Havells powers through inflation, bets on renewables and brand push for stronger FY27

MUMBAI: If there is one thing Havells appears determined to switch on this year, it is growth. Even as inflation, volatile commodity prices and geopolitical tensions cast a shadow over the market, the electrical goods maker says resilient consumer demand, calibrated pricing and an aggressive brand-building strategy have put it on a firmer footing for the rest of FY27.

Speaking during the company’s first quarter FY27 earnings call, Havells said revenue growth remained strong despite raw material inflation and uncertainty stemming from the West Asia crisis. A reasonably favourable summer supported demand for cooling products, although a delayed onset of the season limited the full upside. To protect margins, the company introduced staggered price increases across categories, a move that management said consumers largely absorbed without denting demand.

The company has also begun reporting its renewables business as a standalone segment, reflecting its growing strategic importance. Management believes the business is benefiting from strong industry tailwinds and expects it to become a much larger contributor over time.

Havells India chairman and managing director Anil Rai Gupta said the company had delivered strong revenue growth despite inflationary pressures and geopolitical uncertainty. He added that the renewables business continued to scale rapidly and that advertising investments, which more than doubled year on year during the quarter, would normalise through the remainder of the financial year while supporting long-term brand growth.

The higher advertising and promotional spending weighed on quarterly profitability, but Havells described the move as a deliberate front-loading of investments rather than a structural shift in spending.

Management explained that the strategy reflects a reallocation across media channels and product categories rather than a permanent increase in expenditure.

Havells India chairman and managing director Anil Rai Gupta said advertising should be viewed as a long-term investment rather than a short-term expense. He noted that spending was intentionally concentrated in the first quarter to support seasonal categories and would gradually return to more normal levels during the year.

On pricing, Havells said commodity inflation had forced increases across multiple product categories, with average hikes ranging between 7 and 8 per cent. In categories such as cables and wires, where copper and aluminium costs have risen sharply, price increases were even steeper, reaching as much as 20 per cent in some cases. Management believes most of these increases have now been passed on to customers, paving the way for more stable contribution margins in the coming quarters.

The company remains optimistic about its renewables business, where growth has been driven largely by demand for solar panels. While panel sales currently carry lower margins than inverters, Havells expects profitability to improve as its portfolio expands into more consumer-oriented products, including battery energy storage systems, EV chargers and rooftop solar installations for residential and commercial customers.

Havells India executive director Rajiv Goel said the company expects margins in renewables to improve as it expands further into consumer-focused products. He added that strong policy support and favourable industry trends continue to strengthen the long-term outlook for the business.

Havells is also investing heavily to support future growth. The company plans capital expenditure of around Rs 1,400 crore during FY27, with nearly Rs 800 crore earmarked for expanding cables and wires capacity and about Rs 200 crore allocated to a new research and development centre. The remaining investment will be spread across other business segments.

While exports of switchgears were disrupted by the West Asia crisis, affecting around 15 per cent of the segment’s business, management expects international shipments to recover from the second quarter as logistics conditions improve. Domestic demand, meanwhile, has remained relatively stable.

The company also acknowledged that Lloyd’s air conditioner business delivered only single-digit volume growth during the quarter, although value growth remained stronger because of calibrated price increases. Havells said it has shifted its distribution approach towards improving retail sell-out rather than merely pushing inventory into the channel, a strategy it believes will strengthen long-term market performance despite temporarily affecting primary sales.

Although Havells stopped short of offering formal financial guidance, management struck an optimistic tone on the remainder of FY27, pointing to stabilising margins, resilient consumer demand, expanding renewable opportunities and continued investment in brand strength as key drivers. With commodity pressures beginning to ease and strategic bets taking shape, the company believes the groundwork has been laid for steadier growth in the quarters ahead.