Prabhudas Lilladher Expects Havells India to Reach Rs 1505

Havells India Sees Moderate Growth in Q4FY26

Havells India's performance in the fourth quarter of fiscal year 2026 (Q4FY26) was characterized by moderate growth, largely due to softness in the Electrical Consumer Durables (ECD) and Lloyd segments. However, the company's Wires and Cables (W&C) segment showed a healthy performance, with a growth of 14%.

The Wires segment witnessed flat growth in Q4FY26 due to channel inventory accumulation in the third quarter of fiscal year 2026 (Q3FY26). In contrast, the cables segment posted strong growth, driven by power cables. The ECD segment was impacted by the fan category due to channel accumulation in Q3FY26 following changes in Bureau of Energy Efficiency (BEE) norms. Other cooling categories were also affected by the delayed summer season.

The company maintained its market share in the ECD segment despite these challenges. In the Room Air Conditioner (RAC) segment, demand remained subdued from March 2026 till the first week of April 2026. However, traction has improved in the South and West regions, with channel inventories expected to normalize gradually by the end of April 2026.

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Key Highlights

Havells India has guided for a capital expenditure (capex) of approximately INR 8 billion in fiscal year 2027 (FY27), primarily towards the W&C segment. The company sees strong demand visibility in wires, with a portion of the capex allocated towards research and development (R&D) over the next 2-2.5 years.

To offset raw material (RM) inflation in the Lloyd segment amid global uncertainty, the company plans to implement price hikes in the range of 8-15%. The company also sees its solar portfolio as a key growth driver to support overall growth.

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Earnings Estimates and Outlook

We have downward revised our earnings estimates for fiscal year 2027 (FY27) and fiscal year 2028 (FY28) by 3.1% and 0.9%, respectively, driven by weak margins in the Lloyd segment and slower growth in the ECD portfolio. We have also downgraded our recommendation on Havells India to 'ACCUMULATE' from 'BUY' and maintained a target price of INR 1,505, based on a discounted cash flow (DCF) analysis, implying 45x earnings per share for fiscal year 2028 (FY28).