Shares of Havells India Ltd rose on January 20, even though the company reported a slight decline in its net profit for the December quarter. The home appliances manufacturer’s profit slipped to ₹283 crore in Q3FY25, down from ₹288 crore in the same period last year.
A rise of up to 10.9 percent in operation-driven revenue to ₹4,883 crore was attributed to very healthy demand that has also started to normalize in switchgear, now constituting less than half its segment volumes. However, the total cost also went up by almost 12.3% to ₹ 4,564 crore, it impacted margins and also further inventory destocking in the wire business. Furthermore, some dent on profitability due to price deflation witnessed, mainly on the lighting segment business.
However, shares of Havells India traded 1.5% higher at ₹1,598 apiece at 1:35 PM on January 20. According to experts, its subsidiary, Lloyd’s stellar show, as losses narrowed during the quarter, could have seen positive sentiment attached to it.
However, its stock still looks overvalued with the company trading at 58 times FY26e earnings. After Havells’ Q3 miss, several brokerages revised target prices. Nomura for example cut the target price to ₹1,943 from ₹1,990 per share but upgraded the rating to ‘buy’ from ‘neutral’ saying that it expects recovery growth in the coming years.
Going ahead, Havells India should see an improvement in growth with full capacities in cables, stable demand for wires, and an increase in consumer preference for premium electric cables. Accordingly, analysts estimate growth, excluding Lloyd, to rebound to 17-18% over FY26 and FY27.
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Source: Moneycontrol
News Desk
