Havells India Ltd Management Discussions

Overview and Outlook

FY 2025-26 continued to witness global trade volatility arising from the United States tariff actions and ongoing geopolitical conflicts. The year commenced with the announcement of reciprocal tariffs by the US on several countries, including India and concluded with the outbreak of conflict in West Asia.

Despite these uncertainties, Indias medium-term outlook remains positive, underpinned by domestic stability and recent reform initiatives. To boost domestic demand, the government took several measures such as income tax relief, GST rationalisation and easing of monetary policy. However, the rising commodity prices and weakening Indian rupee kept the inflation elevated, impacting the household disposable income during the year.

FY 2025-26 was a mixed year for the electrical equipment industry. While sales in certain consumer categories were impacted by a subdued summer, infrastructure- and industrial-led segments continued to demonstrate strong growth momentum. GST reduction along with a favourable festive season provided impetus to select categories during the year. In addition, sustained real estate activity in recent years has gradually translated into residential project completions, thereby supporting demand for building material products.

In this environment, Havells continued to operate as a diversified, innovation-led consumer appliances Company with a strong presence across residential, commercial, infrastructure and industrial segments. Backed by a strong portfolio, a wide distribution network, in-house manufacturing and sustained investments in R&D, the Company remains well positioned to address evolving market opportunities while focusing on long-term value creation.

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. The BCP segment navigated a challenging environment, characterised by input cost volatility and softer demand across retail and project segments. Despite these headwinds, Havells delivered a resilient performance driven by a focused portfolio premiumisation strategy, deeper channel engagement and strong brand salience. Rising demand from solar, pickup in EV charging infrastructure and increasing awareness around electrical safety continue to open up growth opportunities in this space.

A key highlight of the year was our continued emphasis on advancing safety-led innovations and driving adoption of differentiated products. We actively promoted advanced protection devices such as AFDD (Arc Fault Detection Devices), which address fire hazards caused by arc faults, and Type B RCCBs, designed to provide superior protection in applications involving EV charging infrastructure, solar installations and sensitive electronic loads.

In line with our premiumisation agenda, we also strengthened our distribution board portfolio with the introduction and scale-up of KANCH Glass Door Distribution Boards. This range was well received in the premium residential and commercial segments due to its superior aesthetics and build quality.

To cater to the growing demand for safe, intelligent and reliable Electric Vehicle (EV) chargers, Havells has forayed into the Electric Vehicle Supply Equipment (EVSE) space with the launch of its EV chargers. With established strengths in switchgear, protection devices, LV systems, RCDs, DBs, and cables - supported by strong manufacturing in Sahibabad - Havells entry into EV charging is backed by robust engineering capabilities. The Havells MotrON EV charger has been developed from the ground up for Indian operating conditions and engineered to withstand heat, dust, voltage fluctuations, and other environmental stresses. Indias EV charging market is poised for multi-fold expansion over the coming years, driven by millions of charger installations across residential, hospitality, commercial, fleet and public infrastructure. Each deployment is expected to create additional demand for cables, DBs, MCBs, and switchgear, thereby amplifying value creation across the Havells ecosystem.

Growth in the industrial switchgear market was driven by sustained investments from utilities and large industrial customers, who are increasingly prioritising lifecycle cost efficiency, system uptime, safety and regulatory compliance over upfront pricing. In line with the continued emphasis on the Make in India initiative and evolving customer expectations, Havells augmented its innovation-led industrial switchgear products portfolio with the launch of the QTRON and ATRON series of advanced MCCBs, QCO marked and compliant with the latest Indian regulatory standards, along with Instashift changeover systems (manual, motorised and automatic).

Havells also introduced the first phase of HI CONN fully type-tested assemblies up to 2500A ratings. It introduced the HI PAN type-tested compact power distribution system, which not only improves safety but also saves significant space within building structures.

Further expanding its power quality solutions portfolio, Havells launched rack-type Active Harmonic Filter (AHF) and Static VAR Generator (SVG) solutions to address critical power quality challenges by mitigating harmonics, enabling dynamic reactive power compensation, improving power facto and enhancing overall electrical efficiency and system reliability across industrial and commercial applications.

