Havells India: Rise in Infra Spend to boost growth in LED and Cables

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Havells India has revealed that due to the rise in infrastructure spend, there has been an improvement in revenue growth in the 2HFY16 in comparison to 1HFY16. This is mainly in the cables segment. The company’s management is expecting a double-digit revenue growth in 2017 which will be aided by impressive growth in the cables and the LED segments. The margins however, will remain stable in the near term due to soft input costs.

The company’s management have shown that it is seeing green shoots of pickup in infrastructure spend that has led to improvement in volume growth in the cables business. Cable business contributes about 40 per cent of the revenue. Out of this, 50 per cent belongs to industrial cables. There have been a 30 per cent growth in cables with respect to volume during the last quarter. Going forth, 15 per cent volume growth is going to be seen in the cables segment, but with dip in prices there is going to be sub 15 per cent value growth in this segment.

LED is going to contribute to 75 per cent of lighting segment revenues by 2017. In this segment, the lighting category contributes to 30 per cent of standalone revenues. LED, had occupied 25 per cent of lighting segment sales in 2015 and right now, contributes to 50 per cent of the segment’s revenues.  Havell India expects that by next year, LED will contribute to 75 per cent of the lighting segment revenues via its participation in the EESL orders of the government for street lights. The company has already obtained orders for Rs 700 million which will be carried out during the next six months.

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