Thanks, Danish. On behalf of ICICI Securities, we welcome you all to Q3 FY26 and nine months FY26 results conference call of Havells India Limited.

We have with us today senior management represented by Mr. Anil Rai Gupta, Chairman and Managing Director, Mr.

Rajesh Kumar Gupta, Whole-time Director and Group CFO, Mr. Ameet Kumar Gupta, Whole-time Director, and Mr.

Rajiv Goel, Executive Director. Now I hand over the call to Mr.

Anil Rai Gupta for his initial comments on the performance. Then we will open the floor for question and answer session.

Thanks, and over to you, Anil sir.

Thank you, and good evening, and wish you all a very happy New Year. Thank you once again for attending the call today.

Hope you would have reviewed the results by now. We delivered a healthy overall performance in the third quarter, which was primarily led by an accelerated growth in our cables business, driven by volume expansion and commodity price inflation.

While overall consumption trends remain modest, we did see some pickup during the festive season. Also there was a healthy uptake in demand for heating products, supported by a good winter.

As regards the cooling products, we saw a challenging environment in the last couple of quarters, however now the channel inventory is normalising. Overall revenue growth in Q3, backed by disciplined spend, translated into operating leverage, as the revenue grew by 14% and EBITDA was up 21% year-on-year.

During the quarter there was an exceptional item impact of 45 crores on account of additional provisioning pursuant to the new labour codes. We remain optimistic about a gradual recovery in demand, however we are cognizant of industry headwinds such as cost increases on account of commodity inflation, BEAT, WET changes, e-waste, etc.

We are in the process of taking calibrated price hikes and enhancing operational efficiency. We can now move to Q&A.

Good evening to the team. I have two questions.

My first question is to Mr. Gupta.

As Havells continues to expand across categories, how would you see the company balancing growth with profitability, especially given the margin pressures we saw this quarter? Over the next few years, what role do you see Havells playing in the renovation and customer experience?

How will you differentiate against the peers in the consumer electrical space? That's my first question.

I'll ask my second question after this. Thank you.

Your question was a bit breaking in between, but my line was not very clear. What I understand is how do we ensure that over a longer period of time we maintain growth as well as profitability?

I think this is a general philosophy and strategy of the company that we have always balanced growth and profitability, and we have achieved that through brand building, distribution reach, and innovation on the products itself. We are becoming a complete product portfolio in terms of electricals and electronics is concerned, and I would consider this as a strength rather than as a weakness, because this will give us more leverage at the channel, as well as utilizing the brand fully, as well as gaining operating leverage because of our large product range.

I think over a period of time we do see that the advantage of having innovation in product categories in all product categories that Havells operates in, that will be a big benefit and it should ensure growth as well as profitability expansion.

My second question is with revenue growth coming in, and margins may be under some pressure, how are you thinking about balancing cost discipline with investment needs for innovation and distribution expansion? As Havells scales further, what steps are you taking to ensure financial discipline while supporting long-term ambitions?

Thank you.

I think overall again you are alluding to the overall strategy of the organization. Look, the cost pressures are long-term as well as short-term.

Generally short-term pressures are sometimes absorbed and sometimes passed on to the market. The long-term cost pressures are achieved through efficiency improvement over a longer period of time with growth and bringing in operating leverage.

I think Havells has shown over decades and years that it has always balanced both growth and profit aspirations. I think the biggest thing is Havells has always remained very financially prudent in terms of whether it is in terms of managing working capital, in terms of inventories or receivables, but also in terms of capex.

I think we have been cautiously optimistic in ensuring that we have enough capacities built up for the incoming growth. It's always a balanced approach by Havells, and I think over the next few years this kind of an approach will continue, which is the mainstay of Havells.

Thank you for the guidance, and I wish the entire team best of luck for the next quarter.

Thank you for the opportunity, sir. My question is on wires and cables, couple of them.

First, if you could tell us the volume growth in terms of wires and cables separately. Second question is that copper prices have risen very sharply.

Natural wires must have seen higher inventoryization than cables. Since we are wire-heavy, can you tell us how much inventory is there in the channel?