In switches, the year marked a phase of breakthrough innovation, an elevated design philosophy and deeper engagement with the luxury ecosystem for Havells. The launch of Apogee, our flagship Super Premium range, established new industry benchmarks in aesthetics and craftsmanship. The range was unveiled and showcased through exclusive architect forums across key cities. Crafted with fire-resistant materials and supported by mesh-based smart automation, Apogee brings together a compelling blend of luxury, safety, and intuitive living-reinforcing our presence in premium, and bespoke projects.

Building on this momentum, FY 2025-26 also marked a major milestone in our modular switches category, driven by the sustained growth of the Adiva and Fabio ranges and the introduction of their next evolution-flat switches. Defined by an ultra-sleek, minimalist profile, the Flat Switch series delivers a premium flush-mounted aesthetic while upholding the durability and reliability trusted by our channel partners.

Fabio Flat switches

The switchgear segment registered net revenues of H 2,585 crores during FY 2025-26, with contribution margins at 36.9%, compared with net revenues of H 2,395 crores with contribution margins at 37.9% during FY 2024-25.

Cable

This Strategic Business Unit (SBU) comprises power cables and flexible cables. The segment delivered a strong performance, supported by sustained infrastructure expansion, heightened private sector investment activity and the accelerating transition towards renewable energy solutions nationwide. Demand momentum was further supported by increased expenditure on logistics and industrial corridors, large-scale electrification initiatives, and the continued modernisation of power distribution infrastructure. Growth across data centres, railways, metro networks and IT sectors provided additional impetus to segment expansion. However, the year also witnessed pronounced volatility in key input commodities, particularly copper and aluminium, leading to pricing uncertainties across the market.

To address capacity constraints and position the business for sustained long-term growth, the Company undertook significant investments across its manufacturing facilities at Alwar and Tumakuru. These investments were directed towards capacity augmentation, plant modernisation, development of export-oriented capabilities and introduction of new product lines. In parallel, a comprehensive operational excellence programme was implemented across both plants, aimed at driving cost optimisation, improving operational efficiencies and establishing capital expenditure readiness for future scale.

Flexible Cables

The cables division registered net revenues of H 8,677 crores during FY 2025-26 with contribution margins at 16.9% compared with net revenues of H 7,184 crores with contribution margins at 14.1% during FY 2024-25.

To strengthen its competitive positioning, Havells has adopted a three-pronged strategic approach in the cable segment. On organisational readiness, leadership capabilities at key manufacturing locations were significantly strengthened to accelerate transformation and operational excellence initiatives. On technology readiness, focused investments were made to enhance digital and process capabilities across the value chain. On backward integration, deliberate steps were undertaken to deepen control over critical input materials and reduce supply chain dependencies.

The Company continued to expand its domestic market footprint and consolidate its market share, while maintaining a focused presence in international markets. The Company has strategically prioritised entry into high-value, technically advanced product segments. This includes Extra High Voltage (EHV) cables and other specialised cable categories that cater to large-scale power transmission infrastructure and renewable energy projects. Export performance, however, was impacted during the year due to uncertainties surrounding evolving tariff structures, particularly in the United States.

Power Cables

The flexible cables market is further transitioning towards organised players led by premium, safety-driven products and brands. Havells reinforced its positioning in the market through continued expansion into semi-urban and rural markets, supported by a multi-brand strategy.

Lighting

Havells Lighting business comprises two Business Units (BUs) - consumer lighting and professional lighting. FY 2025-26 continued to be another year with LED price deflation in the lighting industry. However, Havells maintained a strong focus on product innovation and customer orientation, demonstrating resilience in a challenging operating environment.

The Consumer Lighting business continued to reimagine products and align design and development with evolving consumer preferences and purchase pathways. We introduced surface ceiling lights under the Aurika Surface Ceiling Lights range, with a focus on performance, aesthetics and functionality. The portfolio includes variants that integrate a speaker with lighting to deliver a combined light-and-audio experience. Within the ceiling category, we extended the range through a broader portfolio of COB solutions to address multiple use cases. Reflecting increased demand for ambient outdoor lighting, we also launched outdoor wall lights and wall washers.

