Havells India's Q3 Performance: Cables and Wires Shine Bright
Havells India Limited delivered a solid performance in the December quarter of fiscal year 2026. The company's consolidated revenue jumped by 14% year-on-year, reaching an impressive ₹5,588 crore. However, net profit growth lagged behind at just 8%, settling at ₹300 crore. This slower profit increase stemmed from an exceptional charge of ₹45 crore related to labour law adjustments.
Cables and Wires Segment Emerges as Star Performer
The cables and wires division truly stole the show during the third quarter. This segment contributed a substantial 40% of Havells' total revenue. It recorded robust growth of 32% compared to the same period last year. More importantly, cables and wires accounted for a whopping 80% of the company's incremental Q3 revenue. This strong performance effectively offset weaknesses observed in other business areas.
Two key factors propelled this outstanding growth. First, Havells implemented strategic price hikes to manage increased raw material costs, particularly for copper and aluminium. Second, market demand remained exceptionally strong, driving volume growth of over 20%. The company currently operates its cables manufacturing facilities at 90-100% capacity utilization, while wire production runs at 65-70% capacity. This leaves clear room for further volume expansion as Havells adds new production capabilities.
Lighting and Lloyd Consumer Segments Face Challenges
Not all segments shared in the success story. The lighting division experienced a 3.5% year-on-year decline in Q3 revenue. Earnings fell even more sharply, with Ebit margin dropping from 14.6% to 11%. Intense market competition and significant pricing pressure primarily drove this downturn.
The Lloyd Consumer segment, which includes room air conditioners, saw revenue decrease by 5.6%. This segment continues to operate at a loss. High channel inventory levels in the RAC business negatively impacted both volumes and margins during the quarter.
Capital Expenditure Strategy and Future Outlook
Havells' management anticipates capital expenditure will taper off after fiscal year 2026. The company has already invested approximately ₹1,200 crore in the first nine months of FY26. A significant portion of this expenditure focused on expanding cables and wires capacity to address near-peak utilization levels. This strategic investment supports continued growth in Havells' most scalable segment.
Major capital expenditure for the Lloyd Consumer business was largely completed during FY26. Management now indicates only limited incremental spending will be required moving forward. Additionally, Havells initiated investments in a new research and development centre during FY26. Spending will continue into FY27 to bolster long-term product development and enhance operational efficiency.
Forward-Looking Projections and Market Valuation
Looking ahead, cables and wires are expected to remain Havells' primary growth engine. Management projects approximately 20% volume growth, supported by new capacity additions. For Lloyd Consumer, executives anticipate channel inventory will normalize by the end of FY26. This should pave the way for reduced losses in fiscal year 2027.
The lighting segment will likely remain soft due to ongoing competitive pressures. Havells' stock currently trades at 45 times estimated FY27 earnings, which appears to adequately reflect the company's brighter prospects for now. Investors should monitor how effectively the company passes on sharp increases in commodity costs to consumers.
