Havells India Ltd (HAVELLS) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (DAM Capital Advisors Limited): Ladies and gentlemen, good day, and welcome to Havells India Limited Q2 FY '27 Earnings Conference Call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note, this conference is being recorded. I now hand the conference over to Mr. Tanay Shah from DAM Capital Advisors Limited. Thank you, and over to you, sir.
Tanay Shah (DAM Capital Advisors Limited): Thank you, Naznin. Good afternoon, everyone, and welcome to Havells' 2Q '27 Earnings Conference Call. Today we have the management with us, being 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. At this point, I will hand over the floor to Mr. Anil, sir, for his initial remarks, post which we'll open up the floor for Q&A. Thank you, and over to you, sir.
Anil Rai Gupta (Havells India Ltd): Thank you, Tanay. Good evening, and thank you for attending the call today. Hope you would have reviewed the results by now. We delivered a strong performance in the second quarter with revenue growing 35% year-on-year. During the quarter, each of our categories grew with healthy contributions from both our established categories, including cables and switchgear, as well as the emerging renewables category. Encouragingly, the consumer demand remains steady despite the inflationary environment. During the quarter, we've also undertook calibrated pricing action in response to the sharp rise in raw material costs witnessed over the past several months. Contribution margins were softer year-on-year, primarily due to cables, where a decline in aluminium prices during the quarter impacted margins, particularly against a strong base last year. For H1,
Anil Rai Gupta (Havells India Ltd): Cables contribution margins were approximately 15%, broadly in line with the long-term average. In rest of the portfolio, margins held up well supported by pricing actions that helped offset raw material inflation. Lloyd also delivered healthy revenue growth, supported by both volume and value growth. Margins, however, remained subdued with raw material inflation as well as seasonal under-absorption during the off-season. At an overall level, operating leverage supported healthy EBITDA growth of approximately 30%. PBT growth was relatively moderate, primarily due to the higher base arising from a one-time gain in other income in the corresponding period last year. Looking ahead, while macroeconomic uncertainties persist and commodity prices remain elevated, we enter the festive season with a positive outlook on both demand and margins. With that, I would like to wish all of you and your families a very happy festive season, and we can now open the call for questions.
Moderator (DAM Capital Advisors Limited): Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Moderator (DAM Capital Advisors Limited): The first question is from the line of Natasha Jain from PhillipCapital. Please go ahead.
Natasha Jain (PhillipCapital): Thank you for the opportunity. So, my first question is on switchgear segment. The growth has been quite strong. Could you break it down in terms of what is the spillover impact of quarter one order here and how much pricing growth we have taken here?
Anil Rai Gupta (Havells India Ltd): So, you know, there's not much of quarter one I would say spillover, because as you would realize that we are our major business comes from residential switchgear, which is not really order input based in terms of long-term orders. It's primarily a lot of B2C sales through the channel network. We do believe that overall there is a very good, positive growth over the first six months. There is a bit of a higher impact in the second quarter because first quarter growth was muted because of some pricing actions that were taken due to sharp raw material price increases in the first quarter. But I think the markets have settled down now with the price increases, and so second quarter is a regular demand which has come from the market. And I think overall volume growth has also been healthy, closer to double digits, because switchgear value growth is not the same as cables wires, so switchgear volume growth has also been healthy.
Natasha Jain (PhillipCapital): Understood. Sir, and in terms of margins, if I see last year, last quarter, and this quarter, variation is quite high. Any changes in terms of the long-term or medium-term guidance here for switchgear margins?
Anil Rai Gupta (Havells India Ltd): I think switchgear margins are actually coming back to normalized levels, which always used to remain between 38% and 40%. We had seen some reduction in the last year due to sharp raw material volatility. But as we had maintained that we will be taking pricing actions as the market stabilized, so that that has now started coming to our 38%, 39% contribution margins. I mean having said that, we do see you know raw material challenges even in the second quarter, for which certain more actions are being taken in the third quarter as well.
Natasha Jain (PhillipCapital): Understood, sir. That's helpful. My second question is on Lloyd. Now if I see that top-line growth, that's been quite strong. Margin, while you've mentioned there has been under-absorption. So first of all, could you break down that 28% also in terms of volume and pricing?
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