Could that lead to a moderation for wires-specific cables? Last question within wires and cables is, in your opinion, I would just want to know that what happens if copper rises very sharply again from here?

Would that mean that there will be stress in terms of working capital at the dealers' end? If that is true, would that mean that the company would have to directly do B2B, which means eventually margins will taper off from here.

Those are my three questions. Thank you, sir.

First, can you repeat your first question? I got your second and third.

Can you repeat your first question?

Volume growth, sir. Individually in wires and cables, if you can call out.

Volume growth has been a good healthy double digit, over 20%. There has been a sharp increase in raw material prices, as you mentioned, which actually has given a sharp increase in revenue growth for both cables and wires.

As far as you are right that Havells is more wire-heavy, and there has been a decent amount of stock buildup at the channel level. There were continuous price increases in the third quarter and going into the fourth quarter as well.

If there will be sudden price movements, yes, there will be some amount of channel normalization, which can impact the volumes for some time. I think it all depends upon how the consumption in the market goes.

Some channel has gone from manufacturers to the retailers, and now retailers have to eventually sell the product in the market. As far as, I don't see any strategy change at least for Havells, that we would move more B2B-heavy than channel-heavy.

I think these kind of changes can happen. Yes, there could be, depending upon the raw material, there could be some price increases or reductions in the coming times.

It's very difficult to predict what the raw materials, how it will behave. For cables and wires business at least, there is far more predictability in terms of passing on price increases or price reductions.

Again, we have to see over a longer period of time or a mid-level period of time rather than one quarter to the next quarter.

Got it. Sir, and just one last question in terms of Lloyd or rather RAC industry-wide, can you call out what would be an average price hike that players will have to take?

If you could split it between BEE, copper and currency depreciation, that would be helpful.

I'm sorry, there is some echo. Can you repeat the question?

Sure, sir. Question on Lloyd.

Could you please quantify the minimum price hike that the industry will have to take on three aspects: one is the BEE rating, the other is copper, and the third is INR depreciation?

I think, and you also have to figure the GST reduction, if you take that out, I think overall there could be a 5-10% increase in this quarter.

Okay. Thank you so much, sir.

All the best.

Hi, good evening, sir. When we look at the segmental capital employed and segmental assets, it seems that inventory is still a little higher in case of Lloyd.

I guess this would be all in respect of old BE norm products, and I just wanted to understand how would we be able to liquidate the same, given that norms got revised in January? Is it that relabelling would be required, or will we be able to just sell it in the next couple of months?

I think we should be able to sell in the next couple of months. In fact, it's not only in air conditioners but also in fans.

There is some amount of residual inventory of the old BE norms, which get passed on during the season in the coming time. Usually the system is almost like FIFO, where we sell the old norms first and then the new norms start kicking in.

Understood, sir. In this particular quarter, do you anticipate different companies to be having different strategies?

Some of the companies which have already possibly sold a lot of old BE norm products to be moving to new BE norms, while some continuing to sell the old BE norm products, and therefore some confusion in terms of pricing as well?

No, I think usually the trade is very clear about the fact that when they are buying a product at a lower price, they are buying a lower BE material. This would not be a problem.

I think this kind of a transition has happened over the last few years, and the trade and manufacturers are quite mature about it.

Understood, sir. Just one last question.

When we look at wires and cables, volume growth—leaving aside the realization benefit, but volume growth generally also has been pretty robust in the last few years. The same, however, is not translating into growth for other categories.

I just wanted to understand why is there such a big mismatch? At some point of time, would you anticipate other categories to also start catching up to wire growth?

I think as far as wires is concerned, there is generally a match between other product categories, at least in the other product categories. Cables has been higher because of the government infrastructure spends and if you are taking about the last few years.

If we talk just about the last quarter, it's primarily some sort of channel stock buildup, which has happened, and that should get adjusted in the coming couple of quarters.

Sure, understood, sir. Thank you.

Hi, good evening. Thank you so much for the opportunity.

Just two questions. Firstly on Capex, I think we have done about 1,200 crore in 20 so far nine months.

