Havells India (HAVL IN) – Q2FY26 Result Update – Weak ECD & Lloyd with inventory liquidation risk – Accumulate
Published on 19 Oct 2025
Havells reported moderate growth in Q2FY26, primarily impacted by declines in the Lloyd and ECD portfolios, which were affected by ACs, fans, and air coolers. Elevated inventory levels in cables and Lloyd led to higher working capital. Inventory is expected to be largely liquidated by Q3FY26, while working capital is expected to normalize by Q4FY26. Wires registered mid double-digit growth, while cables delivered strong growth and LED pricing stabilization supported lighting segment revenue. Company has introduced consumer offers to support secondary sales of RAC owing to a weak summer, which have been withdrawn following GST changes. Growth momentum is expected to pick up in the solar portfolio and W&C segment, supported by recent capacity expansions. Contribution margins, currently impacted by underutilization, high fixed overheads, and elevated inventory levels, are expected to stabilize and improve in the coming quarters. We estimate revenue/EBITDA/PAT CAGR of 11.5% / 12.9% / 13.3% with ECD/Cables/Lloyd revenue CAGR of 8.4%/17.4%/6.0% over FY25-28E and EBITDA margin of 10.2% by FY28E (+40bps). Maintain ‘ACCUMULATE’, with TP of Rs1,653 (same as earlier), based on DCF, which implies 52x FY28E earnings.
