Havells India Q2FY22 Conference Call Highlights

2 min read
  • Healthy growth across business verticals
  • Omnichannel strategy including online, rural, modern trade and enterprise business penetration playing out well, adding new customers and broad basing demand channels
  • There has been increased conversion in projects and B2B
  • Increase in commodity cost remains unabated with severe escalation in a rather short period
  • Price increase have been staggered creating a lag effect on margins. However, they maintain a positive outlook on demand growth which could support margin as well
  • Switchgear growth reflecting real estate upcycle
  • Higher commodity prices contributed growth in Cable & Wires
  • Lighting has been beneficiary of deeper penetration and new launches
  • Industrial and infrastructure expected to remain strong
  • Ex cables revenue growth: 50% growth was due to commodity price increases and 50% due to volume growth.
  • For the cables segment 80% growth was due to commodity price hikes.
  • Capex plan (Capital expenditure): INR 300 to 350 Cr for FY-22.
  • Applied for PLI scheme for components manufacturing in Air conditioning category. Full details will be available once the government approves their application.
  • In others segment, motors are doing well. It will take a couple of years for the others segment to contribute a good portion to the revenue mix.
  • In the Lloyds segment, 70% of the revenues comes from AC’s (Air conditioners)
  • Inventories are at normalized levels.
  • Supply chain disruptions is minimal for Havells because 90%+ of its production capacity is in house.
  • Adequate price increase in Lloyd has been challenging due to hyper competitive environment. Margins were further impacted by under absorption of overheads due to lower production.

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