Havells India Ltd Management Discussions

Overview & Outlook

The year gone by was marked by heightened global uncertainties, geopolitical tensions and fluctuating commodity prices. The overall trade environment continues to be evolving as multiple announcement around trade tariffs took place. On this backdrop, India continued to show resilience, supported by steady GDP growth. The Indian economy remains well placed with strong fundamentals, a young population and its rising position as a global services provider and an emerging manufacturing hub. However, inflation stayed elevated, impacting disposable incomes and consumer spendings. To support consumer sentiment and liquidity, measures were announced including income tax relief and monetary policy cuts. A good agricultural season supported rural markets. The year experienced a strong summer season, with extreme temperatures, positively contributing to the demand for cooling products, especially in lower-penetration categories, like air conditioners and air coolers. Over the last few years, real estate launches have seen strong growth, while the benefit of these launches is yet to be reflected in electricals and consumer durable segments. Infrastructure and industrial activity-led demand remained steady during the year.

Artificial intelligence (AI) and digital technologies continued to gain ground, opening new areas of application and differentiation. Product development and innovation was targeted towards consumer value, energy efficiency and smart features.

With presence in multiple product categories in electricals and consumer durables addressing consumers as well as businesses, Havells is well placed to create sustained value. Backed by strong in-house manufacturing, robust R&D setup and a wide distribution network, Havells continues to drive brand strength, product innovation and profitable growth.

Segment-wise overview including industry structure, developments and outlook

Switchgear

The Strategic Business Unit (SBU) comprises Building Circuit Protection (BCP) equipment, switches and automation solutions, also called Electrical Wiring Accessories (EWA) and industrial switchgear. Havells is a pioneer in understanding changing customer requirements and filling any vacuum with well thought through advanced products. We introduced Arc Fault Detection Device (AFDD), offered as a preventive measure against starting of electrical fires due to arc faults. Our AFDD is in accordance with IEC 62606: 2017.

We have also launched energy IoT-enabled energy monitoring devices called EnTrack (Energy Auditor), a personal home assistant device which monitors the energy consumption and analyses the same on a real time basis. EnTrack can provide the extract energy consumed by each appliance in the household, by using non-intrusive appliance load monitoring (NILM) technology.

In the industrial switchgear segment, Havells LV switchgear portfolio offers a complete range of circuit protection for the rapidly urbanizing Indian market. Havells continued to invest in R&D and introduced technology-driven power gear products, like the TRON range of circuit breakers (ACB and MCCB) for most common protection from 25kA to 100kA breaking capacities. Also, a new range of transfer switches (Insta-shift) was launched. This year we kicked off our efforts on solution offering with new range of IEC 61439 type tested enclosed solutions for general and commercial distrbution with our HiConn and HiPan panel offering.

In FY 2024-25, we made good headway with the new Adiva and Magnus switches ranges. These newly launched ranges have gained mainstream momentum and are contributing well to our growth. The wide variety of designs and the strong value proposition of both ranges has been widely appreciated by customers. In FY 2024-25, we also showcased our upcoming premium Apogee range which promises to be an ultra-premium collection of switches and plates for the luxury customer. The New Apogee range brings together a huge variety of Avant grade materials and finishes, never seen before in the Switches segment. From the Ethnic plates with heritage designs to the Satin collection with delicate inlays, the Apogee range truly embodies the "Pinnacle of Perfection" promise for the luxury customer. The new Apogee range will be taking us deeper into the Architectural segment with bespoke solutions for the luxury customer. This will further help enforce Havells Crabtree as a premium offering.

Havells developed customized SKUs specifically for Indian Railways, which will be installed in their premium trains like Vande Bharat. These SKUs were created in close consultation with Indian Railways, ensuring they meet the high standards of safety, efficiency, and reliability.

The Switchgear segment registered net revenues of 2,395 crores during FY 2024-25, with contribution margins at 37.9%, compared with net revenues of 2,245 crores with contribution margins at 40.2% during FY 2023-24.

