Havells India Limited (HAVELLS) Q2 FY27 Financial Results: PAT ₹850 Cr & Revenue ₹11,200 Cr

Investor Takeaways

• Revenue of ₹11,200 Crore reported for the quarter, reflecting resilient demand and volume growth in consumer categories.
• Net profit of ₹850 Crore recorded, supported by pricing stabilization in lighting and single-digit volume growth in ACs.
• Contribution margin remained stable at approximately 18.3%, though margin pressure was observed in renewables due to mix shift toward lower-margin solar pumps and competitive pricing.
• International switchgear revenue accounts for 15% of the segment and was temporarily impacted by West Asia export disruptions.
• Advertising expenditure exceeded ₹700 crores for the full year, with front-loaded investments in wires/cables and ACs surpassing the long-term average of ~2.7% of revenue.
• Management expects margin recovery in H2 FY27 and normalization of switchgear margins to 37-40%, supported by capacity expansion in cables and strategic insourcing in renewables.

Overall Tone: Neutral based on the numbers only.

Key Financial Highlights

What Changed

The filing indicates that Havells India demonstrated resilient demand and volume growth during Q1 FY27, particularly in consumer categories such as lighting and air conditioners, with pricing stabilizing in lighting and single-digit volume growth in ACs driven by value increases from price hikes. However, margin pressure emerged in the renewables segment due to a mix shift toward lower-margin solar pumps and competitive pricing, despite contribution margin remaining stable at approximately 18.3%. International switchgear revenue, which constitutes 15% of the segment, was temporarily affected by export disruptions in West Asia. Additionally, advertising spend exceeded ₹700 crores for the full year, with front-loaded investments in wires/cables and ACs exceeding the long-term average of ~2.7% of revenue. Management has projected margin recovery in H2 FY27 and expects switchgear margins to normalize to 37-40%, supported by capacity expansion in cables and strategic insourcing in renewables.

Peer Comparison

Havells trades at a lower P/E multiple compared to Titan and Asian Paints, suggesting potential relative valuation differences within the peer set.

Risks & Concerns

• Margin pressure in renewables due to mix shift toward lower-margin solar pumps and competitive pricing.
• Temporary disruption in international switchgear revenue due to export challenges in West Asia.
• Elevated advertising spend above long-term average may sustain short-term margin pressure.

Quarterly Trend