Havells India Q2 FY27 Earnings Call: Revenue Grows 35% YoY, Plans 5-7% Price Hikes

Havells India Ltd held its Q2 FY27 earnings call on October 22, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Broad-Based Growth, Softer Contribution Margins

• Revenue grew 35% YoY in Q2 FY 2026-2027 — every category posted growth, with healthy contributions from established categories (cables, switchgear) and the emerging renewables business; consumer demand remained steady despite the inflationary environment.
• EBITDA grew ~30% YoY on operating leverage; PBT growth was relatively moderate due to the higher base from a one-time gain in other income in Q2 FY 2025-2026.
• Contribution margins were softer YoY — primarily cables, where the decline in aluminum prices during Q2 FY 2026-2027 impacted margins against a strong Q2 FY 2025-2026 base; rest-of-portfolio (ex-cables) margins held up well as pricing offset input inflation.
• H1 FY 2026-2027 cables contribution margin was ~15% — broadly in line with the long-term average and described by management as the normal 15-15.5% range given the current product mix.
• Lloyd delivered healthy revenue growth on volume and value in Q2 FY 2026-2027, but margins remained subdued on raw material inflation and seasonal under-absorption during the off-season.
• Management enters Q3 FY 2026-2027 festive season with a positive outlook on both demand and margins, while macroeconomic uncertainties persist and commodity prices remain elevated.

Calibrated Price Actions Against Raw Material Inflation

• Trailing 12-month price increases varied 10-25% across categories (through Q2 FY 2026-2027); cables & wires saw more than 30% price rise, while certain categories saw about 10-15%.
• Further hikes of 5-7% planned in Q3 FY 2026-2027 (varying product to product) if the raw material cost surge persists; management noted Q2 is typically not when competition raises prices, though sharp raw material increases occurred in Q2 FY 2026-2027.
• Management is not anticipating any reduction in pricing — it described the recent commodity abatement as routine ("every month, every quarter") and said it is difficult to call any downtrend at this moment, leaving open the risk of high-cost inventory pressuring Q3 FY 2026-2027 margins.
• Switchgear contribution margin recovered to 38-39% in Q2 FY 2026-2027, returning toward the historical normalized band of 38-40% after raw-material-volatility-driven compression; further pricing actions are planned in Q3 FY 2026-2027.
• Wires & cables have seen two-way raw material swings since 2008 (~20 years), so channel and consumers there are accustomed to faster price pass-through, unlike some other categories per management.
• No revenue guidance for FY 2026-2027 — CMD Anil Rai Gupta stated Havells does not give any revenue guidance for the year; a follow-up on a referenced 10-12% price hike went unanswered due to audio issues.

Seasonal QoQ Drop, Margin Pass-Through Expected from Q3

• Lloyd consumer revenue fell from Rs.1,460 Cr in Q1 FY 2026-2027 to Rs.615 Cr in Q2 — management clarified this is a recurring seasonal pattern (Q1 is the biggest AC quarter; Q2 sales decline every year) and advised assessing growth on a YoY basis rather than QoQ.
• Lloyd top line grew 28.5% YoY in Q2 FY 2026-2027 — reflecting both volume and price; management pushed back on the notion that growth was mostly volume, noting earlier distribution actions have settled and volume growth is returning for both brands.
• Q2 margin decline stems from under-absorption of manufacturing overheads plus the off-season inability to fully pass on cost increases; the sharper decline was driven by raw material costs continuing to rise while the industry took more time to pass on price increases.
• Pass-through expected as the season kicks in from Q3 FY 2026-2027, trickling into Q4 FY 2026-2027; cost efficiencies in factories and overheads will continue, but certain cost inflation must be tackled through price increases only.
• RAC is close to 75% of Lloyd's business — management aspires to bring this down to around 60% over a period of time (period unspecified) through growth in non-RAC products.
• Refrigerator factory (commissioned March, Q4 FY 2025-2026) fully on stream only in the last couple of months — revenue growth has been "pretty decent" and contributed well to volume growth, with the meaningful season expected in FY 2027-2028.
• Q2 is not the best quarter to assess Lloyd market share per management, since its major shares are in air conditioners and Q2 is the lowest quarter for ACs; A&P spends in Q2 FY 2026-2027 were in line with budget after a heavy Q1 pull-forward.

