GuruFocus News
This article first appeared on GuruFocus.
-
Revenue: Grew 35% year-on-year in Q2 FY27, with growth across all categories including cables, switchgears, and renewables.
-
Contribution Margins (Cables): Softer year-on-year due to decline in aluminum prices; H1 cable contribution margins approximately 15%, broadly in line with long-term average.
-
Contribution Margins (Rest of Portfolio): Held up well, supported by pricing actions offsetting raw material inflation.
-
Lloyd Revenue: Healthy growth supported by both volume and value growth.
-
Lloyd Margins: Remained subdued due to raw material inflation and seasonal under-absorption during the off-season.
-
EBITDA: Grew approximately 30%, supported by operating leverage.
-
EBIT: Growth relatively moderate, primarily due to higher base from a one-time gain in other income in the corresponding period last year.
-
Warning! GuruFocus has detected 2 Warning Signs with BOM:517354.
-
Is BOM:517354 fairly valued? Test your thesis with our free DCF calculator.
Release Date: October 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Revenue grew 35% year-on-year in Q2 FY27, with healthy contributions from both established and emerging categories.
-
Consumer demand remained steady despite the inflationary environment.
-
Switchgear volume growth was healthy at close to double-digits, with contribution margins returning to normalized levels of 38-40%.
-
Lloyd delivered healthy revenue growth supported by both volume and value growth, with distribution changes now settling down.
-
Renewables segment scaled up healthily in both top-line and margins, with a focus on building brand and distribution stickiness.
Negative Points
-
Contribution margins were softer year-on-year, primarily due to a decline in aluminum prices impacting the cables segment.
-
Lloyd margins remained subdued due to raw material inflation and seasonal under-absorption during the off-season.
-
EBIT growth was relatively moderate due to a higher base from a one-time gain in other income last year.
-
Cables and wires segment is more commoditized and aluminum-heavy, with competitive intensity higher in low voltage cables.
-
New competitors in the wires segment could lead to irrational behavior and pressure on pricing and margins in the near term.
Q & A Highlights
Q: With two new competitors (Crompton and Ultraviolette) entering the wires segment, will Havells prioritize shelf space or profitability, and could industry pricing discipline come under pressure? A: Anil Gupta (Chairman & MD) noted that new organized entrants typically take share from the unorganized sector, which has been growing due to inflation. While irrational behavior from new competition could affect market shares temporarily, Havells will rely on product launches, deep distribution relationships, and influencer management to retain share. He acknowledged a possible slight compromise on contribution margins but stressed it is early days and Havells will strive to improve market share after recently achieving industry-leading growth in wires.
