Overview & Outlook
With GDP growth of 7.5% in FY24, India continues to be among the fastest-growing
countries globally. Amidst global economic uncertainties, India showcased resilience and
continued its growth trajectory. The growth was buoyed by policy initiatives aimed at
strengthening the financial sector alongside focus on development of physical and digital
infrastructure. Embracing the vision of ‘Atmanirbhar Bharat, India emphasised
indigenous manufacturing, supported by schemes like the Production Linked Incentive (PLI).
With governments enhanced focus on infrastructure and manufacturing, the electricals
industry also witnessed strong demand for categories like industrial switchgears,
professional lighting and power cables.
The year witnessed heightened activity in the residential real estate market. The
demand for electrical goods is yet to fully benefit from these real estate projects. As
construction on these projects progresses, the industry is expected to see demand pick up,
starting with switchgears and flexible cables, followed by lighting and consumer durables.
Despite healthy GDP growth, consumer demand was weak largely due to persistent high
inflation. At an overall level, a higher impact was observed on the affordable and rural
segments as compared to premium and urban segments. Consequently, the B2C electrical
category experienced subdued growth during FY24. However, the medium-to-long term
consumption potential in India remains intact.
Favourable demographics, rising urbanisation and electrification, premiumisation and
under-penetration remain key macro drivers for sustainable growth in the electricals and
consumer durables categories. Brand power and aspirational shift towards the organised
players are key themes which continue to play out in the market. Havells is
well-positioned to capitalise on these opportunities, leveraging its diverse portfolio of
innovative products.
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.
In the switches and automation category, Havells focus remains on customer-centric
solutions, with automation solutions leading the way. With the launch of new innovative
products like i-Sense, we aim to make home automation solutions more accessible and
affordable to a larger customer base.
These solutions are also relevant for home renovation projects, enabling more users to
prospectively upgrade their manual switches to automation solutions easily.
In the premium segment, we further enriched our Signia Smart range by introducing Grey
Finish, enabling a seamless blend with home decor and in turn elevating interior ambience.
In the switches category, we made significant strides by launching two new ranges -
Adiva and Magnus. The Adiva switches set new standards in terms of operational feel and
sound within its category. The new Magnus range ensures easier compatibility with existing
switches in customers homes, allowing a seamless upgrade to the Magnus range.
With these new offerings, we aim to drive stronger growth in the mid-market segment,
while maintaining our focus on the premium segment.
In residential switchgear, alongside a growing existing portfolio, the introduction of
new products remains a key focus area. Recognising the emerging need to protect against
electrical fires resulting from overloaded old infrastructure and the risk of
electrocution, during the year, Havells launched its range of AFDD (Arc Fault Detection
Devices).
The Switchgear segment registered net revenues of 2,245 crores during FY24 with
contribution margins at 40.2% compared with net revenues of 2,120 crores with
contribution margins at 38.4% during FY23.
Cable
The Strategic Business Unit (SBU) comprises power cables and flexible cables. The
category witnessed growth on the back of rapidly-growing investment by the government
towards the development of infrastructural projects as well as private manufacturing
capex.
The robust demand in the residential real estate sector, coupled with key government
initiatives like Housing for All, Pradhan
Lighting
Havells Lighting business comprises two business units (BUs) - consumer lighting and
professional lighting. In FY24, while the lighting industry faced challenges in form of
significant price erosion in LEDs, Havells continued its focus on customer centricity and
product innovation to strengthen its market position even further and remain resilient.
The professional Lighting business registered strong overall growth and established
Havells as a brand of choice for varied customers that includes leading Industries,
renowned modern workspaces and diverse Government segments including the Railways, NHAI,
MES, Smart Cities, many more. With a strong customer segment strategy, Havells
successfully executed projects in areas of Public & Infrastructure, Industry and
Office Lighting. During the year, Havells delivered its lighting solutions to several
prestigious projects such as Shri Ram Mandir, Ayodhya and Central Vista projects. Havells
became a premier
Mantri Awas Yojana and PM Gati Shakti National Master Plan, Multimodal Logistics Parks
are expected to be significant drivers for the growth of the cables segment. Furthermore,
the growing deployment of renewable energy sources such as solar, wind, and hydropower,
aimed at addressing climate change and enhancing energy security, represents a crucial
trend in the Indian power cables and flexible cables market.
While the demand for power cables continues to be on the rise, Havells growth was
limited given the capacity constraints during the year. Addressing that, the Company is
working towards a greenfield expansion of its power cables capacity in Tumkur, Karnataka
and expects the commissioning in early FY25.
