Smart Meter Makers to See 20% Revenue Rise This Fiscal: Crisil

Indian smart electric meter manufacturers are set to record around 20 percent revenue growth this fiscal, similar to fiscal 2025, with total turnover likely to reach Rs 9,000 crore, Crisil Ratings said in a report.

The key driver is the easing of implementation bottlenecks under the government’s Smart Meter National Programme (SMNP), which aims to replace 250 million conventional meters with prepaid smart electric meters.

Smart meters, which record consumption in real-time and are connected via the internet, enable users and power distribution companies (discoms) to better monitor electricity usage and billing.

Margins and Profitability Set to Improve

The robust revenue growth is expected to improve operating profitability by 75 to 80 basis points to nearly 13 percent in fiscal 2026, the report said. Higher margins stem from the advanced features of smart meters and increased capacity utilisation, which will help manufacturers absorb costs more efficiently.

Healthier cash flows will also reduce dependence on debt to meet rising working capital needs and moderate capital expenditure, keeping balance sheets stable and credit profiles intact.

SMNP Rollout May Extend Beyond 2026

Launched in 2017, SMNP offers a Rs 90,000 crore business opportunity. Under the programme, discoms issue contracts to Advanced Metering Infrastructure Service Providers (AMISPs), which procure smart meters from manufacturers.

Tendering for over half the target has been completed, and discoms are likely to accelerate implementation over the next four to five years. However, with only 25 million meters installed by March 2025, the original March 2026 deadline may be pushed back due to early delays.

“Execution under SMNP will pick up from this fiscal,” said Nitin Kansal, Director at Crisil Ratings. “Streamlined direct debit facilities for AMISPs, improved semiconductor availability, and stricter quality norms on imports are all positives for domestic manufacturers.”

Working Capital Needs to Rise 25-30%

Crisil expects working capital requirements to increase by 25 to 30 percent this fiscal due to higher execution volumes. The cash conversion cycle for smart meters takes around 170 to 180 days, covering inspection, delivery and post-installation payments. Delays linked to AMISP payment conditions remain a risk, though the criticality of SMNP and DDF mechanisms should mitigate delays, the agency said.

Manufacturers’ balance sheets are expected to remain healthy, with gearing between 0.50 and 0.55 times and interest coverage of 3.0 to 4.0 times over the next two fiscals.

“Overall, we believe cash flows will improve and debt reliance will remain limited,” said Smriti Singh, Associate Director, Crisil Ratings. “Most manufacturers expanded capacity in the past two years and have no major debt-funded capex planned, which supports stable credit profiles.”

Still, the pace of installations, timely payments, and any geopolitical disruptions to semiconductor supply will remain key factors to watch, Crisil cautioned.