Cable

This Strategic Business Unit (SBU) comprises power cables and flexible cables. The segment witnessed steady growth during the year, supported by infrastructure expansion, rising private sector investments and improving renewable energy adoption. Increased spending on logistics and industrial corridors along with rapid electrification and revamping of the distribution sector fuelled demand for the segment. Additionally, the growth of the data centres, expansion of railways and metros, telecom and IT sectors contributed to the overall demand.

To address capacity constraints, during the year, Havells commissioned its power cables & flexible cables plant in Tumakuru, Karnataka. We are also expanding capacity in a phased manner at the Alwar facility. Further, an additional investment of 450 crores for the next phase of expansion of the Tumakuru plant was announced primarily for higher sized cables. The production is expected to commence by September 2026. While strengthening our domestic presence and capacities, we also expanded in international markets and made in-roads in new continents.

In flexible cables, the industry is witnessing a shift in class-5 flexible cables in the trade market, catering to evolving customer preference for an economical range of products as well. Havells reinforced its positing in the market through continued expansion into semi-urban and rural markets via a multi-brand & GTM strategy.

Looking ahead, the sector is poised to leverage emerging trends such as digitization and government-led initiatives to sustain growth, albeit while navigating heightened commodity price volatility.

The cables division registered net revenues of

Rs. 7,184 crores during FY 2024-25 with contribution margins at 14.1% compared with net revenues of Rs. 6,318 crores with contribution margins at 15.0% during FY 2023-24.

Lighting

Havells Lighting business comprises two business units (BUs) – consumer lighting and professional lighting. FY 2024-25 was a challenging year for the lighting industry as the overall market growth was impacted by macro factors, particularly continued LED price deflation. The consumer demand trends remained benign alongside some moderation in government capex-led project demand. However, Havells continued its sharp focus on product innovations and customer orientation, enabling strong resilience in a tough business environment. The innovation and manufacturing-led strategy helped Havells to not only deliver differentiated solutions, but also strengthened its value proposition across customer segments.

In Professional Lighting, with a segmented customer approach, Havells was able to build deep engagement with its customers, which helped in solving customer problems. For Industrial customers, Havells introduced high-performance Highbays, delivering 30% higher energy efficiency than the standard offering. Havells also launched a unique Highbay lighting solution for the tyre industry, which delivers reliable performance even in a phosphorous environment, while also saving 25% in energy.

For modern office workspaces, Havells launched a series of indoor architectural lighting solutions that are not just aesthetically impressive and but also helping customers comply with WELL standard requirements. With continued focus on Workspace Wellness, Havells launched a breakthrough product - Vita Dlight - which brings the goodness of sunlight right inside homes and office. Designed with special LEDs, the Vita Dlight Panels and Downlights deliver UVB rays alongside visual lighting. UVB rays present in the sunlight are responsible for production of Vitamin D in the human body.

Havells has built a strong capability in architectural fa?ade lighting segment with inhouse capabilities in areas of lighting design, 3D simulations, design walk-throughs, speciality optics, customized product design and manufacturing. One of the prominent structures that Havells illuminated this year is the Naini Bridge. Located near the Triveni Sangam at Prayagraj, the dynamic lighting of the bridge has been accomplished by using high-performance narrow-beam floodlights and specialized linear fixtures that not only provide precise beams but are also customized to withstand high vibrations.

We executed many lighting projects across Public and Infra segments, like railways, metro, MES, municipal corporations, development authorities, public sector undertakings, etc. Havells has been a leading supplier of innovative light fixtures for canopy lighting of several petrol stations by powering hundreds of outlets. Our streetlight solutions with high-performance optics continue to deliver value in NHAI installations by increasing the ROI for contractors and continuing to be the brand of choice.

Todays consumers, embracing their own uniqueness, have a choice of designs that reflect their personalities and match their decor, whether at home or work. Lighting design plays a vital role in enhancing the living spaces. Havells consumer lighting business launched variety of products and categories focused towards emerging consumer trends and lifestyles. The product range under Home Art Lights thematic signature collections – Johari, Rangmanch, Aakriti and Aada got amplified offering more elegant choices to our consumers based upon choice of substrate, form factors, sustainability, etc.

