Havells India: Business Update & Companies’ Market Share

“Overall, I would say consumer demand has been muted, partly due to unseasonal weather, which impacted the B2C business. Demand lately seems to be improving. B2B and Lloyd have grown well. Deflationary trend in LED business has impacted the consumer lighting revenues. However, there is healthy growth in professional lighting. Lloyd performance has been encouraging, and the brand is building upon the positive momentum. Commodities have relatively softened, while the impact has not been fully reflected in the margin. Working capital levels improved during the quarter with normalization of inventory.”
-Anil Rai Gupta, Chairman & Managing Director

Stock Data

Ticker	HAVELLS
Industry	Electric Equipment
Exchange	NSE

Share Price

Last 5 Days	1.2%
Last 1 Month	2%
Last 6 Months	19.6%

Business Basics

Havells India Limited, a well-established and leading electrical and consumer goods company, operates with a focus on innovation, quality, and consumer-centricity. The company’s business fundamentals revolve around its diverse portfolio of electrical and consumer durables, serving residential, commercial, and industrial segments. At the core of Havells’ business strategy is its expertise in electrical products. The company offers a wide range of electrical solutions, including wiring devices, cables, circuit protection, lighting, fans, and electrical appliances. Havells is known for its commitment to safety, reliability, and energy efficiency, making its products a preferred choice for consumers, contractors, and industries.

Innovation is a driving force behind Havells’ operations. The company invests significantly in research and development to create technologically advanced and energy-efficient products. Havells continually introduces innovative solutions such as smart home automation, IoT-enabled devices, and energy-efficient lighting, aligning its product offerings with global sustainability goals and the evolving needs of consumers. The company’s customer-centric approach is evident in its diverse customer base, which includes homeowners, builders, architects, electricians, and industrial professionals. Havells provides value-added services such as technical support, product training, and after-sales service, ensuring that customers have access to expert guidance and support throughout their product lifecycle.

Q1 FY24 Financial Performance

Havells India Ltd reported Revenues for Q1FY24 of ₹4,834 Crores up from ₹4,244 Crore year on year, a rise of 13.9%. Consolidated Net Profit of ₹287 Crores up 18.11% from ₹243 Crores in the same quarter of the previous year. The Earnings per Share is ₹4.58, up 18.04% from ₹3.88 in the same quarter of the previous year.

Havells’ Segment Revenue

Switchgear: The Switchgear segment includes products like circuit breakers, switches, and distribution boards used in electrical distribution and control systems. Havells’ switchgear solutions are crucial for ensuring electrical safety and efficient distribution of power in residential, commercial, and industrial settings.

Cables: The Cables segment encompasses a wide range of electrical cables, including power cables, control cables, and communication cables. Havells provides high-quality cables that are essential for transmitting electrical power and data, serving various industries, including infrastructure, telecommunications, and manufacturing.

Lighting & Fixtures: Lighting & Fixtures is a significant revenue segment for Havells. It includes a comprehensive portfolio of lighting products such as LED bulbs, luminaires, and fixtures for residential, commercial, and outdoor applications. Havells’ lighting solutions emphasize energy efficiency, aesthetics, and advanced lighting control technologies.

Electrical Consumer Durables: This segment comprises a diverse range of consumer electrical appliances and devices, including fans, home appliances, water heaters, and air purifiers. Havells’ consumer durables cater to the needs of households and individuals, providing comfort, convenience, and energy efficiency.

Lloyd Consumer: The Lloyd Consumer segment represents Havells’ acquisition of Lloyd Electric and Engineering Limited, which includes a wide array of consumer electronics and home appliances. This segment offers products such as air conditioners, refrigerators, washing machines, and televisions, enhancing Havells’ presence in the consumer electronics market.

Companies’ Business Update

Havells is exploring opportunities in white-label manufacturing for products like air conditioners. They have started exporting small quantities and plan to develop this over the next few years. The focus is primarily on exports, not for the domestic brand. White-label manufacturing is expected to help achieve a faster EBIT break-even for Lloyd due to increased capacity utilization.

Havells has invested in distribution enhancement and R&D for fans. They anticipate good growth for fans in the coming year, but exact numbers are not provided. The growth in the last year was affected by rating changes in the fan industry. Margins in the Fans category were impacted by raw material cost increases and unseasonal rains. Over time, margins are expected to improve, especially as raw material prices stabilize. In the ECD business, the demand has started picking up, and good growth is anticipated in the second half of the year.

Market Share and Competition

Havells is focused on increasing market share across its diversified electrical product categories. They remain competitive and are confident in maintaining and expanding their market shares. Despite competition, their growth has been healthy, and they prioritize market share growth over short-term margin fluctuations. Market share gains have been achieved in air conditioners. Other product categories are growing at a slower but healthy pace due to low initial market shares.