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Elevated channel inventory may take months to normalize
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Havells India Limited — Q1 FY26
Havells India reported a challenging Q1 FY26 with weak summer demand and subdued consumer sentiment, leading to a sharp decline in cooling products (fans, coolers, ACs) against a strong base.
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Havells India reported a challenging Q1 FY26 with weak summer demand and subdued consumer sentiment, leading to a sharp decline in cooling products (fans, coolers, ACs) against a strong base. However, infrastructure-driven demand boosted cables and wires, which saw ~20% volume growth and ~27% value growth, with contribution margins in the 14-15% range. Management described the quarter as transitory and expects recovery in H2, aided by festive season and inventory normalization. The company announced INR 340 crore additional CapEx for cable capacity and INR 600 crore investment in Goldi Solar to expand renewable portfolio. Key risks include elevated channel inventory that may take months to clear and potential margin pressure from competitive discounting in Lloyd's AC segment.
हैवेल्स इंडिया ने वित्त वर्ष 2026 की पहली तिमाही में कमजोर गर्मी और घटी हुई खरीदारी के कारण मुश्किलों का सामना किया। पंखे, कूलर और एसी जैसे ठंडे उत्पादों की बिक्री पिछले साल के मुकाबले काफी गिर गई। लेकिन बुनियादी ढांचे के कामों से केबल और तारों की मांग बढ़ी, जिसमें मात्रा में 20% और कीमत में 27% का उछाल आया। कंपनी का कहना है कि यह अस्थायी स्थिति है और साल की दूसरी छमाही में त्योहारों और स्टॉक सामान्य होने से सुधार होगा। उन्होंने केबल क्षमता बढ़ाने के लिए 340 करोड़ रुपये और सौर ऊर्जा कंपनी गोल्डी सोलर में 600 करोड़ रुपये का निवेश किया है। जोखिमों में दुकानों में जमा अतिरिक्त स्टॉक और लॉयड एसी पर छूट से मुनाफा कम होना शामिल है।
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Cables & Wires Volume Growth
~20%
+20% YoY
Volume growth driven by infrastructure and industrial demand, with similar growth in both cables and wires.
Cables & Wires Value Growth
~27%
+27% YoY
Value growth outpaced volume due to product mix and pricing; contribution margins maintained at 14-15%.
Solar Business Revenue (FY25)
INR 500 Cr
N/A
Management targets solar revenue to cross INR 1,000-1,500 crore in the next couple of years.
Rural Revenue Share
5-6%
Flat YoY
Rural contributes 5-6% of consumer product revenues; growing faster than urban but from a small base.
What Changed vs Last Quarter
NEW
Cable capacity doubling by FY27
Havells is doubling underground cable capacity from FY24 to FY27 with additional CapEx of INR 340 crore announced this quarter.
NEW
Solar revenue target of INR 1,000-1,500 crore
Management expects solar business revenue to cross INR 1,000-1,500 crore in the next couple of years, up from ~INR 500 crore in FY25.
NEW
Switchgear contribution margin target 38-40%
Management aims to maintain switchgear contribution margins in the 38-40% range, with sequential improvement expected.
NEW
Cables & wires contribution margin aspiration 14-15%
Management expects cables and wires contribution margins to remain in the 14-15% range, with potential upside from operating leverage.
DROPPED
Havells ex-Lloyd EBITDA margin target of 13-14.5%
Management expects Havells (excluding Lloyd) to return to normalized EBITDA margins of 13% to 14.5% driven by operating leverage.
DROPPED
INR 2,000 crore CapEx over next two years
Total capital expenditure of approximately INR 2,000 crore planned over the next two years, including a new R&D center.
DROPPED
Lloyd to continue investing for growth
Lloyd will maintain investments in brand, distribution, and product development, with no specific margin guidance due to ongoing investment phase.
NEW RISK
Elevated channel inventory may take months to normalize
High inventory levels in ACs, fans, and coolers due to weak summer demand could take a few months to clear, pressuring near-term sales and pricing.
NEW RISK
Potential price discounting in Lloyd ACs
Analyst raised concern about competitive discounts; management stated they avoid short-term discounting but inventory overhang may force price cuts.
NEW RISK
BEE norm transition risk for AC inventory
New BEE norms effective January 2026 could require liquidation of older inventory, potentially impacting margins in coming quarters.
NEW RISK
Subdued consumer demand in core categories
Tepid consumer demand in switchgear, lighting, and ECD (excluding cooling) persisted; recovery dependent on festive season and real estate pickup.
RISK GONE
Delayed summer impacting cooling product sales
A delayed summer in Q4 FY25 led to muted growth in fans and air conditioners, with potential impact on Q1 FY26 primary sales if secondary demand remains weak.
RISK GONE
Commodity price volatility and margin pressure
Continued volatility in copper and other raw material prices, driven by global uncertainties, poses an overhang on margins, especially in cables and wires.
RISK GONE
New entrants in cables and wires could intensify competition
Two large groups have announced entry into cables and wires, potentially increasing competition and pressuring pricing or distribution margins.
RISK GONE
Lloyd profitability trajectory uncertain due to ongoing investments
Management refrained from providing margin guidance for Lloyd, citing continued investments in brand, distribution, and new product categories like refrigerators.
🤫 Topics management stopped discussing
Mentioned in Q2 FY25, Q3 FY25
Switchgear EBIT margins expected to recover to 23-24% from current 18% as plant relocation and mix issues resolve.
Mentioned in Q3 FY25, Q4 FY25
Total capital expenditure of approximately INR 2,000 crore planned over the next two years, including a new R&D center.
Mentioned in Q1 FY25, Q2 FY25
Management expects total CapEx of approximately INR 1,000 crore for FY25, with INR 350 crore already incurred in H1.
Mentioned in Q2 FY25, Q4 FY25
Continued volatility in copper and other raw material prices, driven by global uncertainties, poses an overhang on margins, especially in cables and wires.
Mentioned in Q1 FY25, Q3 FY25
Consumer demand showed weakness around Diwali and recovery is uncertain; if weakness persists, revenue growth may be impacted.
Fast read
Guidance and risk preview
Havells is doubling underground cable capacity from FY24 to FY27 with additional CapEx of INR 340 crore announced this quarter.
High inventory levels in ACs, fans, and coolers due to weak summer demand could take a few months to clear, pressuring near-term sales and pricing.
View Risks →