Key Points

The report noted that the combined revenue of companies under coverage stood flat year-on-year at Rs. 273 billion. Within this, electrical firms performed better, posting a 4 per cent rise in sales to Rs. 166 billion, while durable firms witnessed an 8 per cent decline with sales dropping to Rs. 107 billion.

Among product categories, wires and cables registered strong double-digit growth driven by infrastructure demand and stocking by trade amid rising copper prices. Moderate growth was also seen in switchgears, water heaters and small appliances like mixer grinders and induction cooktops. Lighting, particularly in the B2B segment, sustained momentum, with LED price erosion showing signs of stabilization.

On the company front, Polycab emerged as the standout performer with 26 per cent revenue growth led by a 31 per cent rise in wires and cables and an 18 per cent jump in its FMEG segment. In contrast, companies more dependent on summer products struggled. Voltas' sales fell 20 per cent owing to a 25 per cent decline in unitary cooling products, while Crompton and Havells recorded revenue falls of 7 per cent and 6 per cent respectively. Havells' Lloyd brand suffered a steep 34 per cent decline.

Margins were another area of concern. Despite seven of ten companies improving gross margins thanks to cost-control measures and better product mix, EBITDA margins contracted for the overall coverage universe. The report highlighted that while electrical firms posted a modest 27 basis points rise in EBITDA margin to 10.6 per cent, durable firms saw a sharp 215 basis points decline to 6.1 per cent. Operating de-leverage and lower fixed cost absorption were key reasons behind this margin squeeze.

The research observed that Polycab again led in profitability, expanding its EBITDA margin by 210 basis points to 14.5 per cent. Whirlpool managed a marginal improvement, while most other players, including Voltas, Havells and Crompton, saw a contraction in margins ranging between 160 and 400 basis points.

- ANI