This year, we commenced in-house manufacturing of rope and strips, exercising stringent quality control to deliver best-in-class experience and availability to our consumers. Continuing our thematic collections under the Home Art Lights range, we expanded the product line and introduced Viraasat inspired by regional heritage art forms of India. Glamtubes range was extended with the introduction of aesthetically appealing linear lights - Orion and Neutron, offering a fine blend of task and ambient light in a single form factor.

Havells Home Art Light stores serve as a destination format for lighting solutions across price points and design preferences. We operated 55 Havells Home Art Light brand stores, with experiential zones that enable customers to view and compare lighting applications. To increase availability in Tier 2 and Tier 3 towns, we progressed the Shop-in-Shop (SIS) model with A-class channel partners. Architects, consultants, designers and influencers contribute to specification-led demand and brand visibility in the lighting category. During the year, we partnered with relevant industry bodies to strengthen structured engagement with these stakeholders.

On the professional lighting front, the focus remains on building capabilities and enhancing the overall customer experience. By adopting a segmented customer approach, Havells has successfully deepened engagement with end customers, allowing better understanding of their needs.

One of the significant milestones this year was the introduction of our high-performance Luminaires. These new offerings provide 30%+ higher energy efficiency compared to the standard solutions, underscoring our commitment to sustainable and cost-effective innovations. Furthermore, we launched a unique Highbay lighting solution tailored specifically for the food & tyre

The Lighting division registered net revenues of H 1,655 crores during FY 2025-26 with contribution margins at 32.3% compared with net revenues of H 1,653 crores with contribution margins at 32.6% during FY 2024-25.

industry. This product not only delivers reliable performance under challenging phosphorous-rich environments but also helps customers achieve energy savings.

Architectural façade lighting is quickly gaining momentum across India as customers see the value in highlighting prominent buildings, monuments, and heritage sites. Havells has built significant in-house expertise in this segment, offering everything from lighting design, integrating with sound and music and simulations to specialty optics and customised product manufacturing.

Our expertise has been leveraged across a variety of public and infrastructure sectors. With NHAI, we illuminated 30+ expressways across India, including Jaipur-Delhi, Lucknow-Ayodhya and Azhiyur-Vengalam. We illuminated over 10 railway stations across the country, including Nagpur and Patliputra Junctions. For sports lighting, we have launched high-performance floodlights ranging from 1000-1200W with televised and DMX control, offering a better experience in-ground and for digital viewing.

Electrical Consumer Durables (ECDs)

This SBU comprises fans, small domestic appliances and water heaters. During the year, the industry experienced muted growth, largely due to a weak summer, particularly impacting the non-ceiling fan categories (table, pedestal and wall). However, Havells BLDC+ portfolio delivered healthy growth, supported by the launch of new products across mid and premium segments. The Company also expanded its presence across general trade and emerging channels, including e-commerce and modern format retail. The rollout of Exclusive Fan Hubs across India, featuring a premium product assortment, further strengthened Havells premium positioning in the category. Investments in new products and technology continued during the year, with a focus on enhancing performance, design and energy efficiency across the fan portfolio.

In appliances, core categories such as mixer grinders, juicer mixer grinders and dry irons experienced muted growth across channels, while emerging categories, including healthy fryers, garment steamers and air purifiers, exhibited relatively faster growth. The year also saw changes in BIS regulations, which led to supply chain disruptions and impacted availability in certain categories. Despite these challenges, Havells grew ahead of the market in emerging categories and gained market share in the core food preparation segment. The Company also transitioned a significant portion of its appliance portfolio to domestic manufacturing under the Make in India initiative. A continued focus on premiumisation, supported by planned capital investments and portfolio expansion in emerging categories, is expected to support long-term growth in the appliances business.

Leveraging its in-house R&D capabilities, Havells introduced the CRAFT Series. It is Indias first kitchen appliance range built around a unified design language, combining form and function to elevate modern kitchens. It comes with digital touch controls across the range, BLDC motor technology, single-touch auto mode, keep-warm functionality extending up to 12 hrs, intelligent toaster with 25% faster toasting, etc.

The electrical consumer durables (ECDs) division registered net revenues of H 3,874 crores during FY 2025-26 with contribution margins at 23.0% compared with net revenues of H 4,011 crores with contribution margins at 23.8% during FY 2024-25.

