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Havells Q3 FY26 Analysis: Robust Revenue Growth Amidst Margin Headwinds

Lesson 199/323 | Study Time: 10 Min

Course: Quarterly Result Updates & Analysis

Havells Q3 FY26 Analysis: Robust Revenue Growth Amidst Margin Headwinds

Havells India continues to demonstrate its market leadership in the consumer electrical space, navigating a complex environment of commodity inflation and shifting seasonal demands. This analysis breaks down the Q3 FY26 results to see how the company is balancing its "mojo" between traditional electricals and the evolving Lloyd and Solar portfolios.

Section 1: Financial Growth Table (Q3 FY26)

The following data reflects the standalone performance for the quarter ended December 31, 2025.

Metrics	Q3 FY26 (Current)	Q3 FY25 (YoY)	YoY Growth %	Q2 FY26 (QoQ)	QoQ Growth %
Net Revenue	₹5,573 Cr	₹4,883 Cr	14.2%	₹4,767 Cr	16.9%
EBITDA	₹524 Cr	₹432 Cr	21.4%	₹442 Cr	18.5%
EBITDA Margin	9.4%	8.8%	+60 bps	9.3%	+10 bps
Profit After Tax (PAT)	₹301 Cr	₹283 Cr	6.6%	₹317 Cr	(5.0)%
EPS (Basic)	₹4.80	₹4.51	6.4%	₹5.06	(5.1)%
Volume Growth (C&W)	~20%+	-	High Double Digit	-	-

Note: PAT growth was impacted by a one-time exceptional item of ₹45.03 Cr related to New Labour Code provisions.

Section 2: Beat/Miss & Critical Concall Insights

Performance vs. Estimates

Revenue Beat: Revenue grew by 14% YoY, primarily led by an explosive 32.8% growth in the Cables & Wires segment.
Margin Resilience: Despite high copper prices, EBITDA margins expanded to 9.4% due to disciplined ad-spends and operating leverage.

Critical Concall Highlights

Cables & Wires Dominance: The segment saw volume growth exceeding 20%. Management noted that while channel stocking occurred due to rising copper prices, the underlying infrastructure demand remains robust.
Lloyd Normalization: Lloyd's revenue was muted (down 6.5% YoY) due to a weak summer and festive shifts, but channel inventory is finally "normalizing" ahead of the FY27 summer season.
The Solar Pivot: The "Others" segment grew 32.9% YoY, driven by Solar modules and inverters. The ₹600 Cr investment in Goldi Solar is a strategic move to secure module supply without heavy in-house manufacturing capex.

Section 3: Profitability, Valuation & Peer Comparison

Profitability Suite

ROE (TTM): 17.4%
ROCE (TTM): 23.3%
Debt-to-Equity: 0.00 (Virtually Debt-Free)

Valuation Perspective

At a CMP of ₹1285, Havells continues to trade at a premium compared to the industry average. However, with Debtor Days improving to 12 days (vs 16 YoY) and a healthy cash position of ₹1,873 Cr, the balance sheet remains fortress-like.

Section 4: H1 Trend vs. Q3 Recovery

Analyzing the trend is crucial for wealth building. Earlier in FY26 (H1), Havells faced stagnation with revenue growth near -1% and profit margins compressed to 6.5%.

Improving Trajectory: Q3 shows a significant reversal with 14.2% Revenue growth and 9.4% EBITDA margins.
Profit Trend: While PAT growth (6.6%) looks modest, adjusting for the ₹45 Cr exceptional item shows a much stronger underlying operational recovery.

Conclusion: Wealth-Building Strategy

Havells remains a "Core" portfolio candidate for investors focusing on the 4th Step of Wealth Building: Valuation and Quality. The company is successfully transitioning from a pure-play electrical firm to a diversified consumer durable and renewable energy player. While short-term margin pressures from copper inflation exist, their pricing power and distribution reach act as a significant moat.

Fair Value Analysis: Is Havells currently undervalued or overextended? I have updated the detailed PFI-based Fair Value:

Check Fair Value Here - https://docs.google.com/spreadsheets/d/e/2PACX-1vQpVV63Uy0-GYUEMgNcCnOxs8fS9Q_p4SAdAJz8_G0NAmQUKUEq2vR-HJDC2r2slRCNRHtfEeQ4ci32/pubhtml?gid=443034359&single=true

Disclosure: I am a SEBI Registered Investment Advisor (or Research Analyst). This analysis is for educational purposes only and does not constitute a direct buy/sell recommendation. Stock market investments are subject to market risks.

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Piyush Patel

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