The shares of Havells India Ltd. hit 23-month low on Tuesday as investors grapple with disappointing margins, cautious management commentary and near-term pressure in key segments such as Lloyd.
Margins Disappoint; Outlook Turns Cautious
A key overhang for the stock has been Q3 margin performance, which fell short of market expectations. JP Morgan believes margins are likely to remain range-bound in the near term, limiting operating leverage despite stable revenues. The brokerage also flags that overall EPS growth is not accelerating meaningfully, as weakness in certain segments offsets steadier performance elsewhere.
Management commentary has added to the caution. The company has highlighted a volatile raw material environment and lingering commodity cost inflation, which could continue to pressure margins if input costs remain elevated. This has dampened confidence in a sharp profitability recovery in the near term.
Lloyd Faces Seasonal And Competitive Pressure
The Lloyd consumer durables business has emerged as another pain point. Lloyd reported a 5.6% YoY decline, largely due to weak seasonal demand. Management indicated that channel inventory is now normalising, but near-term growth remains under pressure given subdued demand conditions.
Competition is also intensifying, with aggressive pricing by peers expected to weigh on performance in the near term. While channel stocking has aided growth in cables and wires due to pricing actions, it has also led to pricing pressure in domestic wiring, adding another layer of margin risk.
Raw Material Volatility Clouds Recovery
Management remains cautious on demand visibility, citing fluctuating raw material prices and the risk that sustained commodity inflation could keep margins under strain. While price hikes driven by channel stocking have supported topline growth in some categories, the benefit could be temporary if competitive pressures and cost volatility persist.
Havells Share Price Today
The scrip fell as much as 5.88% to Rs 1,362 apiece on Tuesday, lowest level since Feb. 14, 2024. It pared gains to trade 5.31% lower at Rs 1,370.30 apiece, as of 12:44 p.m. This compares to a 0.65% decline in the NSE Nifty 50 Index.
It has fallen 14.36% in the last 12 months and 3.80% year-to-date. Total traded volume so far in the day stood at 3.19 times its 30-day average. The relative strength index was at 64.32.
Out of 40 analysts tracking the company, 28 maintain a 'buy' rating, nine recommend a 'hold,' and three suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target stands at Rs 1,651.50 indicating an upside of 20.5%.
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