Strong growth masked by severe margin compression and slowing volumes

Revenue up 19.5% YoY to ₹6518 Cr; net profit fell 16.6% YoY to ₹290 Cr

Switchgear down 4% YoY + 260 bps margin loss (highest-margin segment); wires/cables flat volumes; Lloyd volume single-digit

A&P spend more than doubled YoY, materially dragging profitability. Full-year budget ₹700–800 Cr vs ~₹600 Cr prior year—net increase

NPM 4.4% (very weak); management now says expect 'stabilized' contribution margins, not improvement. Prior guidance implied stabilization this quarter—missed

Renewables carved out as separate segment; growth strong but margins under pressure (solar panels lower margin than inverters)

Prior call: 'demand improve, margins stabilize.' Q1: PAT −16.6% YoY, NPM 4.4%; contribution margins held but EBIT margin compressed by A&P (₹286 Cr, ~2.8× prior year weekly average)

Budget now 'around ₹700–800 Cr' (vs ~₹600 Cr FY26); long-term commitment to 2.7% of revenue signals sustained margin headwind vs. historical 2.3–2.5%

Claims of 'each category showed strength' contradicted by Switchgear −4% YoY, Cables/wires flat, Lloyd single-digit volume growth acknowledged in Q&A

Separate reporting enables visibility; 'sector tailwinds' and 'strategic insourcing' (Goldi investment) position Havells as serious player, though margin pressure from panel mix acknowledged

West Asia crisis stopped vessel shipments; domestic stable. International 15% but quarterly variance high. Margin erosion from raw material volatility + trade confusion. Expect recovery Q2.

Calibrated price hikes during high volatility. Improved distribution policy; focus on channel health, not loading. On secondary sales, market share not lost. Long-term mix optimized for profitability not just top-line.

Readjustment between above/below line; will normalize. Advertising is long-term investment. Lloyd volume single-digit but value growth higher from price hikes.

Lumpy by quarter but long-term readjustment. 4–5 year view: stable as % of consumer revenue. Full year ~₹700–800 Cr. Long-term average 2.7% of revenue for company overall.

Focus on non-utility scale (residential, C&I). Strategic inputs: battery storage, EV chargers. Adjacent to brand/distribution. Too early to detail.

Havells historically doesn't give guidance. Quarter start positive; hopeful for resilient growth all year.

Price increases compensate for cost; usual yearly hikes continue. Contribution margin also product mix—high-growth categories expected to lift profitability higher than value sales growth.

Volume largely flat, very low single-digit. Flat across wires and cables.

Goldi (strategic investment) ensures supply chain. Inverters in-house; other categories will have strategic tilt in-house (assembly or technical collaboration). Strong economic imperative for renewables in India.

Gap due to higher A&P across all businesses, not just cables. Will normalize in year. Price hikes 7–8% average. Most cost passed, some remnants in Q2.

Except Q2–Q3 (non-seasonal), should see double digits sooner than later. Volatility and timing differences in price hikes caused this.

No challenges; successfully passed on. Demand remained resilient. Any raw material improvement will be further passed or reduced.

~₹800 Cr cables & wires, ~₹200 Cr new R&D center, rest divided across other businesses.

Early stage, too early to comment. Part of renewables strategy; will detail later.

Not just West Asia; raw material volatility also caused confusion in trade on buying. Now stabilized; domestic stable, international expected to rebound Q2.

15%.

Ranged 5–20%, cables larger (copper/aluminum link). Average ~7–8%. Looking to stabilize contribution margins, not EBITDA (has many factors). Raw material also staggered up; normalized margins expected.

Strategically hopeful business can become very big. Goldi investment for supply chain security. Focus on residential/C&I, not utility scale. Many moving parts: govt support, regulation, tariffs, subsidies. India has great future; Havells wants a part.

A&P normalizes over year; initial bump this year needed (target 2.5–3% spend). Expect stabilized margins Q2+. Disciplined pricing despite volatility; constant eye on margin and spend. Should see improvement in volumes and profitability.

Two aspects: ensure top-of-mind during season; build long-term premium image. Lloyd A&P will remain elevated couple years for dual need—premiumization and quality communication.

Domestic wires: maintained margins via distribution strategy (sell-out vs sell-in). Cables: linked to capacity expansion. Wires strategy: keep customer confidence high on brand/channel. Advertising also behind wires. Long-term model positive.

I don't need to repeat my answer. Already answered it.

Made improvements in distribution: more sell-out oriented. Focused on channel sell-out. BEE rating changes pushed stocks to channel Q3–Q4; April delayed summer saw decent sell-out. Sell-in affected but over time should stabilize.

[Audio issues; unclear] Switchgear normalized margins 37–40% contribution margin. [Analyst to connect separately.]

Cables doing well, ramping capacity, no teething issues. Challenges from raw material volatility—material pushed sometimes or slow pickup when prices down.

Full range available; IR will provide more detail.

Don't give bifurcation. Lloyd seasonal. Not ₹800 Cr guidance; normal 2.7–2.8% of net sales (trend for years).

Yes, plus other reasons.

Last year bad season, BEE changes end-Dec, raw material volatility Q1. Changed distribution strategy (sell-out vs sell-in)—foundation for future growth.

Depends on company strategy. Long-term brand building important. Short-term RM fluctuations noise. Brand building continuous, long-term investment.

Too early to give more detail than already given.

Capacity utilization high; cables also affected by raw material fluctuation. Sell-in slower when prices fluctuate. Lots of dealer sales; dealers sell own stock when prices down. Many factors; don't look at one quarter.

At end of quarter, yes. [Confirmed for both.]

I'm always confident about Havells growth.

Can't give on call; IR will provide.

Q1 start positive; hopeful for 'resilient growth momentum' all year despite macro uncertainties

Prior guidance (last call) implied 'margins to stabilize in coming quarters'; Q1 delivered compression instead (NPM 4.4% very weak). Reliance on A&P normalization; no structural driver identified

Cables expansion critical to volume recovery post-capacity constraints. R&D center for innovation; rest allocated to other growth categories

Switchgear (historical 37–40% contribution margin, highest in portfolio) down −260 bps in Q1. ECD also showing 2-year profit decay. Management says 'stabilized/normalized' but no credible driver for recovery articulated beyond commodity stabilization.

Analyst (Jatin Sangwan) noted competitor reported high single-digit wires, low-mid single-digit cables on high base; Havells cables flat. Management's response (sell-out strategy, long-term brand) does not address near-term volume pressure or competitive encroachment.

A&P doubled YoY (to ~₹286 Cr this quarter, vs ~₹140 Cr avg prior). Management expects normalization 'rest of year'—but FY27 budget is ₹700–800 Cr (vs ~₹600 Cr FY26), implying sustained elevated spend. Profit recovery now dependent on both A&P normalization AND volume growth (which is muted).

Renewables presented as strategically important (carved out separately, Goldi investment, 'strong tailwinds'), but management dodged all specific questions on 3–5 year vision, revenue targets, and Pixii BESS model ('too early to comment'). Solar panel mix headwind acknowledged but no path to margin improvement quantified.

Management acknowledged channel inventory is 'lower than normal' at end of Q1 (for both cables and ACs) due to raw material deflation (dealers selling own stock vs reordering). This creates upside if destocking reverses, but also downside if it signals demand weakness masked by revenue growth.