I just wanted to know projects that are under construction right now, and my sense is a lot of expansion has been done in cables and wires as well as Lloyd I think should be under construction. Next year I would imagine it should be a lower budget for Capex fiscal 27.

Should we expect some lower capital intensity? That's the first question.

I think as far as cables and wires are concerned, there will be continued Capex in the coming year. Lloyd pretty much is done in this present year, but there will be a higher Capex spend for the new R&D center, which will come up.

Overall it should be in the range of another 1,000 crores in the coming year. And

right now what are the projects which are underway? if you could just highlight the segments?

As I said, right now cables and wires and Lloyd in this year. Cables and wires being the main thing, which is continuing, going to continue in the coming year, and the R&D center will also continue in the next year.

Got it. Sir secondly on the room AC side, you shared that there is a 5-10% price increase, inventory also you have clarified.

Just in terms of the production planning, because we have large capacities now under Lloyd. How do you see this overall industry panning out?

What kind of thought process would you have in terms of production planning for ref washing machines as well as for AC? If you just highlight some top-down thoughts would really help.

I think usually as a company we are far more positive looking and more optimistic as a company. However, given the very bad season in the last year, which has led to de-growth in the air conditioning industry as well as fans or air coolers also, I think we'll be a bit more prudent and just work along with the channel to see how the inventory is getting cleared and new inventory keeps going in.

We will have to act with optimism and prudence both in the coming couple of quarters for the summer products.

Inventory basically normalizes by March 26th, right? That's what we should build for Lloyd, right?

Inventory should get because season starts for south in February and March in north.

Got it. Thank you so much and all the best.

Thank you.

Hi, thanks for the opportunity. My first question was on ECD, would it be possible for you to share some color on how the sub-segment growth behaved?

What is the broad pricing growth contribution to this 4% growth in the quarter?

For which division, sorry? Sorry, can you just...

You are talking about ECD, Latika?

Yes, sir.

Yeah. ECD largely the growth has been led by also the winter products.

Winter has been pretty decent. There is a good growth in our OFR segment.

We continue to be the number one player in the country now in this segment. There has been decent growth there as well as water heaters.

Across, except for fans, which was still expected. I think they are having still the summer challenges, right?

they have been. I think all other categories have seen growth, and these are not largely driven by packages.

These are largely volume-driven growth in the ECD segment.

Sure. The second question was on margins.

A&P spends were lower on a YoY basis. Just wanted to check, which product segment is driving this?

At a very broad level, when you look at the next four quarters, any thoughts on the overall margin outlook, given, the company is going to face commodity inflation on one side, and then, your comment on modest demand outlook and competitive challenges on the other. How do you view, what's your best guess at this time?

How would you try to manage, revenue growth push versus the margins pressures? Thank you.

So

A&P spends is not something very specific in product category. I think this is pretty much across the board.

I don't think we have picked up any category and said let's stop investing in the A&P on that. I think you should see this.

If you see in the past we have commented that, you see, we have been investing decent into A&P, and this is normally driven by the demand and we see the need in the market. I don't think you should read too much into the A&P as to be tied to any particular product category.

As far as the margins are concerned, Latika, these fluctuations in the commodity prices definitely will have some degree of effect, and I think this tactical balancing between growth and margins will continue to play out. I think difficult to comment any specific on this, but as Havells' philosophy has been, I think we will continue to focus on margin improvement.

Even with these cost increases, I think there are possibilities of cost rationalization as well. I think it will be a mix of selective price hikes, managing the cost much better, productivity improvement.

There are a lot of levers which the company has, and I think we will definitely optimally use each of them to ultimately have a good balance between growth and profitability. Both objectives will continue to be paramount for us.

Understood. Thank you so much, and all the best.

Thanks for the opportunity, sir. First question is on the other segment.

We have seen pretty healthy growth now in the past few quarters, but margins seems to be quite subdued in that category. If you can talk about what is really driving or impacting the margins?

Is it ramp-up in solar, which might be low in the initial part of the ramp-up? If you can help us understand this and how big will be solar as of now for us?

Second question, sir, is on the ECG side. Do you expect further improvement with more price hikes?

If you can highlight in terms of price hikes, how much is still yet to be taken? Should we expect more expansion on the ECG margins as well?

