Shares of Havells India fell sharply on Wednesday, declining 6.5% on the NSE to ₹1,260.10 after the company reported mixed fourth-quarter earnings. According to reports from The Hindu BusinessLine, the decline came despite strong profitability growth, with investors focusing on subdued revenue growth and weak segmental performance that weighed on overall sentiment. The stock has also hit a 52-week low of ₹1,200 in March 2026 and continues to trade below key moving averages, reflecting ongoing concerns about operational challenges.
The company delivered robust profit growth with standalone net profit rising 39.6% year-on-year to ₹723 crore for the quarter ended March 2026, but this figure was significantly boosted by a ₹283 crore fair value gain from its Goldi Solar investment. On a consolidated basis, net profit increased 39.9% to ₹723.39 crore versus ₹517 crore in the year-ago period. However, revenue from operations grew only 2.47% year-on-year to ₹6,705.20 crore, highlighting sluggish demand conditions across key segments. Operational profitability weakened with EBITDA declining 3.6% to ₹729 crore and EBITDA margins contracting by 70 basis points to 10.9% year-on-year, indicating the company did not fully pass on higher input costs through price increases.
Performance across product segments showed mixed results with the Wires & Cables segment continuing strong growth at 14% year-on-year revenue increase driven by price adjustments and moderate volume growth, benefiting from infrastructure and housing demand. However, the Electrical Consumer Durables (ECD) segment faced headwinds with revenues falling 2% year-on-year due to weak demand for fans and air coolers amid high channel inventories. The Lloyd consumer business reported a significant 19% revenue drop, showing continued difficulty integrating and improving the unit. The Switchgear segment achieved moderate 6.5% growth, supported by real estate and project demand, while the Lighting segment remained largely stable. The Others segment, boosted by Goldi Solar, showed strong growth, highlighting the reliance on investment gains to boost overall profitability.
Despite near-term operational pressures, Havells India's stock trades at high valuations with the reported FY28e P/E multiple at 42x and trailing twelve-month (TTM) P/E ratios hovering around 55x-64x as of April 2026. This valuation appears stretched, especially given the subdued revenue growth and margin compression. Analysts are split with a consensus 'Buy' rating, but recent downgrades and target price revisions from major brokerages like Morgan Stanley moving to 'Underweight' due to weak earnings visibility and margin pressure indicate caution among investors. Goldman Sachs maintained a 'Buy' but revised its target downward, while Nomura reiterated a buy rating with a target of ₹1,620, expecting consumption recovery and normal summer to act as key growth catalysts.
The broader consumer durables sector echoed Havells' challenges with muted demand in Q4 FY26, with cooling products particularly affected by a delayed summer and unseasonal rains. While industry revenue was forecast to grow 7%, earnings were expected to fall due to commodity cost pressures. Competitors like Polycab India reported much stronger Q4 revenue growth of 46.12%, highlighting a potential gap in market share capture. Management expressed optimism about demand revival and indicated they are monitoring inflation trends, with long-term factors like rising incomes and low market penetration still supporting the Indian consumer durables sector. However, volatile raw material prices and intense competition could temper earnings growth in the short term, with analyst price targets suggesting an average upside of 23% from mid-April 2026 levels.