Others

The others segment comprises motors, solar, solar pumps, pumps, water purifiers and personal grooming. The segment recorded strong growth during the year, primarily driven by the significant traction in the solar business. Havells accelerated its rooftop solar installations, focusing on residential, commercial and industrial (C&I) demand. The governments PM Suryaghar Yojana, with a target of one crore installations by March 2027, continued to act as a demand driver for rooftop solar adoption across the country.

During the year, Havells invested H 600 crores in Goldi, acquiring an 8.74% stake. The partnership with Goldi has strengthened supply chain visibility by ensuring a stable and competitive supply of solar panels and modules for rooftop installations. Goldi Solar also plans to enter into cell manufacturing, thereby providing Havells access to cells and panels manufactured in India.

The water purifier business also achieved strong growth, supported by new product launches and a gain in market share. However, the personal grooming business faced challenges in demand at the industry level. The implementation of new BIS norms led to a scale -up of the Make in India supply chain for the category.

The others division registered net revenues of H 1,727 crores during FY 2025-26 with contribution margins at 16.2% compared with net revenues of H 1,379 crores with contribution margins at 17.0% during FY 2024-25.

Lloyd

The Lloyd brand offers products across categories such as Air Conditioners, Washing Machines, Refrigerators and Televisions. During FY 2025-26, Lloyd revenues declined as the business navigated a weak summer, which significantly impacted the demand for air conditioners. Lower revenues resulted in significant under-absorption of fixed costs, thereby affecting profitability.

However, Lloyd continued to progress on its journey towards becoming a comprehensive home-appliances brand for Indian households. While strengthening its position in air conditioners, the brand is also expanding its presence across washing machines, refrigerators and televisions. Anchored in the belief that in-house manufacturing is critical to differentiation and premiumisation, Lloyd has been investing in building manufacturing capabilities across its key product segments. Over the years, Lloyd has commissioned manufacturing facilities for air conditioners, semi-automatic washing machines and fully automatic top-load washing machines.

During FY 2025-26, Lloyd advanced manufacturing initiatives in other product categories as well. In March 2026, Lloyd commissioned its refrigerator plant at Ghiloth, Rajasthan, with the capability to produce direct cool and frost-free refrigerators. Lloyd also announced the setting up of manufacturing for fully automatic front-load washing machines. The proposed capacity is expected to be operational by December 2026. These investments are expected to significantly strengthen Lloyds position in these categories. The expansion is supported

Alongside product and manufacturing expansion, Lloyd continues to remain focused on its channel expansion journey by strengthening its retail touchpoint network in general trade and improving the counter share across modern format chains. With a large base of In-Store Demonstrators (ISD) already deployed, Lloyd is now focused on enhancing salesforce productivity through targeted upskilling and expanding non-air-conditioner categories to reduce dependence on seasonality.

Lloyd continues to invest in advertising to enhance brand visibility and customer pull. The brand leverages a mix of national and regional brand ambassadors such as Deepika Padukone, Ranveer Singh, Sourav Ganguly and Vijay Sethupathi.

by in-house research and development capabilities focused on product innovation and driving premiumisation.

Leveraging its R&D efforts, Lloyd unveiled its new refrigerator range, addressing key customer expectations and buying factors. The range includes the Icecool series, Refriplus - a refrigerator with a warm zone, the icool sense frost-free range, a bottom-mount refrigerator and a multi-door refrigerator.

______ Opportunities @

A. Market Opportunity: Under penetration in electricals and consumer durables, along with increasing urbanisation, continues to present strong growth opportunities. The Company can capitalise on the growing demand for cutting-edge, innovative and premium appliances that enhance home aesthetics.

B. Favourable Demographics: Indias large working population and young, aspirational demographic are expected to create sustained growth opportunities, supporting long-term demand for the Companys offerings.

C. Infrastructure Development: Sustained government focus on infrastructure development has created a strong demand environment for electrical goods. Categories such as power cables, professional lighting and industrial switchgear are well-positioned to benefit.

D. Electricity Accessibility: Improved access to electricity across semi-urban and rural regions is augmenting the demand for electrical and consumer durable products nationwide, supporting broader market expansion for the Company.

