Cables and wires save the day for Havells in Q3
Going ahead, cables and wires can be expected to remain Havells’ primary growth driver, with the management indicating around 20% volume growth, which will be aided by new capacity additions
Havells India Ltd’s consolidated revenue for the December quarter (Q3FY26) grew 14% year-on-year to ₹5,588 crore, but net profit growth was slower at 8% to ₹300 crore. An exceptional charge of ₹45 crore related to labour law adjustments hit earnings.
The cables and wires segment was the showstopper in Q3, contributing 40% of total revenue and clocking 32% growth. The segment contributed 80% to Havells’ incremental Q3 revenue, and helped offset the weakness in other segments.
Two factors supported cables growth. One, Havells took price hikes to cope with higher raw material costs, particularly copper and aluminium. Two, demand remained strong, leading to a sturdy over 20% volume growth. The cables manufacturing capacity utilisation is 90-100%, while that of wire is 65-70%, leaving scope for further volume growth as capacity expands.
Havells’ lighting and Lloyd Consumer were a drag. Lighting segment Q3 revenue fell 3.5% year-on-year, but earnings fell faster with Ebit margin dropping from 14.6% a year ago to 11%, led by intense competition and pricing pressure.
Lloyd Consumer, which includes room air conditioners (RACs), saw a 5.6% decline in revenue. The segment remains loss-making. High channel inventory in RACs hurt volumes and margin.
FY26 capex and what it means for future
The management sees capex tapering after FY26. Havells has incurred capex of about ₹1,200 crore in the nine months ended December (9MFY26). A large portion of this was directed toward cables & wires, aimed at expanding capacity to address near-peak utilisation levels. This is crucial as it supports Havells’ further growth in a scalable segment.
In addition, major capex for the Lloyd Consumer was largely completed during FY26, with the management indicating that only limited incremental spending will be required hereon. Havells also initiated investments in a new R&D centre in FY26, with spending continuing into FY27 to support long-term product development and operational efficiency.
Going ahead, cables and wires can be expected to remain Havells’ primary growth driver, with the management indicating around 20% volume growth, which will be aided by new capacity additions.
For Lloyd Consumer, management expects channel inventory to normalise by FY26-end, setting the stage for reduced losses in FY27. However, the lighting segment is likely to be soft, given continued competition and pricing pressure.
Havells’ stock trades at 45 times FY27 estimated earnings, which captures the brighter picture adequately, for now. Plus, the sharp increase in commodity costs has to be passed on, and progress on this must be tracked.
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