Polycab India flips a switch, powers ahead of Havells in decade-long race

Becomes leader in consumer electrical goods space, riding C&W growth and margin gains

Mumbai-based Polycab India Ltd has overtaken Havells India Ltd as the bellwether in the consumer electrical goods space, ending the latter’s decade-long leadership in the sector.

 

As on Monday, Polycab’s market capitalisation (mcap) stood at approximately ₹1.09 trillion, compared with nearly ₹1 trillion for Havells. Over the past 12 months, Polycab’s mcap has risen 12 per cent while Havells’ has declined 4.1 per cent. The cable and electrical goods maker has also surpassed its rival in both revenue and profit growth.

 

Polycab’s rise reflects superior operational execution and financial discipline in recent years. Its earnings growth has been driven by market share gains in its core cables and wires business as well as fast-moving electrical goods (FMEG) — a segment Havells long dominated. 

 

Havells has faced revenue and margin pressures across its switchgear, lighting, and electrical consumer goods divisions. Its aggressive expansion into home appliances — air conditioners, refrigerators, TVs, washing machines — via the Lloyd brand is yet to generate meaningful profit. 

 

Polycab grows faster  

 

Polycab’s net sales surged 22.4 per cent to ₹22,408 crore in FY25, compared with Havells’ ₹21,778 crore, up 17.1 per cent year-on-year. Net profit at Polycab jumped to ₹1,930 crore, outpacing Havells’ ₹1,483.4 crore. However, Havells’ net profit grew faster at 17.4 per cent compared to Polycab’s 12.4 per cent growth in FY25.

 

Over three years, Havells’ sales grew at a 16 per cent compound annual growth rate (CAGR), trailing Polycab’s 22.5 per cent CAGR from FY22 to FY25. The divergence is sharper in profitability: Havells’ net profit grew at a 7.42 per cent CAGR, from ₹1,196.8 crore in FY22 to ₹1,483.4 crore in FY25, while Polycab’s net profit more than doubled, registering a 29.3 per cent CAGR.

 

Analysts attribute Polycab’s strength to sustained growth in cables and wires (C&W), where it remains market leader by a significant margin. “Growth in C&W is led by higher government expenditure. Increase in manufacturing of electronics as well as backward integration also creates additional tailwinds for C&W business,” noted ICICI Securities.

 

Polycab has leveraged its C&W leadership to expand its FMEG portfolio. FMEG revenues doubled over five years, and the business returned to profitability in Q1FY26 after 10 quarters of losses at the PBIT (profit before interest and taxes) level.

 

Havells’ bet on Lloyd

 

Havells acquired Lloyd Electric & Engineering’s consumer durables business in 2017 for ₹1,600 crore and poured in another ₹2,900 crore over eight years, aiming to position Lloyd as a national player in home appliances. Lloyd’s revenues expanded at a 31.2 per cent CAGR in three years, from ₹2,273.2 crore in FY22 to ₹5,134 crore in FY25, making it Havells’ second-largest revenue contributor at 23.6 per cent of consolidated sales, behind cables and wires at 33 per cent. But profitability is elusive. The division has posted losses in four of the past eight years, slipping back into the red in Q1FY26 after reporting PBIT in FY25.

 

Havells’ margin challenge

 

The Lloyd division reported PBIT margins of just 2.3 per cent in FY25 — a quarter of Havells’ consolidated 9.7 per cent and a tenth of the switchgear division’s 22.5 per cent. The acquisition has sharply eroded Havells’ overall PBIT margin, which fell from 23.7 per cent in FY19 to 9.66 per cent in FY25 and 9.41 per cent in Q1FY26. Polycab’s PBIT margins steadily expanded from 10.7 per cent in FY19 to 12.3 per cent in FY25 and 12.97 per cent in Q1FY26.

 

Experts say Lloyd must improve price realisation to contribute meaningfully to margins, a difficult proposition in a highly competitive environment. “When Lloyd raises prices, customers switch to premium foreign brands, especially in air conditioners, where Daikin, Carrier, LG, Samsung, Mitsubishi, O General, Hitachi, and Panasonic are entrenched,” said an industry executive.

 

Weak consumer demand compounded the challenge. “Havells’ Q1FY26 performance was below estimates due to unfavourable weather and weak consumer demand. The company’s key business segments -- electrical consumer durables (ECD), Lloyd, and lighting -- reported revenue decline as well as margin contraction Y-o-Y in Q1FY26. In Lloyd, inventories remained high at both channel and company levels, and it will take some time to normalise,” Motilal Oswal analysts said after Q1 results. Consequently, the brokerage has cut Havells’ EPS estimates by 8 per cent for FY26 and 7 per cent for FY27, reflecting expected revenue and margin weakness across Lloyd, ECD, and lighting.

 

Polycab’s earnings upgrade

 

In contrast, Polycab saw earnings upgrades, driven by strong C&W growth and FMEG breakeven. “We raise our FY27E EPS by 4 per cent,” supported by robust domestic demand, capex-led growth, rising exports, and a healthy order book in the EPC segment, wrote Elara Capital analysts, following Polycab’s Q1FY26 results.

 

However, Polycab faces risks from new entrants: The Adani group and AV Birla group are planning to enter the wires and cables space, potentially triggering a price war in the core bread-and-butter C&W segment, which accounted for 85 per cent of Polycab’s revenues in FY25. The impact would be cushioned at Havells given its diversified portfolio.