Havells India FY25: Double-digit growth, Lloyd turns profitable

Company Overview:

Havells India, a leading player in the consumer electrical goods space and continues its leadership trajectory in the white goods and consumer electrical sector, driven by sustained investment in capacity, technology, and distribution. The FY25 annual report highlights aggressive allocation toward R&D, manufacturing expansion, and brand-building initiatives, all of which collectively strengthen its competitive position. The strategic turnaround at Lloyd, robust distribution network expansion, and a diversified innovation pipeline lay the foundation for robust growth and profitability over the medium term.

Strategic Investments and Operational Expansion:

Manufacturing and Capex

One of the critical themes in FY25 is Havells’ aggressive spending on manufacturing infrastructure, notably in cables, white goods, and consumer durables. The company commissioned its state-of-the-art power and flexible cables facility at Tumakuru, Karnataka, and lined up INR 4,500mn for the next phase focused on higher-sized cables, expected to go live by Q2FY26. Additional capacity for automatic washing machines was added at the Ghiloth plant, Rajasthan, while a significant INR 4,800mn investment for a new refrigerator facility (1.4mn units capacity) was announced. Notably, the AC segment’s total production capacity increased from 2mn to 3mn units in FY25, underscoring supplier dominance and supply chain efficiency.

Distribution Network and Digitization

Havells is reinforcing its competitive moat by dramatically expanding its retailer and dealer networks. The retailer base grew from approximately 100,000 in FY16 to 260,000 in FY25, reflecting an 11.6% CAGR, while the electrician network surged from 150,000 to 301,000, strengthening influence in Tier-2 and Tier-3 cities. The D2C digital portal and a unique ‘Havells Happiness’ loyalty program display clear focus on direct consumer engagement, digital transformation, and customer retention.

Brand Building and R&D Push

The company spent INR 6,244mn on advertisement and sales promotion in FY25, increasing its share-of-voice in the category. The R&D spend jumped 25% YoY to INR 2,580mn, with a Bengaluru R&D Centre expansion and new hub in Noida supporting innovation. Flagship launches (AI designer ACs, BLDC+ fans, IoT appliances) point to the ongoing transformation from commodity play to premium branded portfolio, locking in consumer preference and pricing power.

Financial Performance:

Key Metrics and Growth Trajectory

Havells delivered robust financial metrics in FY25, posting net revenue of INR 217,781mn, up 17.1% YoY, and a net profit of INR 15,158mn, a 19.2% annual increase. The EBITDA margin remained steady at 10.0%, with marginal expansion forecasted for FY27E. The strong revenue/PAT CAGRs of 11.1%/18.5% for FY25–27E reiterate the business’ capacity for profitable growth.

Metric	FY24A	FY25A	FY26E	FY27E
Net Revenue (INR mn)	185,900	217,781	235,303	268,842
EBITDA (INR mn)	18,426	21,745	23,834	30,054
EBITDA Margin (%)	9.9	10.0	10.1	11.2
Net Profit (INR mn)	12,708	15,158	16,890	21,267
EPS (INR)	20.3	24.2	26.9	33.9
RoE (%)	18.1	19.2	19.1	21.3
RoCE (%)	15.1	16.1	15.7	17.9
P/E (x)	77.2	64.8	58.1	46.2
EV/EBITDA (x)	51.7	43.7	39.6	31.1

Quarterly Performance

Quarterly sales fluctuated, with the highest turnover in Mar-25 (INR 65,436mn) and margin peaking at 11.6%. EBITDA, net profit, and other operating metrics displayed steady momentum, reflecting seasonality and product-mix effects, particularly in cooling categories. Free cash flow (FCF) was INR 9,612mn, lower than prior year due to increased working capital needs and capex, but poised to grow with demand normalization and GST rate cuts.

Quarter	Net Sales (INR mn)	YoY Growth (%)	EBITDA (INR mn)	Margin (%)	Net Profit (INR mn)
Sep-24	45,393	16.4	3,751	8.3	2,683
Dec-24	48,890	10.8	4,265	8.7	2,780
Mar-25	65,436	20.2	7,570	11.6	5,180
Jun-25	54,554	(6.0)	5,157	9.5	3,477

Balance Sheet Strength

The company’s balance sheet remains robust with net current assets at INR 40,923mn and net fixed assets of INR 43,414mn for FY25. Net Debt/Equity remains negative, highlighting prudent leverage and strong cash balance (INR 33,781mn). Dividend payouts were elevated, ensuring shareholder returns are consistent with growth.

