Havells doubles ad spend to premiumise, margins feel the pinch
Revenue growth of 20% in Q1, but A&P expense doubling drags EBITDA. Renewables carved out as separate segment. H2 margin recovery expected as distribution reset ends.
— 5 earlier stories on Havells India Ltd. →What's new
- Havells doubles A&P spend to premiumise brand, pressuring EBITDA margins.
- Renewables carved out as separate segment, signaling strategic focus.
- Lloyd's distribution shifts from sell-in to sell-out, temporarily hitting primary volumes.
Why this matters
Havells is investing aggressively in brand building, accepting near-term margin compression. The Renewables carve-out signals a long-term pivot. H2 recovery hinges on distribution reset and commodity stability, but the strategy is clear.
What we're watching
- Whether A&P spend moderates and margins recover in H2.
- Lloyd's sell-out transition and impact on secondary sales.
- Capex execution for cables and R&D as guided.
The full read
Havells is spending its way to a premium brand. Revenue grew 20% in Q1, but EBITDA margins took a hit as A&P costs doubled. The company is carving out Renewables as a separate segment — a clear strategic signal. Meanwhile, Lloyd's distribution model shift from sell-in to sell-out temporarily compressed primary volumes. Management expects margins to recover in H2 as the reset wraps up and commodity volatility eases. Guidance? None specific. But the capex of ₹1,400 cr for cables and R&D shows conviction. The question is whether the ad splurge builds lasting pricing power or just burns cash.
Questions answered
- Why is Havells doubling its advertising and promotion spend?
- The company aims to premiumise its brand, positioning itself in higher-margin segments. This is a deliberate trade-off: near-term margin pressure for long-term pricing power.
- What is the Renewables segment carve-out?
- Havells has separated its Renewables business into a distinct reporting segment, highlighting its strategic importance. This may allow better tracking of investments and performance in the green energy push.
- How is Lloyd's distribution model changing?
- Lloyd shifted from a sell-in to a sell-out model, meaning it recognizes revenue only when products reach end consumers, not when shipped to distributors. This temporarily reduces primary volume visibility but aligns with actual demand.
- When does management expect margins to improve?
- Management expects margin improvement in the second half of FY27 as the distribution reset concludes and commodity volatility eases. No specific guidance was provided.
- Is Havells providing full-year guidance?
- Management declined to provide specific full-year guidance but expressed cautious optimism about a rebound in switchgear and stabilization in cables.
- What are Havells' capex plans?
- From prior guidance, Havells plans ₹1,400 crore in FY27 for cables capacity expansion and an R&D centre, indicating continued investment in growth.
Havells India Ltd.
Latest quarter · Jun 2026
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All notes on HAVELLS →- 17 Jul 2026 · 5:31 PM IST Havells doubles ad spend to premiumise, margins feel the pinch
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