Shares of Havells India Ltd. hit an all-time high on Thursday after its fourth-quarter profit emerged, beating analysts’ estimates, prompting brokerages to raise the stock’s target price. They also raised consumer electronic producer’s earnings estimates for better margins but were cautious about their stance due to higher valuations, seasonality and input cost headwinds.
Havells India’s fourth-quarter net profit rose 24.8% year-on-year to Rs 447 crore.
CLSA raised their FY25/26 earnings per share by 7–10%, mainly on better margins, while raising revenues by 1%. It also raised its target multiple due to strong growth and a better margin outlook.
Citi Research, too, increased the price-to-earnings target to 60 times from 53 times earlier due to signs of demand revival and improvement in AC business margin. According to management comments, Citi stated that initial signs of B2C demand improvement are visible. “However, the impact of pending price hikes due to commodity cost inflation needs to be monitored,” Citi added.
Nuvama Institutional Research anticipates further margin improvement on price hikes in Q1 FY25 and volume growth.
CLSA has downgraded Havells India from ‘underperform’ to ‘sell’ while raising the target price to Rs 1,560 per share from earlier Rs 1,325 apiece. Citi maintained a ‘neutral’ rating with the target price raised to Rs 1,814 per share from Rs 1,544 a piece earlier.