Key Ratios

Ratio	FY24	FY25	FY26E	FY27E
Dividend per share (INR)	7.5	10.0	11.0	13.0
Book Value (INR)	118.8	132.8	148.7	169.6
Dividend Payout (%)	37.0	41.4	40.8	38.3
Gross Profit Margin (%)	32.4	32.9	32.7	33.7
Net Profit Margin (%)	6.8	7.0	7.2	7.9
Net Debt/Equity (x)	(0.4)	(0.4)	(0.4)	(0.4)
Fixed Asset Turnover (x)	3.7	3.7	3.4	3.4
Inventory Turnover Days	70	73	68	70
Receivables Days	24	23	23	23
Payables Days	82	80	78	80

Segmental Deep Dive:

Segment Revenue and EBIT Performance

The company saw strong momentum in Lloyd Consumer, which registered 34.7% revenue growth and turned profitable (EBIT of INR 1,175mn) after a challenging period. Electrical Consumer Durables and Cables grew 15.3% and 13.7% YoY, respectively. Switchgears and Lighting delivered moderate expansion, while industrial shift and material cost inflation affected EBIT margins. Notably, the company diversified risk through multiple categories, including personal grooming, water purifiers, and pumps, which reported 26.1% revenue growth.

Segmental EBIT Margins

EBIT margins varied by segment, with Switchgears declining from 26.5% in FY24 to 22.5% in FY25, Cables at 10.7%, Lighting at 15%, ECDs at 9.9%, and Lloyd improving from -4.4% to +2.3%. Total EBIT margin remained stable at 9.7%, with loss recovery in Lloyd offsetting softness in other divisions.

Segment	FY24 Revenue (INR mn)	FY25 Revenue (INR mn)	Growth (%)	FY24 EBIT (INR mn)	FY25 EBIT (INR mn)	Growth (%)	EBIT Margin FY25 (%)
Switchgears	22,463	23,968	6.7	5,963	5,395	(9.5)	22.5
Cables	63,176	71,836	13.7	7,161	7,715	7.7	10.7
Lighting & Fixtures	16,398	16,708	1.9	2,478	2,507	1.2	15.0
Electrical Cons. Durables	34,825	40,139	15.3	3,871	3,991	3.1	9.9
Lloyd Consumer	38,103	51,341	34.7	(1,670)	1,175	170.4	2.3
Inter Segment	10,936	13,789	26.1	246	252	2.6	1.8
Total	185,900	217,781	17.1	18,049	21,035	16.5	9.7

Innovation and New Product Launches:

R&D Pipeline and Launches

Havells’ R&D has yielded numerous launches across categories: Arc Fault Detection, EnTrack, Instashift, TRON circuit breakers in switchgears; GenieLit, Crysta Deco, and architectural lighting within fixtures; BLDC+ premium fans and nutritional grinders in ECD; and Luxuria ACs plus IoT-enabled washing machines under Lloyd. These innovation-led launches not only secure higher margins but reinforce brand premiumization.

Market Positioning and Product Diversification

The movement into LDA (cooktops, chimneys, hobs), partnerships with quick commerce (Blinkit for 10-min AC delivery), and D2C portal reinforce Havells’ focus on new-age consumer preferences, omni-channel retail, and rapid distribution. Product differentiation underpins sustained leadership against fragmented competition.

Product Innovation:

Segment	New Product Launches
Switchgears	Arc Fault Detection, EnTrack, Instashift, TRON breakers
Lighting & Fixtures	Highbay lighting, Genielit brand, COB spot lights
Electrical Consumer Durables	Nutrigrind grinder, Elio Underlight IoT BLDC+, BLDC+ fans
Lloyd Consumer	Luxuria AC models, Novante IoT-enabled washing machine

Management Perspective and Industry Outlook:

Management communication emphasizes continuous investment in capabilities and channel expansion. The Chairman’s letter reflects confidence in sustained growth, accelerated R&D, and brand-building as priorities. The market is supported by low penetration in electricals, rising urbanization, and higher consumer disposable income, supporting category expansion across mass-premium price points.

Havells’ strategy of channel partner expansion and digital transformation creates a strong moat in a fragmented market. The company remains positioned for margin expansion, leveraging operational efficiencies and cost-saving initiatives, particularly at Lloyd.

Shareholding Pattern

Category	Dec’24	Mar’25	Jun’25
Promoters	59.4	59.4	59.4
Institutional Investors	35.0	35.0	35.7
MFs and Others	5.0	5.4	5.6
FIs/Banks	2.1	1.8	1.4
Insurance	4.4	5.5	6.4
FIIs	23.5	22.3	22.3
Others	5.6	5.6	4.9

Risks and Mitigation:

Key risks for Havells include a sharp rise in commodity prices (notably copper), margin erosion due to competitive pressure, and adverse shifts in consumer demand. A potential reduction in R&D spend could hinder future product launches and profitability. However, diversified segment exposure, prudent financial discipline, and ongoing investment in innovation mitigate these risks substantially.