Detailed Narrative
Q3 FY26 Overall Performance and Drivers
Havells India Limited reported a healthy overall performance in Q3 FY26, with revenue growing by 14% year-on-year and EBITDA increasing by 21% year-on-year. This growth was primarily driven by an accelerated cables business, which saw over 20% volume expansion, coupled with commodity price inflation. The company also observed a healthy uptick in demand for heating products during the festive season, contributing to the Electrical Consumer Durables (ECD) segment's 4% growth.
Segmental Highlights: Cables, ECD, and Solar
The cables and wires business demonstrated robust volume growth exceeding 20%, with cables capacity utilization at 90-100% and wires at 65-70%. The ECD segment's 4% growth was largely volume-driven, particularly by winter products like Oil Filled Radiators (OFR) and water heaters. The 'Other' segment, primarily solar, showed very good growth, especially in modules, and management expressed a positive outlook for both revenue growth and margin expansion in this category, targeting early double-digit to high single-digit margins.
Margin Dynamics and Cost Management
Despite overall EBITDA growth, the company noted that margins were impacted by an exceptional item📎 of INR45 crores due to additional provisioning for new labour codes. Management acknowledged industry headwinds🌐 such as commodity price inflation, BEE changes, and e-waste regulations. They are implementing calibrated price hikes, with an expected 5-10% increase for Lloyd in Q4 FY26, and focusing on enhancing operational efficiency and cost rationalization to improve margins.
Capital Expenditure and Strategic Investments
Havells has incurred INR1,200 crores in capex over the first nine months of FY26. For the coming year, an additional INR1,000 crores is planned, primarily for continued expansion in cables and wires and a new R&D center. The company also highlighted its strategic investment of INR600 crores in Goldi Solar to ensure a steady supply of modules, with Goldi Solar undertaking backward integration into cell manufacturing, while Havells itself does not plan to manufacture modules.
Market Share and Competitive Landscape
Management believes Havells has maintained or gained market share in most core categories, including lighting, small domestic appliances, and water heaters, and that its wires market share remains intact. They acknowledged the challenging environment for cooling products and the impact of hypercompetitiveness, unorganized, and regional players gaining market share in the FMEG segment due to post-COVID demand cycles and inflationary pressures.
Outlook and Key Challenges
Havells remains optimistic about a gradual recovery in demand but is cognizant of ongoing industry headwinds🌐. The company is actively managing channel inventory, particularly for Lloyd, which is normalizing and expected to clear in the upcoming season. Export opportunities for cables, especially to the US, have been affected by tariffs this year, but the company continues to explore new international markets. Management emphasized a balanced approach to growth and profitability, without setting specific quantifiable targets for the long term.