E. Digital Expansion: The expansion of digital platforms and omnichannel presence is enhancing the Companys reach and visibility, thereby supporting sustained revenue growth.

F. Exports: With continued emphasis on Make in India and PLI schemes, India has emerged as a strong manufacturing hub for the world, unlocking export opportunities for industry participants.

G. Premiumisation: Demand for smart and connected products continues to grow, driven by increasing adoption of IoT-enabled technologies and a preference for ease of use. Consumers are increasingly seeking technologically advanced appliances that also enhance home aesthetics, supporting demand for innovative and premium offerings.

------- Risk and Concerns r

Indias economic growth, influenced by global developments, may impact near-term demand conditions and growth momentum.

B. Supply Chain Disruptions: Volatility in global markets may exert pressure on supply chains and lead to cost fluctuations, potentially impacting the Companys operations.

C. Commodity Price Fluctuations: Dependence on commodity inputs exposes the Company to price fluctuations, which may affect cost structures and final pricing, potentially impacting affordability and consumer sentiment.

D. Competitive Intensity: Elevated competitive intensity, including aggressive pricing, irrational market behaviour or the entry of players with access to low-cost capital, may exert pressure on industry profitability and value creation.

E. Power Disruptions: Disruptions in power generation or electricity distribution could adversely affect demand for electrical products and related categories.

F. Pandemic: Large-scale health disruptions, such as pandemics, may impact supply chains, workforce availability and demand conditions, potentially affecting business operations.

G. Global Trade Uncertainties: Changes in global trade policies or disruptions in international trade flows may result in commodity price volatility and affect export opportunities.

Awards and Accolades

Havells received the following awards during the FY 2025-26:

Q Acetech Awards 2025

Q Havells was recognised among Indias Best Managed

Companies 2025 by Deloitte

Q German Design Awards 2026 to Neutron Plus Glamtube,

Lloyd Masterpiece Window AC, Breathe Air Purifier, Pebble Fan Remote, Hearth OFR, Sere Hair Dryer, Lloyd Stunnair AC

Q India Design Mark 2025 to Lloyd Stunnair AC, Lloyd

Masterpiece Window AC, Meditate 250 Air Purifier, EV charger, convertible air cooler, Adiva switches

Q CII Design Excellence Awards 2025 to EC charger and commodito room heater

Q LIT Awards 2025 to Luxtile, Rangmanch - Viraasat lighting and Orion Plus Glamtube

Q Good Design Awards 2025, Japan to Lloyd Slide AC

Remote, Nimbus Panel Light, Stellar Split Air-Conditioner, Havells Instashift changeover Switch

Key Ratios

Ratio	As at 31 March 2026	As at 31 March, 2025	Change	Explanation for change in the ratio by more than 25% as compared to the previous year
(a) Curr ent Ratio (times) = Current assets/ Current liabilities	1.70	1.85	-7.99%	Not Applicable
(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	17.59	19.29	-8.85%	Not Applicable
(d) Return on Equity Ratio % = Net Profits after taxes/ Average shareholders equity	19.15%	18.88%	0.27%	Not Applicable
(e) Inventory turnover ratio (times) = Revenue from operations/ Average inventory	5.34	5.86	-8.87%	Not Applicable
(f) Trade receivables turnover ratio (times) = Revenue from operations/ Average trade receivables	22.04	18.01	22.37%	Not Applicable
(g) Trade payables turnover ratio (times) = Net purchases/ Average trade payables	6.27	6.39	-1.86%	Not Applicable
(h) Net capital turnover ratio (times) = Revenue from operations/ Working capital	7.02	5.38	30.46%	Improvement on a/c of decrease in current assets (Cash & Bank balance)
(i) Net profit ratio % = Net profit/Revenue from operations	7.60%	6.86%	0.74%	Not Applicable
(j) Return on capital employed % = EBIT/ Capital employed (refer note ii)	17.55%	20.10%	-2.55%	Not Applicable
(k) Return on investment % = EBIT/ Average total assets	12.20%	13.36%	-1.16%	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. 56

Internal Control Mechanism

Kindly refer to the section Risk Management of this Integrated Report page no. 24

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.