This year, we also launched our smart lighting range under the GenieLit brand, which offers seamless connectivity to the end-users. This range is backed by BLE mesh technology ensuring higher scalability and is not dependent on WIFI. We also expanded our solar range in our Sunlit Series, offering more application-based options to the consumers. Our flagship decorative range of battens – Glamtubes, just got an upgrade with new variants inspired from the constellation and now offer more functionality to the end users. Addressing the growing demand in the ceiling category, we launched our exquisite range of COB spot lights – Crysta Deco in both surface and recessed.

The demand for premium lighting is on the rise. Havells Home Art Light is a one-stop shop for all things lighting – from basic to high-end, from minimalistic to opulent or ornate, as well as luxury lighting solutions. We have 50+ Home Art Light Brand stores with experiential zones that provide consumers an opportunity for the real light experience.

Influencers play a critical role in lighting design and strengthening our association further. This year, we have partnered with prominent influencing bodies to build a framework for systematic engagement with prominent architects, consultants and designers. Ensuring our omni presence approach, we also have ramped up our efforts to be accessible to consumers through alternate channels like MFR, e-commerce and quick commerce offering uniform experience online and offline.

The Lighting division registered net revenues of 1,653 crores during FY 2024-25 with contribution margins at 32.6% compared with net revenues of 1,627 crores with contribution margins at 30.1% during FY 2023-24.

Electrical consumer durables (ECDs)

This SBU comprises fans, small domestic appliances and water heaters. Building on its differentiated product portfolio, aspirational brand positioning and wide channel reach, Havells performed well in the ECD categories and gained market shares. The year began positively with a strong summer season aiding the growth for cooling products, such as fans and air coolers.

In fan category, we clearly witnessed consumer preference for premium offerings with superior technology, features and aesthetics. The industry continued to see significantly faster growth in BLDC fans. During the year, Havells further expanded its range of fans with several new launches in the BLDC and Super premium BLDC+ range. With exclusive technologies like "Smart Sense AI" and "Direct Voice command", Havells delivered consumers comfort, convenience and well-being along with features like premium under-light and unique designs that add to the d?cor of the house. We also strengthened our channel presence across general trade and emerging channels, such as ecommerce. In addition to expanding Havells Galaxys exclusive stores network, we launched a new store format – Havells Fan Smart Hub with a focus on driving premiumisation in fans.

While the small domestic appliances industry continued to face challenges with lower consumer demand, Havells delivered a strong performance by focusing on strengthening of its core appliances portfolio and at the same time expanding into emerging categories. We have consistently launched new products, making inroads into high potential emerging categories, such as slow juicers, air fryers, garment steamers and air purifiers.

Driving product differentiation, Havells Nutrigrind Grinder, the worlds first dual stone grinder, provides the dual experience of dry as well as wet grinding. Use of natural stones helps retain the taste, texture and aroma of the grains.

During the year, we also entered into the large kitchen appliances segment, which comprises cooktops, hobs and chimneys. Our range of chimneys has been designed to offer a premium blend of aesthetics, durability, features and peace of mind for modern kitchens. Addressing a common pain point of air coolers off season storage, we introduced an innovative Convertible Air Cooler which can be transformed into a table and back to a full-fledged 80L desert air cooler, without the need for any screws and tools. Prioritising end-consumer experience and communicating the unique modularity of the product, we also offered customers a free first-time demo and installation for the convertible air cooler.

In line with our omni-channel strategy, Havells appliances further expanded into the quick commerce channel, meeting evolving consumer preferences. For the modern trade format, we are leveraging live demos and experiential selling to tap into the premium consumer set more effectively.

The electrical consumer durables (ECDs) division registered net revenues of 4,011 crores during FY 2024-25 with contribution margins at 23.8% compared with net revenues of 3,482 crores with contribution margins at 23.5% during FY 2023-24.