In flexible cables, during the year, the Companys focus was on going deeper with an
enhanced presence in semi-urban and rural markets and expanding existing channels.
Multibrand strategy with Havells, Standard and REO was leveraged to play in different
customer segments and establish a clear product ladder.
The cables division registered net revenues of 6,318 crores during FY24 with
contribution margins at 15.0% compared with net revenues of 5,533 crores with
contribution margins at 12.9% during FY23.
Harnessing the power of the Sun, we launched SunLit Series - Our consumer solar range,
blending the finest form factors with high-performance chips. With the emerging Ceiling
category, we also reimagined and launched an extension to our bezel glow Nimbus range with
‘L & I shaped panels. Lastly, focussing on consumer journeys, we redesigned our
Smart Range products to meet the evolving needs of our consumers.
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.
The Lighting division registered net revenues of 1,627 crores during FY24 with
contribution margins at 30.1 % compared with net revenues of 1,602 crores with
contribution margins at 29.8% during FY23.
Electrical consumer durables (ECDs)
This SBU comprises fans, small domestic appliances and water heaters. Beginning of
FY24, the industry faced headwinds due to unseasonal rains disrupting summer season
consumer offtake leading to higher channel inventories which were built up during the BEE
transition. Amidst lower consumer demand, the fan industry witnessed heightened
competition. However, by the second half of the year, we witness offshoots of growth with
summer picking up.
At Havells, with our philosophy of premiumisation in all segments, we focussed on the
continued enhancement of our BLDC and Super premium BLDC+ range. BLDC+ offers BLDC
technology but in addition to this, it provides superior aesthetics and features to
consumers with design and technology at its core. With exclusive technologies like
"Smart Sense AI" and "Direct Voice command", Havells provides tech
which enhances the consumers comfort, convenience and well-being and features like
premium under-light and unique designs add to the decor of the house. With the enhancement
of the BLDC range to almost 40 models, Havells has the largest range of BLDC fans with
differentiated offerings and has consistently increased BLDC share to 20%+. Our new
advertising campaign also focusses on communicating these features to our consumers.
Amidst lower consumer demand, small domestic appliances witnessed muted performance
during the year. However, premium offerings and emerging channels such as modern format
retail, e-commerce and quick commerce did relatively well. As consumer preferences
gravitate towards premium products, ensuring an optimal consumer experience remains key.
Factors such as store ambience, product displays, ease of installation and after-sales
support are gaining importance in todays consumer landscape. Consumers are increasingly
seeking products from trusted brands that offer innovative features and a compelling blend
of affordability and premium proposition.
Havells further reinforced its market position by introducing consumer-centric
appliances featuring the latest technologies and innovative features. The year marked the
launch of several ground-breaking products, including Indias first 6000V surge protection
in the new Evo Cook Induction range, the 2 kg heavy-weight dry iron Blaze and the Foodo
(MG + Food Processor), etc.
During the year, entry into Kitchen Appliances such as Cooktops, Hobs, Chimneys and
other built-in appliances was announced. The foray is expected to leverage business
synergies with the existing range of small domestic appliances.
The electrical consumer durables (ECDs) division registered net revenues of 3,482
crores during FY24 with contribution margins at 23.5% compared with net revenues of
3,296 crores with contribution margins at 23.3% during FY23.
Lloyd
Lloyd continues to strengthen its position as a consumer durable player offering a
range of products - Air Conditioners, Washing Machines, Refrigerators and Televisions.
While maintaining healthy revenue growth, Lloyd expanded its margins during the year.
Since the acquisition, Lloyd has worked towards premiumisation through in-house
manufacturing, an innovative product portfolio, accelerated brand investments and foray
into modern format retail. We have set up manufacturing facilities for air conditioners
and washing machines. Backed by strong R&D, Lloyd has expanded its portfolio with the
introduction of unique feature and design-led products such as Indoor Air Quality (IAQ)
and Intelli-Logic Air Conditioners. We began the 2024 summer season with the launch of the
industry-first designer Lloyd Stellar & Stylus air conditioner range, along with Rapid
Cool Technology refrigerators and the latest Novante Fully Automatic Washing Machines.
Lloyds designer air conditioner range not only complements the interior decor but also
delivers a top- notch cooling performance with unique features such as mood lighting,
direct voice command, an in-built air purifier and door open alert.
