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Havells India Limited — Q3 FY25
Havells India reported a mixed Q3 FY25.
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Havells India reported a mixed Q3 FY25. Consumer, industrial, and infrastructure segments performed well, but commodity fluctuations impacted domestic wire growth, leading to moderate overall revenue. The Tumkur cable plant drove strong cable revenue growth. Switchgear margins declined due to a mix shift toward project business and plant relocation under-absorption, expected to normalize. Lighting delivered steady growth with 13-14% volume growth and margin improvement. ECD margins were pressured by higher small domestic appliance mix and channel investments. Management guided for ex-Lloyd segment margins of 12-13% in FY26 and expects normalization in switchgear margins to 23-24%. A INR 480 crore CapEx for a refrigerator plant was announced. Risks include sustained consumer demand weakness and competitive pricing pressure in lighting.
हैवेल्स इंडिया ने तीसरी तिमाही में मिला-जुला प्रदर्शन दिखाया। घरेलू, औद्योगिक और बुनियादी ढांचे के कारोबार ने अच्छा किया, लेकिन कच्चे माल की कीमतों में उतार-चढ़ाव से तारों का कारोबार प्रभावित हुआ, जिससे कुल आय मध्यम रही। तुमकुर केबल प्लांट से केबल की बिक्री में जोरदार बढ़ोतरी हुई। स्विचगियर का मुनाफा प्रोजेक्ट कारोबार और प्लांट शिफ्टिंग के कारण घटा, लेकिन जल्द सामान्य होने की उम्मीद है। लाइटिंग में 13-14% मात्रा बढ़ोतरी और मुनाफा सुधरा। छोटे घरेलू उपकरणों की बिक्री बढ़ने से ईसीडी का मुनाफा दबाव में रहा। कंपनी ने अगले साल लॉयड को छोड़कर 12-13% मुनाफा और स्विचगियर में 23-24% मुनाफा सामान्य होने का अनुमान जताया। फ्रिज प्लांट के लिए 480 करोड़ रुपये का निवेश तय हुआ। जोखिमों में कमजोर मांग और लाइटिंग में प्रतिस्पर्धी दबाव शामिल हैं।
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Sustained consumer demand weakness
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Lighting Volume Growth
13-14%
+13-14% YoY
Lighting volume grew 13-14% YoY, with price erosion bottoming out.
Cable Volume Growth
11-12%
+11-12% YoY
Cable volume grew 11-12% YoY, driven by Tumkur plant ramp-up.
Switchgear Normalized EBIT Margin
23-24%
N/A
Management expects switchgear EBIT margins to normalize to 23-24% from current 18%.
ECD Normalized Contribution Margin
24-24.5%
N/A
ECD contribution margins expected to normalize to 24-24.5%.
What Changed vs Last Quarter
NEW
Ex-Lloyd segment margins of 12-13% in FY26
Management guided for ex-Lloyd EBITDA margins of 12-13% in FY26, with normalization expected in the coming year.
NEW
Switchgear margins to normalize to 23-24%
Switchgear EBIT margins expected to recover to 23-24% from current 18% as plant relocation and mix issues resolve.
UPDATED
INR 480 crore CapEx for refrigerator plant
New refrigerator manufacturing facility in Ghiloth, Rajasthan with INR 480 crore investment to become a full-stack consumer durable player.
UPDATED
CapEx of INR 1,000 crore for current and next year
Total CapEx of INR 1,000 crore planned for FY25 and FY26, with 3/4th allocated to cables and refrigerator plant.
DROPPED
Cables & Wires margins to normalize by Q4 FY25
Management expects cables and wires margins to return to normalized levels by Q4 FY25, assuming no further commodity volatility.
DROPPED
Lighting pricing bottoming out by Q4 FY25
Management expects lighting pricing to bottom out by Q4 FY25, with real growth returning in FY26.
DROPPED
Switchgear margins to remain 22-25%
Management expects switchgear EBIT margins to remain in the 22-25% range over the medium term.
NEW RISK
Sustained consumer demand weakness
Consumer demand showed weakness around Diwali and recovery is uncertain; if weakness persists, revenue growth may be impacted.
NEW RISK
Competitive pricing pressure in lighting
LED pricing deflation continues across technologies including COB, pressuring margins despite volume growth.
NEW RISK
Switchgear margin recovery may be slower than expected
Switchgear margins have declined for three consecutive quarters; structural shift toward project business could limit margin recovery.
RISK GONE
Commodity price volatility impacting margins
Fluctuations in copper and other raw material prices could continue to pressure cables and wires margins if volatility persists.
RISK GONE
Slow industrial demand recovery
Industrial switchgear and B2B segments are experiencing degrowth, and a delayed recovery could weigh on overall growth.
RISK GONE
Festive demand may be restocking-led
Analyst raised concern that strong festive demand could be driven by channel restocking rather than end-consumer demand, which may not sustain.
RISK GONE
Employee cost growth may persist
Employee costs have been rising 20-25% annually due to investments in R&D and channel expansion, which could pressure margins if revenue growth slows.
🤫 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 guided for ex-Lloyd EBITDA margins of 12-13% in FY26, with normalization expected in the coming year.
Consumer demand showed weakness around Diwali and recovery is uncertain; if weakness persists, revenue growth may be impacted.
View Risks →