Havells India Limited — Q1 FY27 earnings call

Call held 17 Jul 2026

Management summary

Havells India Limited reported strong Q1 FY27 revenue growth, driven by resilient consumer demand and robust performance in renewables, now a separate segment. Despite inflationary pressures and increased brand-building investments impacting short-term profitability, the company successfully implemented price hikes. Challenges included a delayed summer for cooling products and a decline in the switchgear segment due to export disruptions, though management expects a rebound.

Highlights

  • Strong revenue growth in the first quarter, indicating resilient demand despite inflationary pressures and West Asia uncertainties (Anil Rai Gupta, page 3).

  • Consumer categories held well and absorbed price hikes, showing strength across categories (Anil Rai Gupta, page 3).

  • Renewables business continued rapid scaling with robust growth, leveraging sector tailwinds, now reported as a separate segment (Anil Rai Gupta, page 3).

  • Management is confident in achieving good growth in the international and overall switchgear segment in Q2 (Rajiv Goel, page 4).

  • Successfully implemented calibrated and staggered price hikes across categories to offset raw material inflation (Anil Rai Gupta, page 3, 9).

Concerns

  • Inflationary pressures and uncertainties from the West Asia situation impacted the quarter (Anil Rai Gupta, page 3).

  • Delayed onset of summer restricted the full benefit for cooling products demand (Anil Rai Gupta, page 3).

  • Front-loading of brand building investments (advertising spends more than doubling year-on-year) impacted quarter profitability (Anil Rai Gupta, page 3).

  • Switchgear segment experienced a 4% decline in sales year-on-year and a margin dip, partly due to West Asia export disruptions and raw material volatility (Sonali, page 9-10).

  • Cable volumes were largely flat or low single-digit, despite capacity coming in, attributed to raw material volatility and distribution strategy changes (Rajiv Goel, page 7; Ashish Jain, page 16).

What they filed

Q1 FY27: revenue up 19.5%, net profit down 16.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4,539 4,889 6,544 5,455 4,779 +5%5,588 +14%6,705 +2%6,518 +19%
EBITDA375 426 757 516 438 +17%516 +21%729 −4%466 −10%
Net profit268 278 517 348 318 +19%300 +8%723 +40%290 −17%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Switchgear
    -4% Sales Growth260 bps Margin Erosion15% International Business Share37% Normalized Contribution Margin
  • Renewables
    — Revenue Growthnewly reported segment Segment Status
  • Cables
    — Volume Growth5-20 % Price Increase Range
  • Lloyd (Air Conditioners)
    — Volume Growth— Value Growthhigh single digits % Contribution Margin
  • Overall A&P Spend
    ₹700 Cr FY27 Budget₹800 Cr FY27 Budget (Upper)2.7% Long-term % of Revenue2.5-3 % Long-term % of Revenue (Range)

Capital allocation

high confidence
  • Capex ₹1,400 Cr
    • Cables and wires business ₹800 Cr
    • New R&D center ₹200 Cr
    • Other businesses ₹400 Cr
    Okay. Second question, sir, is related to the capex, nearly around INR1,400-odd crores of capex for '27, what you had given in the press release. Can you give us some color on the bifurcation on the segment-wise, where it is going for a full year in this number? Look, the bigger part of that is going into the cables and wires business, almost about INR800 crores. About INR200 crores is going into the new R&D center. The rest is all divided into other business.

Guidance & targets

Profitability

  • Overall Margins Profitability · coming quarters · High confidence healthy outlook
    We expect the demand environment to improve further and have a healthy outlook on the margins.

    — Anil Rai Gupta

  • Renewables Margins Profitability · coming quarters · Medium confidence improvement
    And as we move more towards the consumer side of the business, we are expecting improvement in the margins on the renewable side as well.

    — Rajiv Goel

A&P Spend

  • A&P as % of Revenue A&P Spend · current year · High confidence 2.7%
    And look, our long-term average has been around close to 2.7% of revenue as a company as a whole. I'm not getting into consumer otherwise. We expect that to remain the same even for the current year.

    — Rajiv Goel

  • A&P as % of Revenue (Long-term) A&P Spend · 4 to 5 years · High confidence 4-5 years consistent
    But as a percentage of revenue of consumer products, I think over a longer period of time, 4 to 5 years, we will be remaining consistent.

    — Anil Rai Gupta

  • Full Year Budget A&P Spend · full year · High confidence INR700-800 crores
    Yes, somewhere around that number. [in response to 'north of INR700 crores, INR800 crores?']

    — Anil Rai Gupta

  • Lloyd A&P Spend A&P Spend · next couple of years · High confidence elevated
    So the way we look at it is that Lloyd spends on A&P will remain elevated for the next couple of years because there is a dual requirement of also premiumizing the brand in the product categories, the kind of quality and the features that we give in our products need to be communicated to the consumers for a longer period of time.