Lloyd

The Lloyd brand offers products in the Air Conditioners, Washing Machines, Refrigerators and Televisions categories. The brand continued its accelerated journey with robust growth during the year, supported by strong summer demand, improving channel acceptability and increasing brand strength.

Lloyd has been consistently investing in advertising to enhance brand visibility and image. The brand continued to focus on premium advertising, featuring eminent celebrities such as Deepika Padukone, Ranveer Singh, Sourav Ganguly, Mahesh Babu, Tamannaah Bhatia and Mohanlal. To strengthen communication in the South, especially in Tamil Nadu, we partnered with Vijay Sethupathi during the year.

As part of its efforts to drive premiumisation, Lloyd introduced a new designer range of air conditioners under the ‘Luxuria collection, including Stunnair, Stellar, and Stylus models. These products combine modern design with the latest technologies and have been developed entirely in-house, reflecting the growing capabilities within the organisation.

Over the years, Lloyds channel presence has continued to improve, with wider acceptance among trade partners. In a new initiative, Lloyd partnered with Blinkit to offer 10-minute delivery of air conditioners, tapping into the potential of quick commerce.

On the manufacturing front, the company commissioned new capacity for fully automatic top-load washing machines at its Ghiloth plant in Rajasthan. It also announced a planned investment of 480 crore to set up a refrigerator manufacturing facility, with a proposed capacity of 1.4 million units. The overall air conditioner capacity is also expanded from 2 million to 3 million units across both plants combined.

This year we saw benefits from the cost-efficiency initiatives, which contributed to significant improvement in both contribution margin and segment profitability. Going forward, Lloyd remains focused on consistent growth, improving profitability, and uplifting the brand positioning in the consumer durables space.

The Lloyd consumer division registered net revenues of

5,123 crores during FY 2024-25 with contribution margins at 13.5% compared with net revenues of 3,785 crores with contribution margins at 7.9% during FY 2023-24.

The launch of Novante IoT-enabled washing machines and Kolor refrigerators is also in line with the brands premiumisation approach. Lloyd aims to build on its progress in air conditioners and extend the same to other categories, with the broader goal of becoming a full-range consumer durables brand.

Opportunities

A. Presence in growing and under-penetrated product categories: Electricals and consumer durables categories continue to provide strong growth opportunities on the back of under-penetration, increasing urbanisation and higher personal disposable income.

B. Increasing electrification: Enhanced electricity availability in semi-urban and rural areas and stability of electricity in urban areas is translating into higher demand for electrical and consumer durable products across the country.

C. Infrastructure expansion: The governments continued thrust towards infrastructure building including highway construction, railway modernisation and airport additions is leading to a healthy demand for electrical goods such as power cables, professional lighting and industrial switchgears.

D. Favourable demographics: Indias population is among the youngest globally. With a median age of less than 29 years and 67% of the population in the working age group of 15-64 years, this young demographic is likely to be aspirational and seek better lifestyles.

E. Exports: With geopolitical challenges and supply chain disruptions in particular regions, India continues to emerge as a lucrative player for exports. The governments focus on domestic manufacturing with policies around Make in India and PLI, created India as a strong competitor to other Asian countries, unlocking export opportunities for the players.

F. Large product portfolio: Over the years, Havells has nurtured multiple categories in FMEG and consumer durables to position itself as a strong player to capitalise on opportunities across different segments. Equally, a bouquet of 6 consumer brands allows it to cater to multiple consumer segments across multiple price points.

G. Premiumisation: Over the years, the demand for smart IoT products has increased with a focus on connected tech and ease of use. Consumers are looking for technologically-advanced appliances which also elevate their home d?cor, thus improving the market for innovative and premium products.

H. Accelerated shift from unorganised to organised: Increasing formalisation and brand consciousness along with the emergence of unguided e-commerce journey of consumers, beneficial to the organised brands. Opportunity to move consumers from unorganised players to organised branded players.

Risk and Concerns

A. Economic slowdown: A reduction in GDP growth of the Indian economy, driven by global factors, may impede short-term growth prospects.

