'Buy' Havells Shares Maintains ICICI Securities Despite Near-Term Softness — Check Revised Target Price

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ICICI Securities Report

ICICI Securities remains optimistic on Havells India Ltd. although the near-term outlook appears subdued due to weak demand for air conditioners and potential earnings impact due to change in BEE norms effective January 2026.

The brokerage highlights:

• Room AC trade inventory has materially reduced post the festive season but still remains elevated YoY.

• Secondary sales in RAC and fans may remain weak in Q3 FY26. However, channel stocking can happen on the back of pricing arbitrage due to new BEE norms in last week of Dec’26.

• Impending price hikes could offset the GST benefits. Price hike is likely to be in mid-high single digits in our view considering commodity inflation and change in BEE norms.

• It consciously tapered discounts/freebies in RAC to protect margins.

• Havells is setting up a new research and development centre in Noida to launch innovative products.

• Incremental opportunities in solar, energy transition themes and innovation-led launches aid mid–long term revenue visibility.

ICICI Securities notes that Havells is focused on margin stability and portfolio diversification. The brokerage maintains a Buy rating with a revised DCF-based target price of Rs 1,725 (earlier Rs 1,775), implying a P/E of 46x FY28E EPS.

A 20% stock price correction over the past 12 months due to transitory issues offers an attractive entry point for long-term investors.

Key risks:

Steep increase in commodity prices; and material increase in competitive pressures.

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