    — Anil Rai Gupta

Renewables

  • Segment Growth Renewables · internally · High confidence continue to grow well
    we are hoping internally that we should continue to grow well in this category because this is a strong economic imperative for renewables in India

    — Anil Rai Gupta

  • Segment Size Renewables · Medium confidence larger segment
    So we are very positive on this, and we expect it to become a larger segment.

    — Anil Rai Gupta

Price Hikes

  • Average Price Hike Price Hikes · High confidence 7-8%
    But generally speaking, 7% to 8% would be the right price hike, average if we take it.

    — Anil Rai Gupta

Lloyd

  • Contribution Margin Lloyd · sooner than later · Medium confidence double digits
    I think except the non-seasonal quarters of second and third quarter, but we should be seeing double digit sooner than later. All this has happened also due to the volatility and timing differences between passing price hikes and all that. But otherwise, in full quarters, we will definitely see it coming back to double digits.

    — Anil Rai Gupta

Switchgear

  • Demand Switchgear · second quarter · Medium confidence coming back
    I think it has fairly stabilized, which should mean that the demand should be coming back from the second quarter.

    — Anil Rai Gupta

  • Domestic Demand Switchgear · High confidence remain stable
    but at least the domestic demand will remain stable from here. It seems so.

    — Anil Rai Gupta

Cables

  • Capacity & Sales Cables · High confidence increasing
    on the cables, I think we are on the planned track of increasing capacities and increasing sales.

    — Anil Rai Gupta

What to watch in Q2 FY27

Switchgear segment rebound

Q2 FY27
Current 4% YoY sales decline, margin erosion in Q1 FY27
Target Good growth in international and overall switchgear segment

Why it matters

Switchgear is a high-margin segment, and its recovery is crucial for overall profitability and growth.

The international business is normally 15%, but it varies from quarter-to-quarter. And that's why it has been impacted, but we are expecting this to rebound this quarter... So we are very confident that Q2 will see a good growth in the international and overall switchgear segment.

Risks & concerns

  • Inflationary pressures

    medium

    Demand was resilient despite inflationary pressures in Q1 FY27.

    Management acknowledged

  • West Asia geopolitical situation

    medium

    Uncertainties arising from the West Asia situation impacted Q1 FY27 performance, particularly switchgear exports.

    Management acknowledged

  • Raw material volatility

    medium

    Significant raw material inflation required calibrated price hikes; volatility impacted switchgear and cable segments.

    Management acknowledged

  • Impact of increased A&P spend on profitability

    medium

    Front-loading of brand building investments (more than doubling YoY) impacted Q1 profitability, but expected to normalize.

    Management acknowledged

  • Delayed summer onset

    low

    Delayed onset of summer restricted the full benefit for cooling products demand in Q1 FY27.

    Management acknowledged

  • Market share loss in wires and cables

    low

    Analyst suggested consistent market share loss to competitors in wires and cables; management attributed flat volumes to distribution strategy changes and raw material volatility, focusing on sell-out.

    Analyst downplayed

Q&A highlights

4 direct, 1 evasive
Switchgear segment performance, export disruptions, and margin erosion Partial
The international business is normally 15%, but it varies from quarter-to-quarter. And that's why it has been impacted, but we are expecting this to rebound this quarter. It primarily happened because there are no vessels going, but things have considerably eased since then. So we are very confident that Q2 will see a good growth in the international and overall switchgear segment.

Analyst highlighted a 260 bps margin erosion and impact from West Asia, prompting management to explain the international component and express confidence in a Q2 rebound.

Asked by Balasubramanian

Renewables segment margin impact and product mix shift Partial
Solar pumps still is not very significant in this. I think that should come in the ensuing quarters. And largely, it has been because there has been a strong demand on the panel side. And as you know, panels have slightly lower margin than the inverters.

Analyst questioned the margin impact in renewables due to product mix (solar pumps vs. modules), and management clarified the current driver and future expectations.

Asked by Balasubramanian

Volume vs. pricing growth in Lloyd, ECD, and Cables amidst intense competition Partial
We do believe that we have taken the right steps towards price hikes, keeping an eye on market shares as well as the fact that we have been making some improvements in our distribution policy wherein a lot of focus has been ensuring that we do not unnecessarily load the channel and basically improving their return on capital.

Analyst probed if growth lagged due to sharper price hikes and asked about the right mix between volume and pricing given competition. Management emphasized calibrated price hikes and distribution improvements.

Asked by Natasha Jain

A&P budget for the full year and its lumpiness Direct
Yes, somewhere around that number. [in response to 'north of INR700 crores, INR800 crores?'] And look, our long-term average has been around close to 2.7% of revenue as a company as a whole. I'm not getting into consumer otherwise. We expect that to remain the same even for the current year.

Analyst sought specific A&P budget guidance for FY27 and clarification on whether the increased spend is episodic or a new base. Management provided a range and reiterated long-term percentage of revenue.

Asked by Umang Mehta

Lloyd's contribution margin returning to double digits Direct
No, no. I think except the non-seasonal quarters of second and third quarter, but we should be seeing double digit sooner than later. All this has happened also due to the volatility and timing differences between passing price hikes and all that. But otherwise, in full quarters, we will definitely see it coming back to double digits.