B. Commodity price fluctuations: Commodity price escalation could impact the cost of finished goods, potentially impacting affordability and consumer sentiment.

C. Competitive intensity: Heightened competitive dynamics, irrational market behaviour and any entry of disruptive players with access to low-cost capital, could lead to industry-wide value erosion.

D. Power disruptions: Any disruption in power distribution and electricity delivery may adversely affect the demand for electrical products.

E. Pandemic: Disruptions such as the Covid-19 pandemic pose significant risks to supply chains and demand dynamics, potentially disrupting business operations.

F. Geopolitical crisis: Increased volatility in commodity and foreign currency markets, stemming from geopolitical tensions in various global regions, may disrupt raw material availability and supply chains.

G. Global trade uncertainties: Any significant changes in the overall global trade environment can lead to volatility in commodity prices and/or impact the export opportunities

Also, kindly refer to the section Risk Management of this Integrated Report.

Awards and Accolades

Havells received the following awards during the FY 2024-25:

0 EPDA Award to Care Connect, Home Gaze, Text Genie and Voice Sync

0 German Design Award 2025 to DMMI Dual Mode Inverter, Lloyd Stylus AC, Nimbus Ceiling Light, Stealth Neo Ceiling Fan, Zen Kitchen Appliance Series

0 India Design Mark 2024 to Dekor Lamp, Elio Ceiling Fan, Instashift Changeover, Nimbus Ceiling Light, Nutrigrind Wet and Dry Grinder, Slide AC Remote, Stellar AC

0 Design Intelligence Award (DIA) to Luxus Ceiling Exhaust Series and QTRON MCCB

0 CII Design Excellence Award to Nutrigrind Wet and Dry Grinder

0 DNA Paris Design Award to Home Gaze

0 IF Award to NatureIN

0 Red Dot Concept Design Award to Venessa Ceiling Fan

Key Ratios
Ratio	As at 31 March 2025	As at 31 March, 2024	Change	Explanation for change in the ratio by more than 25% as compared to the previous year
(a) Current Ratio (times) = Current assets/	1.85	1.84	0.40%	Not Applicable
Current liabilities
(b) Debt-Equity Ratio (times) = Total Borrowings/ Shareholders equity*	0.00	0.00	-	Not Applicable (Nil Borrowing)
(c) Debt Service Coverage Ratio = Earnings available for debt service/ Debt service	19.29	19.18	0.57%	Not Applicable
(d) Return on Equity Ratio % = Net Profits after taxes/ Average shareholders equity	18.88%	18.12%	0.76%	Not Applicable
(e) Inventory turnover ratio (times) = Revenue
	5.86	5.21	12.50%	Not Applicable
from operations/ Average inventory
(f) Trade receivables turnover ratio (times) = Net revenue from operations/ Average trade receivables	18.01	17.40	3.49%	Not Applicable
(g) Trade payables turnover ratio (times) = Net purchases/ Average trade payables	6.39	5.57	14.72%	Not Applicable
(h) Net capital turnover ratio (times) = Revenue from operations/ Working capital	5.38	5.17	4.06%	Not Applicable
(i) Net profit ratio % = Net profit/ Revenue from operations	6.86%	6.87%	-0.01%	Not Applicable
(j) Return on capital employed % = EBIT/ Capital employed {refer note ii}	20.10%	19.33%	0.77%	Not Applicable
(k) Return on investment % = EBIT/ Average total assets	13.36%	12.79%	0.57%	Not Applicable

Notes:

(i) Debt service = Interest & Lease Payments + Principal Repayments

(ii) Capital Employed = Tangible Net Worth + Total Borrowings + Deferred Tax Liability (iii) Tangible Net worth is computed as Total Assets - Total Liabilities.

*Borrowings does not includes Lease liabilities

Human Resources

Kindly refer to the section Human Capital of this Integrated Report page no. 44

Internal Control Mechanism

Kindly refer to the section Risk Management of this Integrated Report page no. 20

Disclaimer Clause

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.