Havells India Shares Drop 5% As Demand Woes Spoil Mood

Shares of Havells India came under pressure on April 23, dropping as much as 5% even after the company reported strong earnings for the March quarter. Concerns over faltering demand for summer products like air conditioners weighed on investor sentiment, triggering the fall in the stock.

“While the overall demand scenario is soft (except in industrial cables), concerns are emerging on Residential Air Conditioner (RAC), particularly in secondary sales in the southern region (weak in March 25 and April),” brokerage firm Nuvama Institutional Equities wrote in a note.

The softness in RAC demand in the southern region was attributed to a delay in the summer season, which adversely impacted primary sales for air conditioners in Q1 FY26. In addition to that, consumer demand has also been dragged down by inflationary pressures in recent times.

Despite that though, not all hope is lost for Havells as Nuvama is of the view that recent government measures (such as tax savings and a favourable liquidity scenario) shall help revive demand for the company. The management reiterated similar sentiments. While Havells does acknowledge soft demand, it expects improvement going ahead while keeping its focus on driving growth with improved profitability.

Looking ahead, analysts at JM Financial expect growth for Havells to be led by its AC brand—Lloyd, with the company focusing on brand building, ramping up distribution and strong R&D efforts. JM Financial also expects a strong performance in the Wires and Cables segment led by robust demand momentum and opportunity opening up in exports.

As for Havells’ Q4 numbers, the company posted a 16.4% on year growth in its net profit to Rs 522 crore, up from the Rs 449 crore that it clocked in the corresponding quarter last fiscal. The company’s revenue for the quarter stood at Rs 6,532 crore, up 20.2% from Rs 5,434 crore in the same quarter last year.

Operating margins also remained largely unchanged as compared to the base quarter at 11.6%.

Brokerage firm Nomura also holds a positive outlook for Havell given its diversified business mix of and strong 26% EPS CAGR over FY25-27. “We expect Havells’ valuation premium to sustain (around the midpoint of its historical trading band of 40-60x). The stock’s current valuation also appears attractive given its outlook,” Nomura said. Nomura has rolled out a ‘buy’ call on the stock with a price target of Rs 1,873 to reflect a near 13% upside potential.