LKP Research Maintains Buy Recommendation for Havells India, Sets Price Target at Rs 1450.

Havells India Reports Disappointing Q4FY26 Results

Havells India, a leading electrical equipment company, reported a lackluster performance in the fourth quarter of fiscal year 2026. The company's revenue grew by a modest 2.5% year-over-year (YoY) to ₹67.1 billion, falling short of market expectations.

The quarter was marred by a decline in revenue from the company's Lloyd business, down 19% YoY due to a delayed summer season and elevated channel inventory. Additionally, the company's Electrical Consumer Durables (ECD) segment slipped 2% YoY as fans faced a demand air pocket following channel stocking driven by the Bureau of Energy Efficiency (BEE) in the previous quarter. In contrast, the Cables and Wires (C&W) segment remained the key driver of growth, posting a 14% YoY revenue increase led by industrial power cables, while domestic wires saw flat volume trends.

Despite a decline in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of 4.4% YoY to ₹7.3 billion, the company's margins improved to 10.9% due to inventory gains in C&W and year-end provision write-backs in the Lighting segment. Adjusted Profit After Tax (PAT) fell 6.7% YoY to ₹4.9 billion. However, reported PAT surged 40.6% YoY to ₹7.3 billion, largely due to a ₹2.5 billion fair value gain from the reclassification of investment in Goldi Solar. Excluding this one-time gain, the underlying business delivered a soft print.

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Looking ahead, management remains cautiously optimistic, with Lloyd channel inventory expected to normalize by the end of April 2026, calibrated price hikes of 5-20% underway across categories, and a planned capital expenditure of ₹8 billion for fiscal year 2027 focused on cable capacity and a new Research and Development (R&D) center.

Outlook and Recommendation

The company's near-term performance is expected to remain range-bound; however, medium-term growth drivers in C&W, solar, and gradual Lloyd recovery keep the structural thesis intact. We maintain a BUY recommendation with a revised price target of ₹1,450 (43x FY28E EPS).