Havells’ margin recovers sequentially, but trails its year-ago level
Switchgear and renewables supported growth, but cable margins softened as falling aluminium prices weighed on contribution margins.
Filed 22 Oct 2026, 13:58 IST · Havells India Ltd (HAVELLS)
Key takeaways
- Revenue grew 34.58% year on year, but expenses grew 34.96%, narrowing operating margin by 0.26 percentage points.
- Operating margin improved 1.76 percentage points sequentially as expenses fell 3.20% while revenue declined 1.32%.
- Net profit rose 9.72% year on year, constrained by a 2.88-percentage-point increase in the tax rate and lower other income.
Price around the results
Switchgear and renewables supported revenue growth
Havells’ consolidated revenue rose 34.58% year on year, with management saying switchgear benefited from stronger domestic demand and an export recovery after the first-quarter disruption. The company also said renewables continued to scale faster during the quarter. Sequentially, revenue declined 1.32%, indicating that the year-on-year growth comparison was the stronger one.
Cable and Lloyd margins kept pressure on profitability
Operating margin narrowed 0.26 percentage points year on year because expenses grew 34.96%, faster than revenue. Management said falling aluminium prices affected cable margins, while the first-half cable contribution margin was about 15%, in line with its long-term average. It also said lighting margins were soft because of certain project orders and Lloyd’s contribution margins remained subdued due to raw-material inflation and under-absorption.
Sequential margin recovery leaves Havells below peers
Operating margin improved 1.76 percentage points from Q1FY27 as expenses fell 3.20%, faster than the 1.32% decline in revenue. The recovery followed a drop from 10.88% in Q4FY26 to 7.15% in Q1FY27, but the current 8.91% margin remains below the 11.24% median for 30 Consumer Discretionary peers that have reported. Year-on-year profit growth was weaker than revenue growth as the tax rate rose 2.88 percentage points and other income fell 64.20%; other income accounted for 6.90% of pre-tax profit.
Management links planned capex to cables and R&D
Management said full-year capex is expected to be Rs 1,400 cr, mainly for cable-capacity addition and a new R&D centre. The planned cable investment follows the margin pressure management attributed to aluminium-price volatility. The company also said renewables improved margins through a better product mix.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹6,432 cr | ₹6,518 cr | -1.32% | +34.58% |
| Other income | ₹33 cr | ₹54 cr | -39.79% | -64.20% |
| Expenses | ₹5,859 cr | ₹6,052 cr | -3.20% | +34.96% |
| Operating profit | ₹573 cr | ₹466 cr | +22.99% | +30.77% |
| Operating margin (%) | 8.91% | 7.15% | — | — |
| Interest | ₹5 cr | ₹7 cr | -36.33% | -48.03% |
| Depreciation | ₹129 cr | ₹121 cr | +6.64% | +21.54% |
| Profit before tax | ₹473 cr | ₹392 cr | +20.48% | +14.00% |
| Tax | ₹123 cr | ₹103 cr | +20.30% | +28.13% |
| Net profit | ₹349 cr | ₹290 cr | +20.54% | +9.72% |
| EPS (₹) | ₹5.57 | ₹4.63 | +20.30% | +9.43% |
Operating margin of 8.91% compares with a Consumer Discretionary sector median of 11.24% across 30 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -3.91% | -3.53% |
Volume on the results session was 6.76× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Switchgear growth was supported by domestic demand pickup and recovery in exports after the first-quarter disruption.
- Renewables continued to scale faster during the quarter.
Guidance & outlook
- Full-year capex is expected to be Rs 1,400 crores, primarily for cable capacity addition and a new R&D centre.
Expansion
- The company plans capacity addition in cables as part of its full-year capex programme.
New initiatives
- The company plans to invest in a new R&D centre.
Problems & risks
- Contribution margins were softer year on year mainly because falling aluminium prices weighed on cable margins.
- Cable margins were affected by aluminium price volatility, while first-half contribution margin was about 15%.
- Lighting margins were soft because of certain project orders.
- Lloyd's contribution margins remained subdued because of raw material inflation and under-absorption.
What to watch
- Whether operating margin holds above 8.91% after the sequential recovery.
- Whether cable contribution margins remain around the first-half level of 15% as aluminium prices fluctuate.
- Progress on the management-stated Rs 1,400 cr full-year capex programme for cables and the new R&D centre.