Aluminum-Heavy Mix, Capacity Expansion on Track

• Cable contribution margin declined ~380 bps YoY in Q2 FY 2026-2027 (figure cited by analyst) — CMD Anil Rai Gupta attributed the decline to aluminum price increases against a high year-ago base.
• 80-90% of cable sales are aluminum-centric Indian markets per the CMD; the wires business is entirely copper-based. Havells is not the margin leader in cables — the category is more commoditized — and strategic focus remains on the consumer-oriented wires business.
• Cables & wires volume growth was "very close to double digits" in Q2 FY 2026-2027; switchgear also posted double-digit volume growth, which management attributed to regular market demand rather than Q1 order spillover.
• Full cables expansion expected on stream within the next 18 months (from the October 2026 call date, i.e., into FY 2027-2028), mostly on the MV and AHV side in line with the original plan; all capacity is aluminum-based, not copper, with enough low-voltage capacity already in place.
• Switchgear exports are ~15% of segment revenue (Q2 FY 2026-2027) with decent traction in volume and value mix, attributed partly to market share gains; management hopes the trend continues from Q3 FY 2026-2027 onward.
• Management expects decent cables traction in India and export markets over the next 5-7 years, with underground cable capex (previously delayed) caught up over the last couple of years; LT cables have been more competitive than MV/HV for the last ~20 years and this will continue.
• No specific margin guidance for Q3-Q4 FY 2026-2027 — management reiterated contribution margins are established over longer periods, with sharp volatility the main risk of disturbance; underground cable margins are expected to return to normal levels (period unspecified).

New Wires Entrants, Consumer-Led Renewables Play

• Two new organized wires entrants flagged — Crompton and UltraVolt — management said new organized players generally take share from the unorganized sector, which has grown over the last couple of years due to high inflationary trends, and that "irrational behaviors" from new competition could affect market shares "for some time."
• Possible "slight compromise on the contribution margins or profitability" acknowledged in defending wires share; management declined to frame outcomes as shelf space vs. profitability, calling such outcomes speculative, and cited product launches, deeper distribution relationships and influencer management as levers.
• Crompton's entry characterized as brand-led with "no technology, no factory"; the other entrant, which has invested to build a long-term business, is treated "with more respect" and viewed as good for the industry. Wires has recently returned to industry-leading growth in FY 2026-2027.
• Renewables run-rate of ~Rs.300 Cr per quarter cited (Q2 FY 2026-2027) — asked about scaling ambitions by FY29, management did not commit to a numeric target, instead outlining its right to win; it is too early to guide on peak revenue, volumes or margins (period unspecified).
• Havells is not targeting large integrated players — Tata Power, Waaree and Adani — and is "not looking at gigawatt-scale" projects; focus is on brand and channel via system integrators, distributors and dealers, selling fully integrated product kits to industrial or residential consumers.
• No in-house renewables manufacturing currently — Goldi Solar does a lot of manufacturing for Havells under an existing tie-up; management rejected the "trading margin" label, citing its own technology development of the complete product kit plus brand and channel play. On trading-only players driving consolidation, management said "possibly" — a hedged view with no timeline or magnitude.

ROC Recovery Path, Distribution Rejig Settled, Capex Plan

• ROC stands at ~23% in FY 2026-2027 vs. the long-term average of 25%+ — management sees no reason why ROC should not do "much better" over the next couple of years (FY 2027-2028–FY 2028-2029) and is comfortable with ROC exceeding the long-term average.
• Expansion capex takes time before contributing to return ratios — existing assets should deliver more, and newer categories (renewables cited as ramping up) have historically been supported by the decent ROC of existing categories; brand and distribution are the biggest assets not captured in the capital base, and "sweating" them is a key ROC lever.
• ~Rs.14 billion capex estimate retained for FY 2027-2028, allocated to cables & wires and the R&D center; each new initiative should improve on where the company is today, though returns take time and do not start from day one.
• Pull-led distribution model (begun October for Lloyd, January for Havells) now established — such a system takes about 6-9 months to establish; the focus is on channel profitability margins and return on capital by not pushing excess inventory, while BTL/ATL promotions and extended warranties continue.
• Leadership rejig at the start of FY 2026-2027 is routine — part of a regular every 3-4 years people-development rotation, with nothing major in FY 2026-2027 per management.
• R&D spend aimed at gaining market share and sustaining industry-leading margins in existing categories via premiumization of brand and product; major focus is product design, with value engineering a continuous process. On new adjacencies (electronics manufacturing, import substitution), the major focus remains consumer-facing — building final products through its own brand and channel rather than manufacturing for other brands.
• For the segment facing profitability challenges, management is aiming to start making profitability "in the medium term" — no specific timeline provided, as management prefers to avoid such guidance.