Updated on: 2026-02-11 As of: 2026-02-11 Latest price: Rs 1,650 (NSE) as of 2026-02-10 close Market cap: Rs 1,04,000 crore Latest earnings period: FY26 Q3 (ended Dec 31, 2025) Key sources: https://www.angelone.in/news/stocks/havells-india-share-price-drops-reports-revenue-growth-in-q3-fy26-results; https://www.moneycontrol.com/markets/financials/quarterly-results/havellsindia-hi01/; https://havells.com/corporate/investors/financials

Event: Havells India reported Q3 FY26 results with revenue up 14.2% YoY to Rs 5,573 crore, EBITDA up 21.4-21.6% to Rs 524 crore, but net profit up only 6.4-8% to Rs 300-301 crore, missing estimates. Date: Early February 2026 (results for quarter ended Dec 31, 2025) Why the Market Reacted: Revenue beat expectations driven by 33% cables growth, but profit miss due to contribution margin dip to 19.6% signaled margin fragility despite EBITDA gains, causing 3% share price drop. Why This Is Not Just News: Q3 highlights cables strength but masks consumer durables' tepid 4% growth and rising input volatility; deeper analysis tests if premiumisation can sustain 15-20% margins long-term amid competition.

Havells' growth hinges on cables offsetting consumer durables' margin erosion from premiumisation challenges, but input volatility and competition could cap returns unless costs stabilize.

Havells generates revenue through a diversified portfolio: cables & wires (~40% of revenue, high growth from infra), switchgears (~11%), and electrical consumer durables (fans, lights, appliances ~20-25%). Lloyd (ACs, refrigerators) adds FMEG exposure. Profits stem from branded premium products (60%+ market share in fans), with contribution margins historically 20%+, but Q3 FY26 dip to 19.6% shows vulnerability. Cables drive volume (32% YoY growth to Rs 2,241 cr) via govt capex, low margins (8-10%) but scale. Consumer durables rely on premiumisation—higher ASPs from energy-efficient models—but face unorganized competition and price sensitivity in tier-2/3 India. Distribution (1 lakh+ outlets) and exports (10-15%) provide moat, but working capital intensity rises with inventory for seasonal demand. Balance sheet strength (Rs 1,873 cr cash, net debt free) funds capex (Rs 500-700 cr/year for capacity), but ROCE ~25% depends on 15%+ revenue CAGR. If cables peak with infra cycle, durables must deliver 12-15% growth at 18% margins; otherwise, EBITDA growth stalls below 15%. SEBI-mandated disclosures show steady dividends (Rs 4/share interim), signaling confidence, but capex returns lag if demand softens.

Revenue acceleration QoQ signals demand recovery, cables-led; EBITDA margin stable but contribution dip warns of pricing power loss. Net profit lag reflects higher opex/depreciation from expansions. Trends healthy if sustained, but Q3 <90 days old—watch FY26 H2 for confirmation amid monsoon/inflation cycles.

Investors applaud cables growth and 'premiumisation tailwinds' in durables, assuming 15-20% CAGR persists, but overlook segment skew: cables (low-margin, cyclical) now 40%+ revenue vs historical 30%, risking portfolio if infra spend slows (RBI capex warnings). Consumer durables grew mere 4% YoY despite 'summer recovery,' as premium ASPs face resistance—competitors like orient electric undercut on price, eroding 20%+ margins unless volumes double. Input volatility (copper up 10% CY25) hit pass-through, with Q3 margin contraction signaling forex/China import risks. Market ignores execution gaps: Lloyd AC share <10% despite Rs 1,000 cr+ capex, as inventory piles amid weak rural demand (NSSO data shows 5% real wage growth). Balance sheet hides capex drag—ROCE could dip below 20% if returns take 2+ years. Non-consensus: premiumisation fails if urban saturation hits (fans penetration 90% metros); thesis breaks if cables growth <20% and durables <10%, yielding sub-12% EPS CAGR vs priced 18%. SEBI scrutiny on related-party (Sylvania) could add noise.

Valuation embeds 18% EPS CAGR and 18-20% margins through FY28, leaving no room for Q3-like misses. If growth slows to 12% (durables drag), fair P/E drops to 45x, implying 30% downside. Premium to peers prices brand moat, but erodes unless ROE >25% sustained.

Base (50%) assumes cables 20% growth offsets durables 10%, margins hold 10%. Bull needs premiumisation success (Lloyd share to 15%); bear if copper spikes 20% and rural slows (prob weighted return ~12%). Upside capped by competition.

• Cables growth <15% YoY for 2 quarters, as infra capex defers (union budget dependent)
• SEBI/RBI norms on MSME lending tighten working capital, raising debtor days >90
• Net debt >Rs 2,000 cr or ROCE <20% from capex overruns in Lloyd expansions

Havells trades premium to wires peers (Polycab) on consumer brand, but discount to Abb on ind'l exposure/margins. Deserves slight premium if durables scale, but discount if cables cyclicality dominates vs Polycab's steady wires.

• Contribution margin quarterly (target >20%; <19% signals pricing weakness)
• Management guidance on Lloyd AC volumes and capex utilization in FY26 H2 concall
• Copper prices and rural demand proxies (RBI CPI, auto/2W sales) as premiumisation litmus

Havells offers diversified electricals play with cables momentum, but thesis pivots on consumer durables reclaiming 12%+ growth at stable margins amid volatility—Q3 profit miss underscores fragility. Uncertainty lies in input pass-through efficacy and premium products' rural penetration; if cables fade post-infra peak without durables offset, returns disappoint vs peers. Balance sheet buffers downside, yet 70x valuation demands execution. Investors should monitor Q4 margins and Lloyd traction; thesis fails below 10% CAGR or ROCE <20%. Evergreen watch: segment revenue mix shift and capex ROI over 12-18 months.