Yes, I think in the other, solar is moving much faster than the other product categories, and that is why there is a large opportunity there, which does affect the overall margins, because right now it's getting balanced between utility type of orders and CNI and solution type of orders. It's getting balanced right now, but overall we have a very positive outlook for solar in the coming times, both in terms of revenue growth as well as margins expansion.

As far as ECG is concerned, look, it's a process which is on the ensuring that we come back to our normalized levels of ECG margins. That's going on.

It has definitely been impacted by sudden raw material price movements. How much of that can be entirely passed on to the market, that will only be seen during the season time for the fans.

I think it's difficult to give you a margin outlook at this point of time, but company always strives to improve margins. Again, we really don't compromise on margins because of volume growth in branded and distribution-oriented business.

That really doesn't play a huge role. ECG continuously there will be aspiration for growth and improvement of margins.

Noted, sir. Thanks a lot.

I will come back in the queue.

Thank you for the opportunity. My question is related to the solar, because in this quarter as well as in the nine months, other growth has been very good and driven by solar, what I believe.

Solar in that is a larger contribution is of a solar inverter for Havells right now?

No, it's module and both modules and inverter, but yes the growing is in the modules. The high growth is in the modules.

We have also tied up with invested in Goldi, which is helping us to get more strategic supplies from them. I think that was the purpose as well.

Yes, I think the growth in modules, the inverter is also there, but clearly outpaced by the modules growth.

Okay. Margin profile in this kind of a product is for single digit?

I would say early double digit to high single digit, depending upon the project. I think this quarter I don't think we should read too much into this, as I just commented.

We see good growth and a good opportunity even for profit, because I'm sure you are aware that Havells is a larger ecosystem to play in the solar segment. We are also trying to evaluate this from an entire renewable ecosystem perspective rather than just a solar module perspective.

That was the reason why we didn't go to just, you see, set up our own modules, because I think there is a larger ecosystem play which Havells can do, and that's what the entire focus is going to be going forward.

Sir. Thank you.

Next two clarifications I just wanted. One is related to the Lloyds, as you had mentioned channel inventory normalized.

Can you give the days, what the number of days for this normalized inventory right now for channel?

That will frankly difficult, but clearly it is much lesser than what used to be in the previous year. That was sort of we can say.

I think much more under control. Because, you see, channels are also slightly, because the weak summer you will appreciate, they also are slightly now wary of taking lot many stocks.

Gradually I think the situation is far comfortable at the channel level. Difficult to give specific numbers now.

Second clarification related to the price hike. As you said that the price hike requirement is of 5 to 10%, this is ex of GST corrections?

Yeah. Actually GST correction will help.

The end consumer price hopefully should not change much.

This 5 to 10% of a hike requirement may get adjusted with the GST correction?

That’s what our hope is, that the consumer pricing should not change much.

Okay. That's great help.

Thank you, sir. Thank you, and all the best.

Good evening, sir. Thank you for the opportunity.

The first question I have is, if you could, I know it's hard to call out, but broadly what I'm trying to figure out is, have we kind of maintained market share across our core key categories like switchgear, lighting, fans, any color you could provide on the market share trend, basis your internal, sir?

I think pretty much we would say that we would have maintained market shares in most of the categories. I would argue that we may have gained certain market share in lighting because we do see that, our growth or lack of it has been better than the competition.

In terms of small domestic appliances, even water heaters, we do see that we may have done better in the industry. I think overall, we do feel that we have either maintained or gained some market share in certain product categories.

And

how about cables and wires, sir?

Cables and wires, I think, primarily we would say that because our wires business is primary, because we, as compared to competition, who are focused more on the industrial cables, they are still waiting for our full capacities to get built. There I would say that, our growth would be lower.

In terms of domestic wires is concerned, we do believe that our market share is quite intact.

Perfect. The second question I had, just a clarification, did I hear right Rajiv said about the inventory, RAC inventory in the channel for the industry, is actually lower than last year?

How do you right, sir?

