Havells India Gains 2% After Q2 Results; Brokerages Split on Outlook

Havells India Reports Mixed Q2 Results, Brokerages Divided on Future Prospects

Havells India’s latest quarterly performance has sparked varied reactions from analysts, reflecting a nuanced outlook for the consumer electrical goods giant.

Q2 Performance Overview

Havells India’s consolidated net profit for the July-September quarter rose by 9.72% year-on-year to ₹349.22 crore, up from ₹318.28 crore in the same period last year. This increase was driven by a significant revenue growth of 34.57%, reaching ₹6,432 crore compared to ₹4,779.33 crore in Q2 FY26. However, the company’s total expenses also surged by 34.47% to ₹5,991.98 crore, reflecting rising costs that may impact profitability.

Market Reaction and Stock Performance

Despite the mixed results, Havells India’s stock gained nearly 2% following the announcement, trading at ₹1,074 per share on the NSE. The broader market also saw a slight uptick, with the Nifty 50 index rising by 0.25%. The stock reached an intraday high of ₹1,091, indicating a positive sentiment among investors, possibly driven by the company’s robust revenue growth and management’s optimistic outlook.

Brokerage Insights: Divergent Views

Analysts are divided in their assessments of Havells India post-Q2 results. Nirmal Bang highlighted that while revenue exceeded their expectations, the contraction in gross and EBITDA margins—by 426 basis points and 26 basis points respectively—indicates challenges related to product mix and cost pressures. They noted that the renewables segment is emerging as a growth driver, currently generating ₹3 billion in quarterly revenue, and maintained a ‘Hold’ rating with a revised target price of ₹1,190.

Conversely, Nuvama pointed out a 35% year-on-year surge in standalone revenue, primarily from the Cables & Wires (C&W) segment. However, they also reported a decline in gross contribution margins and EBIT margins, attributing this to fluctuations in commodity prices and a high base effect. Nuvama has cut its earnings per share estimates for FY27 by 6% due to increased losses in Lloyd and set a target price of ₹1,430, maintaining a ‘Buy’ rating and identifying Havells as a top pick in consumer durables.

Future Outlook and Strategic Initiatives

Looking ahead, Havells is focusing on leveraging its brand and distribution network to build a sustainable, higher-margin business in the renewables sector without significant capital expenditure. Management remains optimistic about consumer demand and plans to implement price hikes of 5-7% in Q3 FY27 to counteract margin pressures. This strategic pivot could position the company favorably in a competitive market.

Key Highlights

• Q2 FY27 net profit increased by 9.72% to ₹349.22 crore.
• Revenue surged 34.57% year-on-year to ₹6,432 crore.
• Total expenses rose 34.47% to ₹5,991.98 crore.
• Nirmal Bang maintains a ‘Hold’ rating with a target price of ₹1,190.
• Nuvama sets a target price of ₹1,430, maintaining a ‘Buy’ rating.

Investor Note: The mixed reactions from brokerages highlight the challenges and opportunities facing Havells India. Investors should monitor the company’s strategic initiatives in the renewables sector and its ability to manage costs while driving revenue growth.