# 1. Financial Performance ## A. Key Figures * **Revenue Growth:** **14%** YoY (Q3) * **EBITDA Growth:** **21%** YoY ## B. Revenue Drivers * **Volume & Pricing Momentum:** Top-line growth fueled by strong volume expansion and favorable commodity price impacts in the cables business. ## C. Margin Performance * **Operating Leverage Strength:** EBITDA growth outpaced revenue, reflecting disciplined spending and efficiency gains despite soft consumption trends. * **Margin Resilience Amid Inflation:** Focus on cost rationalization supports margin protection, even as commodity volatility and input cost pressures persist. * **Segment Volatility:** Cables segment saw a sequential dip in contribution margin, but management emphasized **year-on-year improvement** and highlighted inventory timing as a transitory factor. ## D. Cost & Capital Discipline * **Stable Labor Cost Base:** Employee expenses have been contained within **₹460–490 Cr** range over seven quarters, though structural increases are expected going forward. * **Prudent Capital Allocation:** Capex, working capital, and inventory managed with financial discipline to balance growth investments in innovation and distribution. --- # 2. Product & Segment Performance ## A. Key Figures * **ECD Segment Growth:** Driven by **winter products**, strong performance in **OFR** (market leader) and **water heaters** * **Solar Business:** Growing faster than other 'other' segment categories, with **module growth outpacing inverters** * **Other Segment:** Strong revenue growth offset by **subdued margins** due to solar business ramp-up and **C&I/utility order mix** ## B. ECD Segment * **Market Leadership Maintained:** ECD strength anchored by winter demand and **#1 position in OFR**, with solid gains in water heaters. * **Core Share Stability:** Market share held across core categories, with **lighting poised for gains** on outperformance vs. peers. ## C. Solar Growth * **High-Growth Engine:** Solar emerging as key growth vector with **full-stack product offering** (inverters, modules, switchgears, cables) and selective EPC. * **Margin Trajectory Positive:** Revenue scaling in solar accompanied by **expectations of future margin expansion** despite current pressures. ## D. Other Segment * **Portfolio Leverage:** Broadening electrical and electronics portfolio enhances **channel reach, brand utility, and operating leverage**. * **Cables & Wires Resilience:** Industrial cable growth constrained by competition and capacity expansion, but **domestic market share preserved**. --- # 3. Volume & Pricing Trends ## A. Key Figures * **Wires and Cables Volume Growth:** **>20%** YoY * **Planned Price Hike:** **5% to 10%** (ex-GST) across cables and ACs * **Copper Price Increase:** From **$12,000 to $13,000** per tonne ## B. Volume Expansion * **Strong Demand Momentum:** Wires and cables volumes posted strong double-digit growth, outpacing other categories, driven by government infrastructure spending and temporary channel stock build-up. * **Capacity Scaling:** Production capacity for wires and cables to be expanded further amid sustained domestic demand. ## C. Price Hikes * **Broad-Based Pricing Actions:** Implemented 5% to 10% price increases in room ACs and fans to offset inflation from copper, aluminum, and currency pressures, with hikes calibrated to December cost levels. * **Consumer Price Stability:** Planned price hikes are expected to be largely neutralized by GST reductions, keeping end-consumer prices relatively stable. ## D. BEE Norm Transition * **Orderly Market Shift:** Transition to new BEE norms has been smooth, with trade partners clearly differentiating lower-rated, lower-priced products, reflecting mature market adaptation. ## E. Commodity Impact * **Persistent Input Cost Pressure:** Rising copper prices continue to drive pricing actions, though full pass-through remains delayed across channels and consumer segments. --- # 4. Channel & Inventory ## A. Channel Inventory * **Cooling Segment Stabilizing:** Channel inventory levels in cooling products are normalizing after recent challenges, with RAC inventory currently lower YoY amid distributor caution and seasonal timing. * **Wire-Driven Stock Build-Up:** Havells' wire-heavy portfolio saw notable channel inventory accumulation due to sustained price increases through Q3 and into Q4. * **Legacy Product Clearance:** Inventory of pre-BEE norm ACs and fans is on track for full clearance within the next two months, ahead of new compliance rollouts. * **Lloyd Inventory Discipline:** Lloyd’s channel stock is significantly reduced and better managed YoY, despite lack of disclosed inventory days due to weak summer demand and dealer prudence. ## B. Stock Normalization * **Seasonal Normalization Ahead:** Lloyd’s inventory is expected to fully normalize by **March 2026**, timed with regional summer onset—**February in the South** and **March in the North**. * **Price Sensitivity Risk:** Sudden price changes could trigger near-term volume volatility as channel inventory rebalances, depending on underlying consumption trends. --- # 5. Strategic Investments ## A. Key Figures * **Capex:** **₹1,200 Cr** spent in first 9 months * **Goldi Solar Investment:** **₹600 Cr** in module manufacturer with cell integration plans ## B. R&D Expansion * **Strategic Capex Focus:** Major investments directed toward **cables and wires capacity expansion** and a new **R&D center**, with Lloyd-related projects largely complete. * **Renewables Growth Play:** Leveraging strong brand and distribution to scale in solar, backed by dedicated business unit and targeted investments. ## C. Goldi Solar Partnership * **Supply Chain Secured:** Partnership with Goldi Solar ensures strategic access to solar modules, eliminating need for in-house manufacturing. * **Backward Integration Underway:** Goldi is advancing into cell production, enhancing supply resilience and value capture for Havells. ## D. Talent Development * **Leadership Buildout:** Senior hires in **solar, cables, and renewables** reflect proactive talent strategy to support future operating leverage. --- # 6. Demand & Market Risks ## A. Key Figures * **Exceptional Item:** **₹45 Cr** provision for new labor codes ## B. FMEG Weak Demand * **Cautious Outlook Despite Seasonal Uplift:** Festive and winter demand showed improvement, but management remains prudent in summer product planning due to prior year’s poor season and ongoing demand weakness. * **Structural Segment Pressures:** FMEG continues to face prolonged softness, with **diluted brand pull** and **eroded pricing power** amid intense competition and market share gains by unorganized players. * **Macro & Cyclical Headwinds:** Post-COVID demand recovery has lagged, while **hyperinflation in the electrical sector** has exacerbated challenges by lowering entry barriers for regional competitors. --- # 7. Guidance & Outlook ## A. Key Figures * **Capex Guidance:** **₹1,000 Cr** for next fiscal (no reduction in capital intensity) ## B. Growth Strategy & Export Potential * **Export Diversification in Focus:** Company evaluating export opportunities—particularly for **cables**—as a strategic hedge against potential domestic demand softness, supported by strong prior-year export growth. * **International Expansion Challenges:** U.S. subsidiary efforts face headwinds from **tariff issues**, slowing progress despite existing international focus. * **Renewables Growth Optimism:** Management sees strong potential in renewables driven by India’s economic trajectory, with more details expected in future updates. ## C. Margin Outlook * **Balanced Growth Approach:** Company prioritizing tactical balance between growth and margin preservation, though no formal margin guidance provided for next four quarters. * **Solar Margins: Project-Dependent:** Solar product margins range from **high single digits to early double digits**, with variability across projects and caution against extrapolating current quarter performance.