Havells Q3 Results Review: Brokerages Slash Target Price On Revenue Miss

Havells India Ltd. saw its target price slashed by Motilal Oswal Financial Services Ltd., Nomura, and Nuvama, as it missed earning estimates for the third quarter.

Havells India missed both the revenue and margin estimates by Nomura. The FMEG company missed the estimated higher share of project business and plant relocation costs, Nomura said. The brokerage reduced the target price to Rs 1,943 from Rs 1,990 apiece. However, it upgraded the stock rating to 'buy' from 'neutral', as it expects growth momentum to pick up.

Nomura expects Havells India's growth, keeping aside the Lloyd segment, to recover to 17–18% over financial year 2026 and 2027. New capacities in cable, steady demand in wires and premiumisation in electric cables will lead growth. Normalisation of higher spends will drive Ebitda margin improvement. "We cut FY25/26/27F EPS by 10%/5%/2%," the brokerage said.

According to Nuvama, higher employee cost also impacted Havells India's healthy revenue growth and gross profit. The brokerage expects consumer sentiment to remain positive because of festivities, while industrial and project trends remained robust in the third quarter in the financial year 2025. The brokerage cut the EPS estimate for financial years 2025 and 2027 by 5–9% due to delayed margin recovery.

Nuvama cut the target price to Rs 1,940 apiece from Rs 2,000 apiece. The brokerage has a 'buy' rating.

However, Havells India's revenue growth met Motilal Oswal Financial Services' revenue estimates. A better-than-expected growth in the electrical cables and switchgear segments was impacted by a lower revenue from the cables and wire segment. Lower margin in switch gear and higher-than-expected loss in Lloyd resulted in 1% on the year decline in the Ebitda, the brokerage said. It trimmed the margin estimates by 100 basis points to 200 bps in the switchgear and Lloyd segment, and by 20 to 30 bps in the electric cables and lighting segments.

Motilal Oswal Financial Services cut the target price to Rs 1,740 apiece from Rs 1,830 apiece. It retained the stock rating to 'neutral'.

The switchgear segment margin of Havells India was down because of a change in channel mix and factory under absorption, which is attributed to plant relocation. The management expects margins to improve in the switchgear, electric cables, and Lloyd segments in the upcoming quarters. Moreover, it expects destocking in the wires segment due to lower copper prices. Restocking is anticipated in the fourth quarter of FY25.