Havells India reported a 16.5% decline in consolidated net profit to ₹290.38 crore for the quarter ended June 2026, compared to ₹347.72 crore in the corresponding quarter of the previous year. According to reports from Business Standard, this profit decline came despite the company achieving strong revenue growth during the same period. The profit figure came in well below the street estimate of ₹430 crore, indicating market expectations were significantly higher than actual performance. The sequential comparison shows revenue fell 2.8% from ₹6,705.20 crore in the March quarter, while profit before tax fell 57.2% from ₹917.61 crore and net profit attributable to owners fell 59.8% from ₹723.06 crore, with the collapse not entirely operational as the March quarter carried other income of ₹296.25 crore and a ₹13.57 crore contribution from equity accounted investment.
The company's sales revenue increased by 19.5% to ₹6,518.19 crore in Q1 FY2026, as compared to ₹5,455.35 crore recorded in the corresponding quarter of the previous financial year. As reported by Business Standard, revenue from operations rose 19.5% to ₹6,518.19 crore, ahead of the street estimate of ₹6,430 crore, though total income grew 19.0% to ₹6,572.35 crore after accounting for a 21.7% decline in other income to ₹54.16 crore. The cable and wires (C&W) segment recorded a robust 27% year-on-year growth, while Lloyd revenue increased 15% despite coming off a favourable base in the year-ago quarter. Other segments showed mixed performance with electrical consumer durables growing 12% and lighting revenues up 4%, while the switchgear segment declined 3% due to disruptions in West Asia. According to NDTV Profit, Chairman and Managing Director Anil Rai Gupta confirmed that the ongoing West Asia crisis has weighed on switchgear exports to the Middle East and Africa, with the company's total exports representing a small but reasonable part of the switchgear business.
Despite strong topline growth, gross margins contracted sharply by 218 basis points to 31.3%, while operating margin declined by 228 basis points year-on-year to 7.3%. According to Equirus Securities, this was significantly below expectations owing to stepped-up and front-loaded brand-building efforts in the first quarter, led by media investments that are expected to normalise during the rest of the year. Cost of raw materials and components consumed rose 33.6% to ₹4,023.54 crore against revenue growth of 19.5%, while purchases of traded goods rose 41.4% to ₹967.75 crore. The ₹512.95 crore inventory build indicates management bought material forward, suggesting expectations to pass costs through rather than absorb them. Employee benefits expense rose 6.4% to ₹531.44 crore, other expenses excluding advertising rose 13.9% to ₹754.51 crore, and depreciation rose 14.0% to ₹120.57 crore. As per NDTV Profit, Gupta attributed margin pressure to higher advertising and promotion spending during the quarter, following a subdued comparison base last year, with A&P spends expected to normalise over the full year.
The cables business reported revenue of ₹2,456 crore for the quarter ended June 2026, representing 27% year-on-year growth, while segment EBIT rose just 5% to ₹255 crore. According to Business Upturn, the divergence between strong revenue growth and modest profit growth illustrates the commodity-exposed nature of the cables business, where copper and aluminium account for the dominant share of bill of materials. Segment margin fell to about 10.4% from about 12.6%, a contraction of more than 2 percentage points, with the company selling ₹522 crore more cable and keeping ₹12 crore more inventory. The ₹512.95 crore inventory build indicates management is positioning for price pass-through in future quarters, as the company historically recovers commodity cost inflation through price increases with a lag of one to two quarters. As per NDTV Profit, Gupta confirmed that price hikes varied by category, with cables and wires seeing the steepest increases of 7-8% given the segment's commoditised nature, and by the end of Q1, the company believes it has passed on the entire cost increase.
Despite margin pressures, management's view remains positive on the margin outlook following recent price hikes and normalising advertising spends. According to Equirus Securities, margins are expected to recover in the September quarter, following the implementation of price hikes and normalisation of marketing costs. The stock has sharply underperformed the BSE 100 over the past six months and is down 16% compared with a 4% fall in the broader index. Key monitorables include the pace of margin recovery in Lloyd, stability in raw material prices, execution of planned capacity additions, and scaling up of the renewables business. NDTV Profit reports that Gupta expressed optimism about domestic demand helping offset pressure from exports, with the company enthused by domestic demand outlook despite uncertain export outlook due to the West Asia crisis. Anand Rathi Research maintains a Buy rating with a revised target price of ₹1,379, while JM Financial Research has maintained an Add rating with a target price of ₹1,300 despite cutting FY27 earnings estimates by 8%.