Analyst questioned the timeline for Lloyd's contribution margin to return to double digits from high single digits, given competitive dynamics. Management expressed confidence for non-seasonal quarters.

Asked by Siddhartha Bera

Switchgear sales decline and margin dip in Q1 FY27 Direct
No, I think one is not only the West Asia crisis, but it's also switchgear is one of those business where, again, volatility of raw materials was high and it impacted the entire passing on. And I would say because of this volatility in raw materials, there was also confusion amongst the trade also on buying products. I think it has fairly stabilized, which should mean that the demand should be coming back from the second quarter.

Analyst highlighted the concerning 4% YoY sales decline and margin dip in the highest margin segment. Management attributed it to West Asia crisis, raw material volatility, and trade confusion, expecting a Q2 rebound.

Asked by Sonali

Flat cable volumes despite capacity expansion and potential market share loss Direct
I think I've given this in a lot of answers that while our capacity utilization has been high, some part of the cables is also affected by the raw material fluctuation, which also means that sometimes the sell-in seen becomes slower when the raw materials are fluctuating heavily. So it's not everything is going to projects because there's a lot of dealer sales also in cables. So when the raw materials start going down, the dealers start selling out from their own stocks rather than picking from the company. So there are a lot of factors. I don't think you should look at one quarter.

Analyst questioned why cable volumes were flat despite prior capacity issues and new capacity coming online, implying potential market share loss. Management explained it was due to raw material volatility impacting sell-in and dealer inventory management.

Asked by Ashish Jain

Confidence in overall growth (volume vs. pricing) Evasive
I'm always confident. [in response to 'is this confidence stemming from the price increases that have happened across categories? Or are you also feeling more confident about volume growth going forward?'] I'm always confident about Havells growth. [in response to 'About, sir? Volume growth or it's the pricing growth that is going?']

Analyst tried to ascertain if management's confidence in growth was driven by price increases or actual volume growth, but management gave a general, evasive response.

Asked by Pulkit Patni

3 min read 6 chapters

Detailed narrative

Q1 FY27 Performance Overview and Macro Factors

Havells India Limited reported strong revenue growth in the first quarter of FY27, demonstrating resilient demand despite prevailing inflationary pressures and geopolitical uncertainties in West Asia. However, the quarter's profitability was impacted by a significant front-loading of brand-building investments, with advertising spends more than doubling year-on-year. The company undertook calibrated and staggered price hikes across categories to offset raw material inflation, which management believes were successful in maintaining market share.

Segmental Performance Highlights

Consumer categories, including cooling products, held up well and absorbed price hikes, though a delayed summer onset restricted the full benefit for cooling products. The Renewables business showed robust growth and has been established as a separate reporting segment, leveraging sector tailwinds. The switchgear segment experienced a 4% year-on-year sales decline and margin erosion, primarily due to West Asia export disruptions and raw material volatility, but management expects a rebound in Q2. Cable volumes remained largely flat, attributed to raw material volatility and strategic distribution changes, while Lloyd's air conditioner volume growth was in single digits, with higher value growth due to price hikes.

Pricing Strategy and Margin Outlook

Management confirmed that pricing has stabilized in the lighting segment, with potential for price hikes due to electronics costs. Across categories, average price hikes ranged from 7% to 8%, with some categories like cables seeing 5% to 20% increases due to direct correlation with copper and aluminum prices. The company aims to stabilize contribution margins and expects overall margins to improve in the coming quarters, particularly in the renewables segment as it shifts towards consumer-side business. Lloyd's contribution margin is also expected to return to double digits outside of non-seasonal quarters.

Advertising and Brand Building Investments

Havells significantly stepped up its brand-building efforts in Q1 FY27, with advertising spends more than doubling year-on-year. This front-loading of investments, particularly for seasonal products, impacted short-term profitability but is expected to normalize over the rest of the year. The full-year A&P budget is projected to be between INR700-800 crores, maintaining a long-term average of 2.5% to 3% of revenue, with Lloyd's A&P spend expected to remain elevated for the next couple of years to premiumize the brand and communicate product features.

Capital Expenditure Plans

The company has planned a capital expenditure of approximately INR1,400 crores for FY27. A significant portion, around INR800 crores, is allocated to the cables and wires business for capacity expansion. Additionally, about INR200 crores is earmarked for a new R&D center, with the remaining amount distributed across other businesses. Management indicated that the cables segment is on track with increasing capacities and sales.

Distribution Strategy and Market Share

Havells has implemented changes in its distribution strategy, focusing on becoming more of a 'sell-out' brand rather than 'sell-in'. This approach aims to improve channel partners' return on capital and ensure healthy inventory levels. While this strategy, combined with raw material volatility, may have impacted sell-in volumes in Q1, particularly for cables, management believes it will lead to sustained growth and market share gains in the long term. The company is confident in its ability to maintain or gain market share across categories.

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