I think what Rajiv meant is that last year, usually the stocking time, which is December to February, there is a heavy amount of stock push into the channel. In this year, because the channel already has some old stock plus they are also waiting for the summer season to start kicking in, I would tend to agree that the channel in many cases would actually be channel inventory might be lower.

We'll actually see real sales number coming, start taking in rather than just sales out of the stocks which already had been built in the channel.

Got it. Just a last clarification, in terms of the copper, aluminum, currency, etc., for fans particularly, what kind of price increase is required actually to offset this cost inflation?

Just the way you called out.

It all depends upon the day that you are asking this question, because, December price requirement. Yeah.

December, we believe that we have passed on some price increases which were required for the December materials, but the pricing continues to keep going up. You've seen copper, which seemed very high at 12,000 last month, is now trading at 13,000.

As I said, sometimes it takes some amount of time to fully absorb the price increases, even in the minds of the teams in the channel, and finally goes into the consumer. I would say that we have been able to pass on the price increases up to at least, what our thinking was for December, and we will continue to evaluate, what is the pricing right now, and we will see how the season pans out.

Got it. Thank you so much and wish you all the best, sir.

Thank you.

Thank you for the opportunity, sir. First one is on the cables and wires side.

When we look at the contribution margin, it has almost declined by 200 basis point quarter on quarter. What led to that?

If you can also quantify what was the capacity utilization for cables and wires in 3Q?

Can you repeat the question, please?

Yeah. I was asking what led to the contribution margin decline of 200 basis point quarter on quarter in the cables and wires segment, and what was the capacity utilization?

I think there is contribution improvement H2C wire and wire, and quarter on quarter again, as probably mentioned by Rajiv, it's very difficult to read on a quarter-to-quarter basis depending on which inventory is getting pushed out in the system. I don't think we should read too much into that.

As far as capacity utilization is concerned, as far as wires is concerned, we are fairly comfortable with our capacity. It's operating usually between around 65-70%.

As far as cables are concerned, we are, as I told you sometime back, that we are building capacity. Usually cable capacity is running at almost 90-200%.

Sure. The last question is on the employee cost.

If I look at the absolute employee cost, last almost seven quarters has been in a narrow range of between 460 to 490 crores. Given the growth outlook and as we build up capacity, will you see employee cost kind of on an absolute basis going up, or do you think you have already invested in, creating a bench, employee cost should be at the current level for the next, say, 12 months?

It's difficult to say it's going to be same because there are usual normal increments and build up. We have always maintained that over the last five years or so, Havells has built a good talent pipeline and has invested before growth.

There will be, I would say operating leverage coming out in the coming years, but holding on to an absolute number, which I think will be foolhardy.

Sure, sir. That's all.

Thank you.

Hi. My question is regarding on the solar segment.

Basically how much we are going to invest into the Goldi Solar, and the Goldi Solar is also investing into the backward integration of cells kind of thing, its manufacturing? Which kind of cells, they are manufacturing, the kind of technology they are using?

Goldi, we have already disclosed we invested around 600 crore, and I think on the cell side we will come back. I think this is still being implemented by them.

Your specific questions being technical in nature, I think we will revert to you independently on this.

Okay. The strategy is to, if let's say they are also investing into the backward integration of cell and manufacturing.

The idea is to purchase cells from them and then assemble in-house kind of thing, assemble in-house modules and then sell it, right?

Module is being manufactured by them. I think you need to understand the investment we have done in the last quarter.

I think you are not updated on that. We invested in the company, Goldi Solar.

We did into manufacturing of modules, and now we are backward integrating on cells. We have no plans to manufacture modules on our own.

Okay. Basically we are purchasing modules from them and then booking in our own.

Right now, what we are doing in solar, just new for the company, we just want to understand solar.

Solar, we are a full service provider. We are doing inverters, we are doing solar modules, we are doing switchgear, we are doing cables, we are doing wires.

We are selectively doing even EPC. I think the strategic investment in Goldi was to ensure that we have a steady supply of modules available, and I think they will also then invest backward into cells and maybe wafer at some point.

As of now we are assembling the modules our own in-house before the investment of Goldi.

I suggest you contact our IR team to understand this transaction in full. Maybe this is not the right forum in this case right now.

Thank you.

