Shares of Havells India Ltd. are the worst performers on the Nifty 500 index on Thursday, April 23, trading 6.24% lower at ₹1,264.60 near its day's low level as of morning hours. According to reports from Upstox, the stock dropped to its intraday low of ₹1,265 during early trading, compared to ₹1,348.70 at the previous stock market close. The decline follows at least three analyst downgrades after the company's March quarter results, with brokerage firms citing cautious management commentary about raw material inflation and demand outlook.
Three prominent brokerage firms downgraded Havells India following the Q4 results. Morgan Stanley downgraded the stock to 'underweight' from 'equalweight' and cut its price target to ₹1,171 from ₹1,532. HDFC Research downgraded the stock to 'add' from 'buy' and reduced its price target to ₹1,470 from ₹1,520. JM Financial also downgraded it to 'add' from 'buy' and cut its price target to ₹1,490 from ₹1,750. Despite these downgrades, 29 out of 39 analysts covering the stock maintain a 'buy' rating, while only three have a 'sell' rating and seven have a 'hold' recommendation.
According to Upstox, Havells India reported revenue of ₹6,705.20 crore in Q4, representing a marginal 2.47% increase year-on-year from ₹6,543.56 crore in the same quarter last year. The company achieved a net profit of ₹723.39 crore, a 40% increase from ₹517 crore in the same quarter of the previous fiscal year. However, EBITDA declined 4.4% to ₹728 crore from ₹761 crore in Q4FY25, with EBITDA margin contracting to 10.9% compared to 11.6% in the same period last year. The bottom line was significantly boosted by a steep jump in other income, which surged nearly fivefold to ₹325.8 crore from just under ₹70 crore a year ago, primarily driven by a ₹283-crore fair value gain.
On the technical front, the Relative Strength Index (RSI) of the 14-day average dropped under 30 in the oversold territory after the opening bell on Thursday, triggering high volume losses for the company's stock. As per Upstox, trading volumes surged past 3 million shares across both stock exchanges on April 23. The stock is now down 10% so far this year, reflecting sustained investor concerns about the company's operational performance despite strong profit growth.
While several brokerages downgraded the stock, some maintained optimistic ratings. CLSA maintained its 'outperform' rating with a price target of ₹1,535, noting that unseasonal rains, slow onset of summer and pre-buying have impacted the cooling products business, but low base and harsher summer augurs well for growth in Q1. HSBC maintained its 'buy' rating but cut its price target to ₹1,560 from ₹1,700, cutting growth estimates mainly in ECD and Lloyd segments. Nomura retained its 'buy' rating but cut revenue estimates by 4% and margin estimates by 60 basis points to 10.7% for FY2027, leading to an 11% cut in Earnings Per Share estimates. Goldman Sachs maintained a 'buy' rating while revising its target price downward to ₹1,640 from ₹1,720, noting weak Q4 revenue performance across most segments with the exception of solar.
