Dolat Capital highlights gradual recovery in demand, improving operating leverage, growth in the solar segment and sustained cost discipline will support Havells' margin expansion over FY26E-FY28E; however, near-term pressures relating to commodity price inflation remain.
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Dolat Capital Report
Havells India Ltd.'s Q3 FY26 revenue grew 14.3% YoY led by strong 33% growth in both cables and wires and other segment (led by solar products). Timely onset of winter aided heating products sales in ECD (+4.2%). Lloyd (-5.6%) remained muted following a weak summer.
Switchgears grew 8.2% while lighting (-3.5%) was impacted by a shift in festive season.
Ebitda margins expanded 50 basis points to 9.2% in Q3FY26. Ebit margins in C&W/ECD/Switchgears/Others expanded 80/150/390/370 bps resp., while lighting contracted 350bps. Lloyd saw operating loss of Rs 60.4 crore.
Havells remains optimistic on gradual demand recovery, amid industry headwinds from commodity inflation and an evolving regulatory environment. Margin improvement through cost rationalization and calibrated price hikes remains a key focus. Room AC inventory to normalize by March'26.
Dolat Capital revises its FY26E/FY27E/FY28E EPS by -4/-1/0.5% to Rs.25/31/37, respectively. Maintain ‘Accumulate' rating with revised target price of Rs 1,630, valuing at 44x FY28E EPS.
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