Havells India Q4FY26: Stock drops 7%, targets cut

Stock slides after results and mixed commentary

Havells India shares fell sharply on Thursday, April 23, after the company reported a mixed set of Q4FY26 numbers and brokerages published diverging views on the outlook. The stock slipped 6.7% on the BSE to an intraday low of ₹1,260.25 per share. Over the same period, the BSE Sensex was down 0.82% at 11:05 AM, indicating the move was stock-specific rather than a broad market sell-off.

The immediate trigger was a combination of modest top-line growth, a decline in EBITDA and margin, and cautious management commentary on near-term demand in consumer-facing categories. Cooling products, in particular, remain sensitive to the pace and intensity of the summer season, and brokerages referenced a relatively mild start to the season and channel inventory movements.

Q4FY26 headline numbers: revenue up, EBITDA down

Havells reported Q4FY26 consolidated revenue of ₹6,688 crore, up 2% year-on-year, supported by margin improvement in cables and wires and lighting. However, consolidated EBITDA fell about 4% year-on-year to ₹730 crore, with EBITDA margin at 10.9%. Consolidated net profit rose to ₹734.24 crore, up 41% year-on-year.

A separate earnings summary in the provided text attributed a large part of the profit jump to other income, which rose nearly five-fold to ₹325.8 crore, driven primarily by a ₹283 crore fair value gain booked during the quarter. That summary also pegged quarterly EBITDA at ₹728 crore and EBITDA margin at 10.8%, versus 11.7% in the comparable quarter.

Segment performance: cables strong, Lloyd weak

Within the quarter, performance diverged across segments. Cables and Wires (C&W) remained the standout, with revenue rising about 14% year-on-year to ₹2,470 crore. Switchgear revenue grew about 6% to ₹740 crore, while Lighting revenue rose about 2% to ₹450 crore. The ECD segment declined about 2% to ₹980 crore.

Lloyd revenue declined about 19% year-on-year to ₹1,520 crore, making it one of the key weak spots highlighted by analysts tracking cooling-led categories. Management commentary also pointed to consumer-facing categories staying relatively subdued due to persistent cost pressures.

Management view: strong infra momentum, muted consumer mood

Management said momentum in industrial and infrastructure-linked segments remained strong. At the same time, it indicated consumer-facing categories were relatively subdued, citing persistent cost pressures.

Notably, Havells refrained from issuing growth guidance, citing evolving macro conditions. The company said its focus would remain on efficiency improvement, brand building, innovation, and distribution expansion.

Why the stock fell: visibility concerns and summer sensitivity

The brokerage notes cited in the text repeatedly returned to two near-term questions: how quickly summer demand improves, and how channel inventory and pricing play out after a slow start. Consumption trends for the summer portfolio were described as subdued, and channel inventory normalisation was flagged as a factor for domestic wires and certain consumer categories.

While investors reacted to the reported quarter, the sharper impact appears linked to forward visibility and margin assumptions, especially for Lloyd and other cooling-related lines where competitive intensity and commodity costs were discussed as headwinds.

Key Q4FY26 facts at a glance

What brokerages changed: targets cut, ratings mixed

Nomura maintained a Buy rating but cut its target price to ₹1,620 from ₹1,798. It said cables demand linked to infrastructure and capacity ramp-up could support growth, and also pointed to solar ramp-up as supportive. At the same time, Nomura lowered Lloyd EBITDA margin estimates to -1% for FY27 and 2% for FY28 (from 3% and 4%) to reflect sharp commodity cost increases and elevated competition. It also said it cut revenue estimates by about 4% and reduced EBITDA margin assumptions, resulting in EPS cuts for FY27 and FY28.

ICICI Securities retained a Buy and cut its target to ₹1,615 from ₹1,725. It highlighted 14% revenue growth in Cables and Wires and noted domestic wires deceleration due to channel inventory normalisation, while still pointing to volume growth. For ECD, it flagged the impact of channel pre-stocking in Q3FY26 ahead of BEE norm changes and delayed onset of summer, and said it expects recovery in Q1FY27 as inventory normalises.

Motilal Oswal Financial Services kept a Neutral rating with a target price of ₹1,340, noting solar-driven growth in the ‘other’ segment and capacity expansion in solar and industrial cables. JM Financial downgraded the stock to Add from Buy and cut its target to ₹1,490 from ₹1,515, citing conservative margin expansion assumptions given higher investments in advertising and promotion, brand initiatives, and R&D.

The broader brokerage round-up in the text also included Morgan Stanley downgrading Havells to Underweight from Equal-weight and cutting its target to ₹1,171 from ₹1,532, citing weak earnings visibility amid macro pressures and rising competition. Goldman Sachs maintained Buy but cut its target to ₹1,640 from ₹1,720, pointing to weak Q4 revenue across most segments except solar and noting that margins were supported by inventory gains despite pressure on gross margins. Nuvama maintained a Buy rating with a target price of ₹1,610.

Brokerage snapshot: ratings and target prices

What to watch next: inventory, pricing, and margin assumptions

The near-term focus remains on whether summer demand normalises after a slow start, and how quickly channel inventory stabilises across categories. Brokerages also highlighted pricing actions and the effect of commodity costs, particularly for Lloyd, where competitive intensity and cost increases were explicitly cited.

For longer-term drivers discussed in the text, cables tied to infrastructure spending and capacity ramp-ups in cables and solar were repeatedly referenced as potential supports. But the lack of growth guidance and the margin debate across segments suggest the stock’s next moves may hinge on clearer demand and profitability trends in the next few quarters.

Bottom line

Havells’ Q4FY26 result combined modest revenue growth with weaker EBITDA and margin, while net profit was higher amid a sharp rise in other income. The stock reaction reflected uncertainty around summer-led demand, channel inventory dynamics, and margin visibility, which led several brokerages to cut target prices even as many retained positive ratings. Investors will watch Q1FY27 commentary closely for signs of demand normalisation and the impact of costs and competition on margins.