Brand investments remained a key tool for establishing premium brand imagery. Supported
by a robust product portfolio, the brand investments consistently yield positive outcomes
in terms of brand recall and consideration. Lloyd leverages its strong association with
celebrities such as Deepika Padukone, Ranveer Singh, Sourav Ganguly, Mahesh Babu,
Tamannaah Bhatia and Mohanlal, enabling a balanced mix for national and regional
communication.
Lloyd increased its penetration in general trade and expanded into emerging channels
such as organised retail and e-commerce. In organised retail, the emphasis was on
expanding the counter share through investments in in-store demonstrators (ISDs). We also
added the Sales & Service Dealership (SSD) channel through the establishment of
‘Lloyd Gallery exclusive stores across India.
Lloyd progressed on its journey to be a profitable full-stack consumer durable player
over the coming years. We continue to be excited about the opportunity Lloyd unlocks in a
largely under-penetrated consumer durables industry and the space it has created for
itself in the market.
The Lloyd consumer division registered net revenues of 3,785 crores during FY24 with
contribution margins at 7.9% compared with net revenues of 3,369 crores with
contribution margins at 4.4% during FY23.
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 is a key demographic dividend for India.
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 decor, 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 Threats
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.
Also, kindly refer to the section Risk Management of this Integrated Report.
Awards and Accolades
Havells received the following awards during the Financial Year ended 31st March, 2024:
• Best Annual Report in the Electrical Equipment category at Indias Best Annual
Report Awards 2023, organised by The Free Press Journal along with its knowledge partner
CareEdge
• Red Dot Brand & Communication 2023 Award for Meditate (Air Purifier)
• Good Design Award (Japan) 2023 to Elante Washing Machine, Bianca Water Heater
and Zella Immersion Rod
• IF Award 2023 to Meditate (Air Purifier) UX
• CII Design Excellence Award 2023 for Otto Storage Water Heater
• German Design Award 2023 for Meditate, Amaya Fan, Qtron MCCB and Essence Wet
& Dry Grinder
• German Design Award 2024 for Nutrigrind Wet & Dry Grinder
• CII Industrial Innovation Award 2023 for Centre for Research & Innovation
• Golden Peacock Award 2023 - Innovative Product - Meditate
• Mice Affairs - Corporate Excellence Award (2022-23)
• MTM Star Award 2023 - Best Incentive Programme for Distributors/Dealers
• MILT Excellence Awards 2023
• Acetech Grand Stand Award, Platinum Winner - Oct 23
• Acetech Grand Stand Award, Silver Winner - Nov 23
• Acetech Grand Stand Award, Platinum Winner - Dec 23
• Acetech Design Conclave Award, Bronze Winner - Dec 23
Key Ratios
| Ratio |
As at 31 March 2024 |
As at 31 March 2023 |
Change |
Explanation for change in the ratio by more than 25% as compared to the previous
year |
| (a) Current Ratio (times) = Current assets/ Current liabilities |
1.84 |
1.84 |
0.03% |
Not Applicable |
| (b) Debt-Equity Ratio (times) = Total Borrowings/ Shareholders equity* |
0.00 |
0.00 |
- |
Not Applicable |
| (c) Debt Service Coverage Ratio = Earnings available for debt service/ Debt service |
19.18 |
3.00 |
540.05% |
Full debt repaid in previous year |
| (d) Return on Equity Ratio % = Net Profits after taxes/ Average shareholders equity |
18.12% |
17.06% |
1.06% |
Not Applicable |
| (e) Inventory turnover ratio (times) = Revenue from operations/ Average inventory |
5.21 |
5.05 |
3.15% |
Not Applicable |
| (f) Trade receivables turnover ratio (times) = Net revenue from operations/ Average
trade receivables |
17.40 |
19.37 |
-10.17% |
Not Applicable |
| (g) Trade payables turnover ratio (times) = Net purchases/ Average trade payables |
5.57 |
5.82 |
-4.35% |
Not Applicable |
| (h) Net capital turnover ratio (times) = Revenue from operations/ Working capital |
5.17 |
5.25 |
-1.58% |
Not Applicable |
| (i) Net profit ratio % = Net profit/ Revenue from operations |
6.87% |
6.38% |
0.49% |
Not Applicable |
| (j) Return on capital employed % = EBIT/ Capital employed {refer note ii} |
19.33% |
18.73% |
0.59% |
Not Applicable |
| (k) Return on investment % = EBIT/ Average total assets |
12.79% |
12.07% |
0.72% |
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. 46
Internal Control Mechanism
Kindly refer to the section Risk Management of this Integrated Report page no. 22
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.
+91-9892691696
