Honeywell Shares Rise 18% to Six-Month High Following Q4 Earnings, Target Price Boosted by JM Financial

Honeywell Automation India Surges 18.4% to Hit Six-Month High

Shares of Honeywell Automation India surged 18.4% in Thursday's trade, May 21, to hit a six-month high of ₹35,735, as investors reacted positively to the company's better-than-expected performance in the March quarter. This significant jump marks the stock's biggest single day rise in two years. If today's gains sustain till the close, it would signify a major turnaround in the company's fortunes.

The rally has also turned the stock's year-to-date returns positive, with gains of nearly 8%. The company's impressive performance was not limited to its financials, but also received a boost from domestic brokerage firm JM Financial, which raised its target price on the stock. Honeywell Automation India announced its Q4 and FY26 financial performance on Wednesday after market hours.

Q4FY26 Financial Highlights

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The company posted a 14.2% year-on-year rise in consolidated net profit to ₹160 crore in Q4FY26, compared to ₹140 crore in the same period last year. Revenue from operations increased 9% year over year to ₹1,180.7 crore from ₹1,114.5 crore in the corresponding quarter of the previous year. At the operating level, EBITDA rose 15.9% year-on-year to ₹184.8 crore from ₹159.4 crore, while EBITDA margins improved to 15.7% from 14.3% in the year-ago period.

For the full FY26, the company reported revenue and net profit of ₹4,682 crore and ₹525 crore, respectively. Along with the financial performance, the company also announced a final dividend of ₹110 per equity share for the financial year ended March 31, 2026, subject to shareholder approval at the upcoming annual general meeting.

Although the stock has been trending higher in recent weeks, it still trades significantly below its long-term 10-year valuation range of 40x–60x and also below other automation peers such as ABB India and Siemens, which trade closer to 60x. However, JM Financial believes margins have now turned the corner based on the Q4FY26 results.

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The brokerage said quarterly EPS of over ₹180 provides visibility for FY27E EPS of more than ₹750, implying an 11% rise in earnings. Accordingly, the brokerage broadly retained its FY28 estimates and valued Honeywell Automation India at 50x FY28E EPS of ₹880 to derive a target price of ₹44,000. It also upgraded the stock to a 'Buy' rating. The revised target price implies a potential upside of 23% from the previous closing price.

Honeywell Automation shares have rebounded significantly in recent months, with an 18% surge in April and another 13% gain in May, taking the cumulative rise to 36%. However, the stock still trades nearly 40% below its record high of ₹59,994, touched in June 2024. Although the stock's near-term outlook remains shaky, its long-term performance has been impressive, with gains of 1,340% over the past decade.