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Havells India Limited — Q1 FY25
Havells India reported a strong Q1 FY2025, driven by a favorable summer boosting cooling products like ACs, fans, and air coolers.
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Havells India reported a strong Q1 FY2025, driven by a favorable summer boosting cooling products like ACs, fans, and air coolers. The ECD segment grew 20%, while cables saw double-digit growth, though wires revenue was impacted by channel destocking due to sharp commodity price declines in June. Lloyd's profitability improved to 3.5% EBIT margins, aided by cost efficiencies and operating leverage, though management emphasized continued investment in brand building and R&D. The company maintained its capex guidance of INR 800-900 crore for FY2025, with significant allocation to cable capacity expansion. Management expressed cautious optimism on consumer demand recovery, noting improved sentiment but refraining from calling it sustainable. Key risks include sustained weak consumer demand in ECD and competitive intensity in switches and switchgear.
हैवेल्स इंडिया ने पहली तिमाही (अप्रैल-जून 2024) में अच्छा प्रदर्शन किया। गर्मी बढ़ने से एसी, पंखे और कूलर जैसे कूलिंग उत्पादों की बिक्री बढ़ी। इलेक्ट्रिकल कंज्यूमर ड्यूरेबल्स (ECD) सेगमेंट में 20% की बढ़ोतरी हुई। केबल की बिक्री भी दोहरे अंकों में बढ़ी, लेकिन तारों की बिक्री पर असर पड़ा क्योंकि जून में कच्चे माल की कीमतें गिरने से डीलरों ने स्टॉक कम किया। लॉयड का मुनाफा बेहतर हुआ और EBIT मार्जिन 3.5% रहा, जिसमें लागत बचत और बेहतर परिचालन से मदद मिली। कंपनी ने ब्रांड और रिसर्च पर खर्च जारी रखने की बात कही। हैवेल्स ने पूरे साल के लिए 800-900 करोड़ रुपये के पूंजीगत खर्च का अनुमान बनाए रखा है, जिसमें ज्यादातर केबल क्षमता बढ़ाने पर खर्च होगा। कंपनी को उम्मीद है कि ग्राहकों की मांग धीरे-धीरे सुधरेगी, लेकिन इसे स्थायी नहीं माना जा रहा। मुख्य जोखिम हैं - ECD में कमजोर मांग और स्विच व स्विचगियर में बढ़ती प्रतिस्पर्धा।
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Sustained weak consumer demand in ECD
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ECD Segment Revenue Growth
20%
+20% YoY
ECD segment grew 20% year-over-year, driven by strong summer demand for fans and cooling products.
Lloyd's EBIT Margin
3.5%
+70bps QoQ
Lloyd's EBIT margin improved to 3.5% in Q1 from 2.8% in Q4, aided by operating leverage and cost efficiencies.
AC Contribution to Lloyd Revenue
85%
N/A
Air conditioners contributed approximately 85% of Lloyd's revenue in Q1, reflecting seasonal strength.
Capex Guidance FY2025
INR 800-900 Cr
N/A
Management maintained capex guidance of INR 800-900 crore for FY2025, with 30-40% allocated to cables.
What Changed vs Last Quarter
NEW
Lloyd's profitability to improve over time
Management expects continued improvement in Lloyd's profitability driven by premiumization, cost efficiencies, and operating leverage, but did not provide a specific margin target.
NEW
Export approvals to be completed in 9-12 months
Management expects to have a full bouquet of approvals for cables and HVAC exports to the US within 9-12 months.
UPDATED
Capex of INR 800-900 crore for FY2025
Management maintained capex guidance of INR 800-900 crore for FY2025, with 30-40% allocated to cable capacity expansion.
DROPPED
Cable capacity commissioning in June 2024
New cable capacity will be commissioned in June 2024, with benefits expected in the second half of FY25.
DROPPED
Potential price increases in Q1 FY25
Management indicated that price increases may be taken in Q1 FY25 across product categories due to rising raw material costs, but will balance growth and market share.
NEW RISK
Sustained weak consumer demand in ECD
Management expressed caution on consumer demand recovery, noting that the strong Q1 growth may be a one-off due to summer and low base, and underlying demand remains uncertain.
NEW RISK
Competitive intensity in switches and switchgear
Analyst raised concern about increased competition from national players offering longer credit periods and wider SKU ranges, which could pressure margins.
NEW RISK
Raw material volatility impacting wires revenue
Sharp commodity price decline in June 2024 led to channel destocking, impacting wires revenue. Management noted normalization in July but risk remains if volatility continues.
RISK GONE
Raw material inflation and pricing pressure
Rising commodity prices (copper, etc.) may compress margins if price hikes cannot be fully passed on, especially in competitive segments like fans and ACs.
RISK GONE
Lloyd's AC market share loss
Lloyd's Q4 AC sales grew only 6% vs industry ~20%, raising concerns about market share erosion. Management attributed this to inventory normalization and a focus on sell-out, but the trend bears watching.
RISK GONE
Competition in switches from unbranded players
Analyst noted that brands like GM, Goldmedal, Anchor are gaining traction, and Havells may have lost share in switches. Management claimed recent market share recovery, but competitive pressure remains.
🤫 Topics management stopped discussing
Mentioned in Q2 FY24, Q3 FY24, Q4 FY24
New cable capacity will be commissioned in June 2024, with benefits expected in the second half of FY25.
Mentioned in Q2 FY24, Q3 FY24
Lloyd's profitability will improve through multiple cost levers including procurement efficiency, plant optimization, and premiumization.
Mentioned in Q1 FY24, Q2 FY24
Increased competition and discounting in the ECD segment, especially fans, could pressure margins and market share.
Fast read
Guidance and risk preview
Management maintained capex guidance of INR 800-900 crore for FY2025, with 30-40% allocated to cable capacity expansion.
Management expressed caution on consumer demand recovery, noting that the strong Q1 growth may be a one-off due to summer and low base, and underly...
View Risks →