Havells India received cautious commentary from brokerages after its September quarter results, as Goldman Sachs and Jefferies cut their target prices even after retaining their existing ratings. Both brokerages flagged continued cost and margin pressures, even as revenue growth remained strong, led by the switchgear and cables and wires businesses.
Havells India September Quarter Results
- Net Profit: Rose 11.4% YoY to Rs 353 crore from Rs 317 crore.
- Revenue: Increased 34.6% YoY to Rs 6,417 crore from Rs 4,767 crore.
- Ebitda: Grew 30.5% YoY to Rs 577 crore from Rs 442 crore.
- Ebitda Margin: Declined to 9% from 9.3% a year ago.
Goldman Sachs On Havells India
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Goldman Sachs maintained its Buy rating on Havells India but cut its target price to Rs 1,225 from Rs 1,400.
- Strong revenue growth: Growth was driven by an acceleration in switchgear and cables and wires.
- Margin pressures persist: Profitability remains under pressure despite strong revenue growth.
- Slower recovery: Goldman Sachs expects earnings to be lower than previously estimated as margin recovery takes longer than anticipated.
Jefferies On Havells India
Jefferies maintained its Hold rating on Havells India and lowered its target price to Rs 1,220 from Rs 1,240.
- Performance in line: Results were in line with expectations, but cost headwinds continue.
- Price hike under consideration: Havells is evaluating a 5% to 7% price increase in the December quarter.
- Capex outlook unchanged: The company continues to focus on research and development, as well as cables and wires.
- Earnings growth outlook: Jefferies estimates a 15% compound annual growth rate in profit after tax over fiscal 2027-29.
What Should Investors Track?
Investors will track whether Havells can recover margins as revenue growth continues, particularly across its switchgear and cables and wires businesses. The proposed price hike in the December quarter, the pace of cost pressures easing, and the company's ability to deliver the expected earnings growth will remain key monitorables.
Also Read: Havells India Q2 Results: Profit Rises 11% To Rs 353 Crore
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