Havells Bets on Solar, Refrigeration and Cables Expansion Amid Cost Pressures; Rs. 800 Crore Capex Planned for FY27

Havells Bets on Solar, Refrigeration and Cables Expansion Amid Cost Pressures; Rs. 800 Crore Capex Planned for FY27

The Electrical Post

MR. ANIL RAI GUPTA – CHAIRMAN AND MANAGING DIRECTOR – HAVELLS INDIA LIMITED, during the Q4 FY26 conference call, outlined the company's growth strategy centred on renewable energy, cables and wires, industrial infrastructure opportunities, product innovation, and long-term investments, while acknowledging short-term challenges arising from weaker cooling demand, geopolitical disruptions, and rising input costs.

Gupta described the quarter as one of modest overall performance, noting that channel stocking for cooling products was adversely affected by a milder start to the summer season. While industrial and infrastructure-linked categories continued to witness healthy momentum, consumer-oriented segments experienced cautious trade sentiment, primarily because of higher costs resulting from recent global disruptions.

The company increased advertising investments during the quarter to strengthen brand visibility, although overall spending growth remained measured. On profitability, margins remained resilient across most businesses, except for Lloyd, which was impacted by lower revenues.

He stated that Havells continues to face cost pressures linked to recent developments in West Asia and has initiated calibrated price increases across product categories to mitigate the impact of rising raw material costs.

Gupta highlighted that Havells' renewable energy initiatives are gaining momentum. During the year, the company invested Rs. 600 crores in Goldi Solar, enabling Havells to leverage Goldi's solar module manufacturing capabilities and broaden its solar product portfolio. In addition, the company recognised a fair valuation gain of Rs. 283 crores during Q4 FY26 from this investment, which was reported under "other income" for the quarter.

To strengthen Lloyd's position as a comprehensive home appliances brand and deepen its presence in the refrigerator category, Havells invested in establishing a new refrigerator manufacturing facility at Ghiloth. The plant was commissioned during the quarter, alongside the launch of a refreshed product portfolio.

Gupta said that although the onset of summer was delayed, demand for cooling products has begun to recover. The company remains optimistic about a revival in seasonal demand while keeping a close watch on inflation trends and their potential impact on consumer sentiment.

Industrial Cables Outperform Domestic Wires

Discussing the Cables and Wires business, Gupta said the segment recorded an overall 6% volume growth during the quarter. He pointed out that industrial cables significantly outperformed the domestic wire segment.

He explained that the wire business witnessed destocking during the first half of Q4, coupled with a challenging base effect. During the fourth quarter of FY2025, sharp increases in copper prices had encouraged channel stocking. In contrast, Q4 FY26 experienced some correction in copper prices before the outbreak of the West Asia conflict.

As a result, overall volumes were impacted, with the domestic wire segment remaining subdued, while cable volumes continued to expand at a stronger pace.

Gupta emphasized that despite some weakness in domestic wires, the company still achieved volume growth of 6%, supported by stronger industrial demand.

He also noted that inventory gains from both copper and aluminium contributed positively during the period.

Calibrated Price Increases Across Categories

The company implemented calibrated price increases in response to changing market conditions.

Gupta said the first round of price increases was necessitated by changes in energy efficiency ratings, while subsequent increases followed the outbreak of geopolitical tensions that triggered higher raw material prices.

Price revisions have been undertaken not only in fans and air conditioners but across Havells' broader product portfolio.

He indicated that quarterly fluctuations should not be viewed in isolation, as year-end adjustments related to dealer incentives and inventory management can influence performance metrics.

Lighting Margins Expected at 30–32% Over the Long Term

On the lighting business, Gupta indicated that annual profitability patterns can be affected by year-end accounting adjustments and timing differences in releases.

While quarterly variations may occur, he suggested that a long-term margin profile of 30–32% remains a reasonable expectation for the lighting segment.

Solar Emerging as a Major Growth Driver

Gupta said that much of the growth within the "others" segment is currently being driven by solar-related activities.

