Why Did Havells India’s Q1 Net Profit Plunge 33% Sequentially?
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Synopsis
Havells India faces a significant downturn in its financial performance for Q1 FY26, reporting a drastic drop in profits and revenue due to adverse weather conditions affecting demand for cooling products. This article explores the reasons behind the decline and the company's future outlook in a challenging market.
Key Takeaways
- Net profit fell by 32.78% in Q1 FY26
- Revenue from operations declined 16.63%
- Year-on-year profit dropped 14.75%
- Wires and cables segment saw a 27.1% increase in revenue
- EBITDA margin decreased to 5.6%
Mumbai, July 21 (NationPress) Havells India announced a net profit of Rs 347.53 crore for the first quarter (Q1) of FY26, reflecting a significant drop of 32.78% quarter-on-quarter from Rs 517 crore in Q4 FY25.
Revenue from operations decreased by 16.63%, falling to Rs 5,455.35 crore from Rs 6,543.56 crore in the previous quarter, as per its filing with the stock exchange.
The total income for the quarter also declined, standing at Rs 5,524.53 crore, which is a 16.45% decrease from Rs 6,612.28 crore in Q4 FY25.
Year-on-year (YoY), the company reported a 14.75% decrease in consolidated profit after tax (PAT), down from Rs 407.51 crore in the April-June quarter of the previous fiscal.
Revenue from operations also saw a YoY decline of 6%, dropping from Rs 5,806.21 crore in Q1 FY25.
The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) decreased to Rs 570 crore, slightly below the Rs 576 crore recorded in the same quarter last year.
The EBITDA margin has reduced to 5.6%, compared to 9.9% a year earlier, according to its exchange filing.
Havells attributed this downturn to an unusually mild summer, which adversely affected demand for cooling products like fans and air coolers.
While industrial and infrastructure demand remained robust, consumer sentiment has weakened.
"This year’s tepid summer, unlike the strong season last year, led to a significant decrease in cooling products," noted the company in its exchange filing.
Among its segments, wires and cables showed strong performance, with revenue climbing 27.1% to Rs 1,933 crore from Rs 1,521 crore a year ago.
On the other hand, the lighting and fixtures segment struggled, declining 3.1% to Rs 374 crore.
The company also pointed out that the performance of its Lloyd brand was affected by unseasonal rains and a shorter summer, resulting in higher inventory levels and stagnant growth in the first half of the calendar year.
The results were announced after market hours, and prior to this announcement, Havells' stock closed 0.95% higher at Rs 1,533 on the National Stock Exchange (NSE).
Point of View
It is imperative to recognize the broader implications of Havells India's recent performance. Their substantial profit decline amidst a strong industrial backdrop highlights the shifting dynamics in consumer sentiment and seasonal demand. Understanding these challenges will be crucial for investors and stakeholders moving forward.
NationPress
05/09/2025
Frequently Asked Questions
What caused Havells India's profit decline?
The decline is primarily attributed to an unusually mild summer this year, which negatively impacted demand for cooling products such as fans and air coolers.
How did Havells perform in comparison to last year?
Year-on-year, Havells reported a 14.75% drop in consolidated profit after tax compared to the same quarter last year.
What segments performed well for Havells?
The wires and cables segment performed strongly, with a 27.1% increase in revenue compared to last year.
What was the market response to Havells' financial results?
Havells' stock closed 0.95% higher at Rs 1,533 on the National Stock Exchange (NSE) following the announcement of its results.
What are the future prospects for Havells?
While industrial demand remains strong, Havells needs to address consumer sentiment and inventory challenges to improve future performance.
