Eight years ago, Anil Rai Gupta had a dream—to get Havells, the company he heads, into every Indian household. That’s how the electrical-products maker acquired Lloyd, a consumer-durables brand. Today, that same brand has become Havells’ biggest headache.

In the September quarter, Havells’ top line grew a modest 5% to nearly Rs 4,800 crore from the year before. Thanks to Lloyd—which makes up about a quarter of Havells’ overall revenue—registering an 18% drop in its revenue. 

Besides, Lloyd’s warehouses are jammed with unsold air-conditioner units amid an unusually short summer. Now, with the new energy-efficiency rules expected to take effectEconomic TimesDon't just be cool, be better: BEE asks AC, fridge manufacturers to boost energy efficiency to match world standards in January, the pressure to clear them out would lead to higher costs.

The drag isn’t limited to the September quarter. In the past five years, Havells’ shares have risen at just over half the rate of the BSE Consumer Durables index.

That is not how this story began. For a few years after the acquisition, Lloyd delivered what Havells wanted: scale, brand recall, and a foothold in India’s fast-growing air-conditioning market. Revenues doubled to around Rs 22,000 crore in six years, helping the company inch closer to the consumer-electronics powerhouse that Gupta had imagined.

But that growth came at a steep cost.

Lloyd’s heavy discounting for consumers and love for distributors in the form of incentives, per multiple dealerships across Delhi, Uttar Pradesh, and Haryana, soon made it a capital-guzzling unit. Its operating margin—a measure of profitability—fell from over 17% to about -7% in just four years. That kept Havells’ overall profitability under pressure as well. Meanwhile, its peers in the AC business—the likes of Blue Star and Voltas from the Tata Group—grew sustainably while keeping their margins in check.

In a price-sensitive consumer-electronics market, Lloyd is India’s third-largest air-conditioner brand. Something it already was when Havells bought it.

Since then, the capital employed in the brand has been increasing and stands at over Rs 3,000 crore as of March 2025, more than in all other verticals combined. Yet, it has more or less ended up exactly where it started.