Havells India Chairman and Managing Director Anil Rai Gupta said the ongoing West Asia crisis has weighed on the company's switchgear exports to the Middle East and Africa, even as domestic demand has helped offset some of the pressure.
In an interview to NDTV Profit, when asked about the impact of the crisis on the switchgear business, Gupta said, "If you look at our switchgear business, some part of that comes from exports to the Middle East and Africa. Out of our total exports, which is still a small number, it's a reasonable part of the switchgear business."
"Hence, the lower growth or degrowth in the exports to the Middle East and Africa did impact the overall growth for the switchgear business."
ALSO READ | L&T Bags Orders Worth Rs 10,000-15,000 Crore In Metals And Mining Segment — Check Details
He added that the outlook remained uncertain going forward, "How the West Asia crisis pans out is difficult to say. Which means the exports can be under pressure in the coming quarters. But I think we are quite enthused by the domestic demand."
On margins, Gupta said Havells' contribution margins had stayed stable despite raw material volatility, with the company opting for calibrated price hikes rather than steep one-time increases.
He attributed the pressure on overall margins to higher advertising and promotion spending during the quarter, following a subdued comparison base last year.
"We do believe that it's an exercise... we see a big jump this year because last year the season for summer products was very bad," he said, adding that A&P spends should normalise over the full year.
On input costs, Gupta said price hikes varied by category, with cables and wires seeing the steepest increases of 7-8% given the segment's commoditised nature.
ALSO READ | India, Spain Advance Talks On UPI-Bizum Payment Interoperability
"By the end of the first quarter, we do believe that we have been able to pass on the entire cost increase," he said, adding that no further price hikes would be needed if raw material prices held steady.
On Lloyd, the company's room air conditioner brand, Gupta acknowledged excess inventory built up earlier in the year but said it had since been cleared, with regulatory changes in energy ratings and market volatility both weighing on performance in the first half.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
