Any current/future capex/capital investment/strategic investment?

Capex for the current year is INR 600 crores; next year's capex will be announced later (Page 10). Cable business capacity expansion planned at approximately 25% increase, including domestic wires (Page 15). New manufacturing facility in Sri City has recently come up, will take time to fill capacity (Page 13). Focus on investments in manufacturing, R&D, brand-building, IT infrastructure, digitization, and talent pool for sustainable growth (Pages 11, 17). Incorporated a subsidiary in the USA as an enabling provision to capitalize on strong macro tailwinds and future international strategies (P

Future growth expectations in sales/revenue/volumes?

Havells expects better consumer offtake and a positive second half for sales, supported by a better festive season and improved residential construction demand. The company is hopeful of double-digit growth in the second half, driven by normalized commodity prices and improved market conditions. Infrastructure and housing demand continue to support healthy growth in B2B categories like industrial switchgears, professional lighting, and power cables. Underground cables face capacity constraints, expected to ease with a new facility coming up next year, potentially boosting volume growth. The wi

Future growth expectations in earnings/operating earnings/profits/EPS?

Havells expects margin improvement led by commodity price normalization and product cost initiatives (Page 12, 17). Operating leverage benefits anticipated over next couple of years with double-digit revenue growth potentially improving margins by around 100 basis points (Page 11). Lloyd's margins expected to expand with growing sales, brand building, R&D, and plant maturity; margin expansion aided by new manufacturing facilities (Pages 6, 10). Positive outlook for second half with expected consumer demand recovery, especially in residential and festive seasons (Pages 9, 17). Volume growth exp

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Havells India LtdQ3 FY23Consumer Durables

Havells India Ltd Q3 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹1,178P/E: 44.0Market Cap: ₹75.9K CrSector: Consumer Durables

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Havells expects better consumer offtake and a positive second half for sales, supported by a better festive season and improved residential construction demand.
→The company is hopeful of double-digit growth in the second half, driven by normalized commodity prices and improved market conditions.
→Infrastructure and housing demand continue to support healthy growth in B2B categories like industrial switchgears, professional lighting, and power cables.
→Underground cables face capacity constraints, expected to ease with a new facility coming up next year, potentially boosting volume growth.
→The wires segment currently has normalized channel inventory, and growth depends on consumer demand pickup.
→Lloyd's business aims for increased sales and market share, with margin expansion expected as new plant capacities mature.
→Premium fan segment expected to recover after structural challenges; overall lighting volumes are growing but affected by value price erosion.
→The company anticipates continued investment and steady growth across categories but cautions some delayed recovery in certain segments.

Margin guidance

Category 3

→Havells expects margin improvement led by commodity price normalization and product cost initiatives (Page 12, 17).
→Operating leverage benefits anticipated over next couple of years with double-digit revenue growth potentially improving margins by around 100 basis points (Page 11).
→Lloyd's margins expected to expand with growing sales, brand building, R&D, and plant maturity; margin expansion aided by new manufacturing facilities (Pages 6, 10).
→Positive outlook for second half with expected consumer demand recovery, especially in residential and festive seasons (Pages 9, 17).
→Volume growth expected in lighting segment to translate to revenue growth despite price deflation bottoming out (Page 9).
→Overall, management believes in sustainable growth trajectory supported by investments in manufacturing, talent, and product portfolio (Pages 3, 11).

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Fundraise plans

- On Page 16 (Page 17 of 18 in the document), Rajiv Goel mentioned the incorporation of a subsidiary in the U.S.A. as an enabling provision connected to their international strategy, implying preparation for future actions but did not explicitly mention any fundraising through debt or equity. - There is no direct mention of any current or planned fundraising through debt or equity in the provided transcript on pages 1-19. - The company focuses on strategic growth investments, capacity expansions (notably in Lloyd), and sustaining operational leverage, financed presumably through internal accruals or existing resources. - Capex for the year is mentioned as INR 600 crores, with no immediate announcements on funding sources. In summary, Havells India Limited did not disclose any explicit new fundraising through debt or equity during this call.

Order book

The provided pages of the Havells India Limited report dated October 20, 2023, do not explicitly mention details about the current or expected order book or pending orders. The discussion mainly covers topics such as: - Growth outlook in various segments (B2C and B2B) - Capacity constraints especially in cables (40% of sales with constraints in underground cables) - Expansion plans including a ~25% capacity increase in cables - Performance and margin outlook in different business segments including Lloyd, switches, lighting, and ECD - Market competitiveness and pricing strategies - Export strategy and international business preparations No direct figures or commentary regarding the current or expected order book or pending orders are provided within these pages.

Capex plans

Yes

→Capex for the current year is INR 600 crores; next year's capex will be announced later (Page 10).
→Cable business capacity expansion planned at approximately 25% increase, including domestic wires (Page 15).
→New manufacturing facility in Sri City has recently come up, will take time to fill capacity (Page 13).
→Focus on investments in manufacturing, R&D, brand-building, IT infrastructure, digitization, and talent pool for sustainable growth (Pages 11, 17).
→Incorporated a subsidiary in the USA as an enabling provision to capitalize on strong macro tailwinds and future international strategies (Page 16).
→Plans to expand Lloyd's business capacity approximately to double existing revenue levels (Page 15).
→Continuous investment in product portfolio expansion, especially consumer durables like ACs, washing machines, refrigerators, and LEDs (Pages 10, 13).

How does Havells India Ltd rank vs peers in Consumer Durables?

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1Havells India Ltd

Rev 3Mar 3

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