Havells Faces Margin Squeeze Amidst Rising Costs

Havells India concluded the fiscal year 2026 with a 6% decline in its fourth-quarter earnings before interest, taxes, depreciation, and amortization (Ebitda). This downturn was primarily attributed to ongoing losses within its Lloyd appliance division and escalating input costs.

Revenue saw a modest 2.4% increase, reaching ₹6,688 crore. However, a slower start to the summer season impacted sales of cooling products. The Lloyd Consumer segment, a significant contributor to Havells' revenue, reported its fourth consecutive quarterly Ebit loss, with revenue falling 19% year-on-year. This segment was negatively affected by cost pressures from energy efficiency norm changes, increased copper prices, and rupee depreciation.

Conversely, the cables and wires (C&W) segment demonstrated resilience, with revenue growing 14% in the fourth quarter, largely propelled by robust demand for industrial cables. This segment is crucial, forming 37% of total revenue and nearly half of the company's Ebit in the last quarter. Havells is investing ₹340 crore to expand its cable manufacturing capacity, expected to be commissioned by the end of FY27.

The renewables segment, within 'others', emerged as a notable growth area, with revenue up 48% in Q4FY26 and 25% for the full fiscal year. Despite these positive aspects, the overall FY26 revenue and Ebitda growth was subdued at approximately 3% each, a significant slowdown from the 17% and 16% growth seen in FY25. Reflecting these challenges, several analysts have reduced their earnings per share (EPS) guidance for FY27-28.