HAVELLS

Q4FY26 Hit by Costs, Lloyd Weakness

reported a muted Q4FY26, with EBITDA down 6% YoY to ₹724 crore despite modest revenue growth of 2.4% to ₹6,688 crore. Higher input costs, advertising expenses, and weak consumer demand weighed on profitability. Shares fell 5% post-results, extending a year-long decline of over 20%. Analysts cut earnings estimates, citing persistent challenges in the Lloyd Consumer segment and rising competitive pressures. Segmental Performance Lloyd Consumer (ACs, refrigerators, TVs): Revenue down 19% YoY in Q4; FY26 revenue fell 23% vs. +35% in FY25. Reported EBIT loss for the fourth straight quarter (–₹203 crore vs. +₹131 crore in FY25). Hit by energy efficiency norm changes, copper price inflation, and rupee depreciation. Price hikes of 8–15% taken in Q4, but further increases needed. Cables & Wires (C&W): Revenue up 14% YoY in Q4, driven by industrial demand. Largest segment, contributing 37% of revenue and ~50% of EBIT. Expanded capacity to be commissioned by end-FY27, though new entrants may intensify competition. Others (renewables, solar pumps): Revenue up 48% YoY in Q4, +25% in FY26. Currently 8% of revenue, but seen as a medium-term growth driver. Financials & Outlook FY26 revenue and EBITDA both grew just 3% (vs. 17% and 16% in FY25). Analysts (Nomura, Nuvama) cut earnings estimates post-results. Valuations remain steep at ~40x FY27 EPS (Bloomberg consensus). Near-term growth may benefit from a weaker monsoon and extended summer boosting cooling product demand. Sustained recovery hinges on Lloyd’s turnaround in volumes and margins. Conclusion Havells’ Q4FY26 highlights a mixed performance: strong cables & wires and renewables offset by Lloyd’s persistent weakness. With input cost inflation and competitive intensity clouding margins, the company’s premium valuation looks demanding. A meaningful recovery in Lloyd Consumer is critical to restoring profitability and investor confidence.