The electrical and wiring industry in India is a crucial segment of the country’s infrastructure development, driven by rising demand for electricity, industrial expansion, and urbanization. As the country’s power consumption continues to grow, there is an increasing need for reliable electrical systems and high-quality wiring solutions across residential, commercial, and industrial sectors. The industry is also witnessing innovation with the introduction of energy-efficient and sustainable products.
With the government’s push towards electrification, smart cities, and renewable energy adoption, the industry is poised for significant growth. Companies like Havells India, Polycab India, Finolex Cables, and Bajaj Electricals are key players, offering a wide range of electrical products and wiring solutions. The future looks promising, with the growth of e-mobility, automation, and energy-efficient infrastructure providing new avenues for expansion.
Share Price
The shares of Havells India Limited are currently trading at Rs. 1,602 up by 1.79% from its previous close of Rs. 1,574.2. The stock also touched an intraday high of Rs. 1,625 as of January 20, 2025.
Q3 Results
Havells India Ltd. reported a slight growth in sales for December 2024, increasing from Rs. 4,414 crore in December 2023 to Rs. 4,889 crore. However, the company’s EBITDA showed a marginal decline, falling from Rs. 433 crore in December 2023 to Rs. 426 crore in December 2024.
This led to a slight reduction in the operating profit margin (OPM), which decreased from 10% in December 2023 to 9% in December 2024. Net profit also saw a dip, with the figure decreasing from Rs. 288 crore in December 2023 to Rs. 278 crore in December 2024.
Brokerage Recommendations
Prabhudas Liladher
Rationale for Upgrade to ‘BUY’
Havells India Ltd. (HAVL) reported weak performance, mainly due to slower revenue growth in Cables and margin contraction in switchgear and ECD, driven by changes in the product mix. Despite these challenges, the company expects some improvement in key segments, particularly in Wires sales, as copper prices stabilize and real estate demand picks up. ECD growth is anticipated to continue with seasonal products benefiting from a healthy summer season and rising consumer demand.
Outlook and Revised Earnings Estimates
While the margin pressures persist, with Switchgear margins expected to improve from 18% to 24%, the company’s strategy remains focused on growth with profitability. However, the revised earnings estimates for FY25, FY26, and FY27E reflect lower margins in the first nine months of
FY25, leading to a downward revision of earnings by 10.6%, 10.2%, and 6.3% respectively. The company’s ECD, Cables, and Lloyd segments are expected to grow at a healthy CAGR of 14.8%, 15.4%, and 18.7% over FY24-27E.
Target Price and Recommendation (17.6% Upside Potential)
Given the significant correction in the stock price, the analyst has upgraded the recommendation to ‘BUY’ from ‘ACCUMULATE’. The target price has been revised to Rs 1,890 (earlier Rs 2,036), based on a discounted cash flow (DCF) model. This target price provides an upside potential for investors, taking into account the company’s expected recovery in the coming quarters.
Anand Rathi
Brokerage Recommendation and Rationale
Havells India Ltd. (HAVL) faced challenges in Q3, with fluctuating commodity prices impacting domestic wire growth, leading to a moderation in overall revenue growth. However, the festival season saw a rebound in demand. The company’s elevated investments in brand-building and talent during the quarter are expected to stabilize, which should help in improving margins moving forward. Furthermore, Havells is optimistic about expanding margins in its Lloyd’s AC category, which it views as a significant growth opportunity.
Outlook and Target Price (20.7% Upside Potential)
Given these factors, the brokerage retains a positive outlook on Havells and maintains its ‘Buy’ rating. The target price has been revised to Rs 1,949, based on a valuation of 54x FY27E earnings. This updated target price reflects a strong growth trajectory and potential margin expansion, particularly in the AC segment, making Havells an attractive investment opportunity for the medium to long term.
Written By: Dipangshu Kundu
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