Havells India , a leading electrical equipment manufacturer, delivered a mixed performance in the second quarter of fiscal year 2026, facing headwinds in its summer product segment while maintaining growth in other areas.

Key Highlights

• Overall performance deemed 'decent' despite challenges in summer products
• Cables business maintained steady growth momentum
• LED lighting showed signs of stabilization and initial pickup in residential demand
• Higher working capital levels impacted cash balances and interest income
• Management optimistic about second half performance following GST rate reductions

Summer Product Segment Faces Headwinds

The company experienced weakness in its summer product category, with air conditioners, fans, and coolers seeing a year-on-year revenue decline. This was attributed to a shorter summer season and elevated channel inventories. Havells has been working closely with its channel partners to increase consumer offtake and expects channel inventories to normalize by the end of Q3.

Cables Business Continues Strong Performance

The cables segment maintained its steady growth momentum, driven primarily by strong performance in power cables. In line with its expansion strategy, Havells acquired a 39-acre land parcel adjacent to its existing manufacturing facility in Alwar, Rajasthan, to support capacity expansion in this segment.

Lighting and Consumer Durables

The LED lighting segment showed signs of price stabilization and an initial pickup in residential demand, which bodes well for the business going forward. In the Lloyd segment, which includes consumer durables, the company faced significant decline in contribution margins due to customer support schemes offered to clear channel inventories. These schemes have since been withdrawn following GST changes.

Financial Impact and Outlook

Higher working capital levels, especially in the cables and Lloyd segments, led to a reduction in cash and bank balances, impacting the interest income earned during the quarter. While the company expects working capital to normalize by Q4, other income is likely to remain relatively low in H2, considering the planned capital expenditure.

Management Commentary

Anil Rai Gupta, Chairman and Managing Director of Havells India, stated, "We have delivered a decent overall performance. However, the summer products experienced weakness with overhang of shorter summer and higher channel inventories. We are confident that the channel inventories will normalize by the end of Q3."

Future Outlook

The management remains optimistic about the company's performance in the second half of the fiscal year, buoyed by recent GST rate reductions on air conditioners, TVs, and solar products. Havells has outlined a capital expenditure plan of INR 1,450.00 crores for FY26 and an estimated INR 1,000.00 crores for FY27, with a focus on its premiumization strategy across product categories.

Financial Data

As Havells India navigates through these challenges and opportunities, investors and market watchers will be keenly observing the company's ability to normalize inventories, capitalize on the festive season demand, and leverage its expansion plans to drive growth in the coming quarters.

Havells India , a leading electrical equipment manufacturer, has reported a mixed performance in its latest quarterly results, with revenue growth falling short of expectations but net profit surpassing estimates.

Financial Highlights

Havells India has delivered a strong performance in terms of profitability, with its net profit rising to ₹319.00 crore, marking a significant 19.00% increase from ₹268.00 crore in the same quarter last year. This result exceeded analyst estimates of ₹305.00 crore, showcasing the company's ability to outperform market expectations in terms of bottom-line growth.

Revenue Growth and Market Position

The company's revenue grew to ₹4,779.00 crore, up from ₹4,539.00 crore in the corresponding quarter of the previous year, representing a 5.30% increase. However, this growth fell short of analyst estimates by 2% and consensus estimates by 1%. The revenue miss was primarily attributed to a steeper-than-expected decline in summer products, with the ECD (Electrical Consumer Durables) segment dropping 1.8% YoY and Lloyd declining 18.5% YoY.

Segment Performance

Despite the challenges in consumer-oriented segments, Havells India saw positive momentum in its B2B infrastructure products:

• Switchgears grew by 8.0% YoY
• Cables and wires expanded by 12.4% YoY

These segments helped offset some of the weakness in consumer products.

Operational Efficiency

Havells India's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) saw a substantial increase, rising to ₹438.00 crore from ₹375.00 crore in the year-ago period. This 16.80% growth in EBITDA demonstrates the company's improved operational efficiency and cost management strategies. However, it's worth noting that the EBITDA figure fell slightly short of the estimated ₹455.00 crore.

Margin Improvement

The EBITDA margin showed notable improvement, increasing to 9.17% from 8.26% in the same quarter last year. This 91 basis points expansion in margin reflects the company's ability to enhance profitability despite challenging market conditions. However, the margin remained below the estimated 9.50%, suggesting there may still be room for further optimization.

Analyst Outlook

Yes Securities has maintained its 'Add' rating on Havells India stock. The brokerage firm expects normalcy to return from Q4 onwards, indicating potential improvement in the company's performance in the coming quarters.

Conclusion

Havells India's Q2 results present a mixed picture, with strong profit growth but revenue falling short of expectations. The company's ability to grow its B2B segments and improve profitability demonstrates its resilience in a challenging market environment. While the consumer segments faced headwinds, the overall performance and positive analyst outlook suggest that Havells India remains well-positioned in the electrical equipment sector.

Investors and market watchers may view these results with cautious optimism, considering the company's ability to deliver profit growth despite revenue challenges. The expectation of normalcy returning in Q4 provides a potential catalyst for future growth.