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Oct-Dec'25 Earnings Preview

Strong momentum in W&C while durables lags

W&C companies under our coverage continues to deliver a strong growth due to elevated realizations aided by volume growth. Exports are expected to decline in Q3FY26 due to weakness in the US markets. However, the FMEG segment struggled due to increasing components cost, though the festive demand provided some relief. RAC companies continues to face elevated inventory levels. We expect our consumer durables universe to register sales/EBITDA/PAT growth of 12.0%/12.5%/15.1% YoY in Q3FY26. Furthermore, we anticipate KEI, POLYCAB and RRKABLE to outperform, while LGEL to underperform in sales. In terms of profitability, RR Kabel is expected to outperform

We continue our positive view on W&C companies driven by enhanced realizations, domestic tailwinds, and favorable industry trends in both domestic and export markets while KEI and Polycab are our top picks.

* W&C momentum continues: W&C companies under our coverage are expected to sustain volume growth, supported by strong realizations. Cables are experiencing continued growth momentum, underpinned by strong industrial activity and infrastructure investments, while wires saw similar gains to that of cables (Cu up 15.4% & Al up 10.1% in Q3FY26). Cable are also benefiting from rising government and private capex in power and infrastructure projects. We estimate Havells/ Polycab /KEI/RR Kabel to see W&C revenue growth of 20.0%/33.9%/26.9%/31.0% YoY in Q3FY26.

* Festive led FMEG demand improvement: FMEG segment is expected to witness sequential improvement, aided by peak festive demand. Small and large appliances are likely to see better traction on festive-led consumer spending, while the fan segment may recover gradually as seasonality normalizes. We expect coverage companies to report 2.5% YoY growth in the FMEG segment.

* Another weak quarter for RAC segment: Coverage companies are expected to report 1.3% YoY growth in RAC segment during the quarter, impacted by accumulated channel inventory and sluggish secondary sales; however, inventory levels showed marginal sequential improvement while. RAC demand in the last 10 days of Dec’25 was strong, driven by a) anticipated price hike with raw material inflation and BEE norm implementation, and b) brand-led demand push. While expected demand uplift from GST-led buying did not materialize, resulting in sales remaining below expectations. Voltas UCP is expected to grow by 4% and Lloyd expect sales to decline by 5% YoY each with margins contraction.

* Revival into stationery segment: Cello World is expected to report 17% growth in its consumerware segment driven by ramp-up of glass facility and pick-up in stainless steel vacuum vessels while writing instruments and stationery segment is likely to see 40% YoY growth with re-entry into stationery segment under the “CELLO” brand.

* Key changes in ratings/TP: As we roll forward our TP to Mar’28E, we upward revise our TP for Polycab, RR Kabel and KEI. while maintaining our ratings for all the coverage companies.

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