.

Thank you for being part of our journey.

Sincerely,