He noted that Havells is simultaneously building capabilities in industrial cables and renewable energy, particularly through its strategic investment in Goldi Solar.

According to Gupta, supply constraints in the market have enabled the company to benefit from favourable industry dynamics.

He expressed confidence that opportunities in the solar segment will remain substantial over the coming years.

Going forward, Havells plans to expand its product offerings across the broader renewable energy ecosystem.

While acknowledging that the renewable segment remains highly competitive, Gupta said the company intends to protect and improve margins through product innovation, value-added offerings, and expansion of its renewable product portfolio.

He added that higher volumes, market share gains, and enhanced product mix will be critical levers for sustaining profitability in this segment.

BEE Norms and Seasonal Impact Weighed on Fans Business

Addressing the fans segment, Gupta explained that changes in Bureau of Energy Efficiency (BEE) norms during the third quarter had resulted in channel stocking toward the end of Q3, which subsequently affected demand patterns in Q4.

Seasonality also played a role in moderating performance during the quarter.

However, he expressed optimism that volume growth could improve during the first quarter as seasonal demand normalises.

Rs. 800 Crore Capex Planned for Cables and Wires

On capital expenditure plans, Gupta said major investments through FY27 and FY28 will be directed toward the Cables and Wires business.

A substantial portion of these investments is already underway, with approximately Rs. 800 crores planned during the current financial year.

Beyond cables and wires, the company is making a significant commitment toward a new research and development centre, with investments expected to be spread over the next two to two-and-a-half years.

Gupta clarified that no major new capital expenditure is planned for the Lloyd business in the near term.

Industry Consolidation Likely to Continue

Gupta observed that the wires industry has historically undergone substantial consolidation, with organised players steadily gaining market share from regional and unorganised brands.

He believes this trend will continue as companies that maintain sustained investments in innovation, branding, and distribution strengthen their competitive positioning.

According to him, new entrants may capture some market share, but the broader shift from unorganised to organised players is expected to persist.

"Companies that continue to invest in innovation, brand building and distribution will be the winners in this segment," Gupta indicated.

Regional Expansion Focused on West and Tamil Nadu

Havells is also intensifying its focus on regions where market penetration remains relatively low.

Gupta said the company continues to invest heavily in western India as well as select southern markets, particularly Tamil Nadu, where Havells' market share lags compared with other geographies.

These investments encompass both distribution expansion and localised brand-building initiatives.

He stated that the company is witnessing encouraging traction in these focus markets, reflecting the benefits of sustained investments.

Underground Cables Present New Opportunity

In the cables business, Havells is increasing investments in underground cable applications, an area where Gupta acknowledged the company had been relatively underrepresented.

Despite this expansion, Havells expects its business mix to remain broadly balanced.

Historically, the company's B2C and B2B contribution has fluctuated between 75:25 and 70:30, and management does not foresee any significant structural shift toward B2B in the coming years.

Instead, Havells expects stronger growth opportunities to emerge from consumer-facing businesses, particularly Lloyd and the Electrical Consumer Durables (ECD) segment.

Supply Chain Challenges Managed Successfully

Gupta acknowledged that the company faced supply-side challenges over the last few months, particularly in production operations.

He attributed some disruptions to gas supply-related issues and raw material availability constraints.

However, Havells has been able to navigate these challenges effectively and remains focused on maintaining operational continuity.

He stressed that stronger companies are generally better positioned to absorb supply chain disruptions because they possess the financial capacity to continue investing in innovation, brands, distribution, and long-term capabilities.

Gupta reiterated that Havells' strategy remains focused on sustained long-term value creation rather than quarter-to-quarter performance fluctuations.

According to him, the company's approach is guided by a long-term perspective centred on continued investments in innovation, brand building, distribution expansion, renewable energy, and product development, ensuring that Havells remains well-positioned to capitalise on emerging opportunities across industrial, infrastructure, consumer and renewable energy segments.
 

Published at : Sep 27, 2026 06:25 AM (IST)

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