Will India's Smart Electric Meter Manufacturers Achieve a 20% Revenue Boost in FY26?

New Delhi, June 24 (NationPress) Producers of smart electric meters in India are expected to witness a 20 percent revenue increase, similar to fiscal year 2025, reaching approximately Rs 9,000 crore in the current fiscal year (FY26), according to a recent report.

The report from Crisil indicates that the primary driver for this growth is the resolution of initial challenges faced during the implementation of the Smart Meter National Programme (SMNP). This initiative aims to replace 25 crore traditional electricity meters with prepaid smart electric meters.

Initiated in 2017, the SMNP presents a lucrative opportunity worth Rs 90,000 crore for the sector. Under this program, each state distribution company (discom) assigns contracts for smart meter installations to an Advanced Metering Infrastructure Service Provider (AMISP), which sources these meters from manufacturers.

Such significant revenue growth is anticipated to enhance manufacturers' operating profitability by 75-80 basis points (bps), bringing it close to 13 percent by fiscal 2026.

This increase is attributed to the higher margins associated with smart electric meters, which offer enhanced functionality compared to traditional meters. Furthermore, improved capacity utilization following faster order execution will facilitate better cost absorption, the report suggests.

As cash flows improve, manufacturers will rely less on debt to meet growing working capital needs and moderate capital expenditure, resulting in healthier balance sheets and stable credit profiles.

Nitin Kansal, Director at Crisil Ratings, stated, "Execution of the SMNP will accelerate this fiscal for three main reasons. Firstly, the direct debit facility (DDF) for AMISPs has been optimized. Secondly, the supply of semiconductors has stabilized after previous disruptions caused by global shortages due to Covid-19. Thirdly, the government's directive to import Bureau of Indian Standards (BIS)-certified smart electric meters ensures quality and reduces substandard imports, benefiting local manufacturers.”

Tendering for more than half of the target has been finalized, with discoms expected to hasten SMNP implementation to meet rollout objectives within the next 4-5 years.

Although the March 31, 2026 target for SMNP rollout may be extended due to earlier delays—only 2.5 crore smart meters were installed until March 2025—the overall cash flow for smart meter manufacturers is projected to rise, reducing their dependence on debt for increased working capital needs.

Smriti Singh, Associate Director at Crisil Ratings, concluded, "We expect the cash flows for smart meter manufacturers to improve, thus lessening their reliance on debt to accommodate rising working capital requirements."