Sir, thank you for taking my question. This is Pulkit Patni from Goldman Sachs.

My question is on cable and wire, and in one of the previous questions you answered that we'll continue to invest in more capacities for cables and wires. My question is, when we speak to all the companies in the sector, everybody wants to invest more capital because at this juncture demand is strong.

Some of your large competitors are also looking at export as a big opportunity, and that becomes the plan B in a scenario that there is some slowdown in India. I just want to understand for our portfolio, which is more wire heavy, assuming a scenario of some slowdown in the domestic market, is export an opportunity A that we are exploring?

Second, have we done some work in order to get some approvals from various countries and their utilities, etc.? It would be helpful to just get some perspective on your cable and wire export opportunity and anything you are doing on that front.

Thank you.

I think cables presents a very good opportunity for exports as well, and as you rightly said, it can provide a good hedge against some sort of demand neutralization within the country in the coming years. We are on that process.

We are tracking well. Our cable growth was very good last year in terms of exports.

This year, unfortunately, we have been hit by the tariffs, and there is lesser demand from the U.S. market, which was turning out to be a good export market for Havells cables as well.

Hopefully in the coming times, this effort will continue towards looking at more and more export markets for the underground cable business also.

Sure, sir. This is useful.

Thank you so much.

Hi, good evening, sir. A couple of questions.

First, broadly on the SMEG segment, just trying to get your perspective. Do you think it has lost its old mojo where demand has been consistently weak for a few years?

There is hyper-competitiveness. The brand pull also has started getting diluted, and even category leaders, have struggled to hold on to their pricing power and margins in the last few years.

Somewhere you think that this category itself now has relatively become weaker compared to some of the emerging segments like cables and wires, which are holding both from B2B as well as on the B2C and export part of the business, or it's a cyclical downturn, which you think should recover in a couple of years from that perspective.

I think two or three things I would say to this. There are cycles obviously in every market, but sometimes post-COVID there has been a situation where one, the post-COVID demand cycle was not at the same level.

In hyperinflationary situation, which has happened especially in the electrical sector, sometimes unorganized and regional competition also starts gaining some ground, which we do believe that they take certain market share. Over a long period of time, if you see, established brands have taken share from the unorganized sector, but I think not purely unorganized, but certain regional brands also start gaining ground due to market, lower expenses.

I think over a longer period of time, I don't think India demographics are such where we will continue to see tepid demand in these categories. We are quite hopeful of the future.

Yes, in the last couple of years, there could be reasons where we've not been able to see so much growth in demand, at least for the established brands.

Got it. Secondly, when we set up the second factory for RLC in South in Shee city, there were also plans that we would look seriously at export opportunities both for finished RLC plus white labeling and probably component exports also.

Any development or movement on that side of the business, or it's still domestic-centric today?

No, I think it is primarily domestic-centric. There has been good efforts made in various markets, but as I said, a lot of our exports efforts were also made in the U.S.

by setting up a subsidiary there. Things have slowed down, especially after the tariff situation.

I think hopefully in the coming times this should improve, and we'll continue to keep looking at more export opportunities for air conditioners as well.

Last question, in the last quarter, we have seen quite a few senior-level recruits and the business team, both for solar, cables, and other businesses. Specifically on the solar part of the business, now that senior leadership has taken charge and there are plans, not just solar but overall renewable play, at the company level, from a three- to five-year perspective, what would be our growth ambitions for this segment, renewables as a whole?

I think we are quite hopeful because overall the way Indian economy is moving, there is good opportunity in this segment, and I think Havells has a good brand and channel to operate in this area. I think the way things pan out, we're making the right moves in terms of investments into the business, with hiring the right team, creating a separate business unit out of it.

I think over a period of time, let's see how it pans, and we'll come back to you with more detailed information in the coming times.

Any quantifiable targets for a three-year, five-year perspective?

We generally don't keep any targets. We do believe in no targets in the company.

Got it, sir. Thanks and all best wishes.

Thank you. Thank you.

Thank you.

Thank you very much. Thank you, everybody, for joining in late in the evening.

It was a very insightful call, and I thank you once again for all the people joining in. Thank you.