In its latest equity research note dated April 23, 2025, ICICI Securities reiterated a BUY rating on Havells India, raising its target price to Rs 1,935 from Rs 1,800, indicating a potential upside of 16% from current levels. The bullish stance is driven by robust Q4FY25 earnings, growth in the Lloyd and cables segments, and margin stabilization in the switchgear business. Despite minor headwinds, Havells continues to shine with its diversified portfolio, premiumization strategy, and improving profitability outlook.

Strong Quarterly Earnings Signal Operational Resilience

Havells posted a 20.2% year-on-year revenue growth for Q4FY25, reaching Rs 65,436 million. EBITDA came in at Rs 7,570 million, up 19.3% YoY, while net profit rose 16% to Rs 5,180 million. Margins held steady with only a slight contraction in gross and EBITDA margins, demonstrating the company’s ability to maintain profitability despite raw material cost pressures and inflation.

• EBITDA margin for Q4FY25: 11.6%, down by 9bps YoY
• Gross margin contracted by 65bps due to change in product mix
• EPS for FY25: Rs 24.2, with a forward P/E of 68.8x

Lloyd Segment Emerges as a Growth Engine

The Lloyd Consumer division led the quarterly performance with a 39.2% YoY surge in revenue, supported by trade inventory up-stocking and a seasonal spike in air conditioner demand. Q4FY25 EBIT margin for Lloyd reached 6.1%, helping it close FY25 in the black with EBIT of Rs 1,175 million after three consecutive years of losses.

Despite strong primary sales, management flagged caution about softness in secondary sales in Q1FY26 due to a slow summer start, particularly in South India.

Cables Business Rides on Power Demand and Copper Prices

The cables segment recorded a 21.2% YoY increase in revenue as normalization of trade inventory, higher copper prices, and the operationalization of the Tumkur plant boosted volumes. EBIT margin stood strong at 11.9%, nearly stable from 12% in the year-ago quarter.

The segment's performance reflects increased industrial and infrastructure activity, signaling long-term demand visibility for power cables.

Switchgears See Margin Normalization; Residential Market Expands

Switchgear revenues grew 6.2% YoY, but EBIT dropped 3.3% YoY to Rs 1,776 million. Nonetheless, the segment saw EBIT margin rebound to 25.7% in Q4FY25, from a low of 18.2% in Q3FY25. This was attributed to improved sales mix and stabilization post mid-year margin pressures.

Havells is gaining market share in residential switchgears, although growth in industrial demand appears muted.

ECD and Lighting Segments Remain Subdued

Electrical Consumer Durables (ECD) saw moderate revenue growth of 9.5%, impacted by a delayed summer that hurt fan sales. However, the segment delivered margin expansion due to premiumization.

Lighting & Fixtures remained a laggard with just 1.5% revenue growth—marking the 10th consecutive quarter of sub-5% growth—mainly due to price deflation in LEDs and lower realization despite healthy volumes.

Revised Estimates Reflect Optimism into FY27

ICICI Securities revised FY27 earnings projections upward by 5.5%, factoring in stronger-than-expected recovery in Lloyd and cables. The brokerage expects EPS CAGR of 22.9% over FY25–27, supported by:

Expanding operating margins (projected to reach 11.3% in FY27)

Free cash flow of Rs 16,485 million in FY27

Return on Equity (RoE) rising to 22.4%

DCF-Based Valuation Points to Long-Term Upside

Investor Takeaway: Favorable Risk-Reward Profile

ICICI Securities maintains confidence in Havells' ability to navigate input cost volatility and seasonal demand fluctuations. The company’s premium brand positioning, diversified product base, and capacity additions support long-term growth.

Investment levels: Buy near Rs 1,665. Stop-loss Rs 1,580. Upside target: Rs 1,935–2,050 over 9–12 months.

Risks to Outlook

Delayed summer season may dampen Lloyd sales in Q1FY26.

Input cost inflation could pressure margins if not offset by pricing or mix changes.

Failure of new products or plant delays may impact future growth trajectory.

Havells India: A Solid Play on India's Durable Goods Growth

Havells India remains one of the strongest consumer durables franchises in the country. The Q4FY25 performance underscores the resilience of its business model and the strategic success of its sub-segmentation and brand-led approach. With a 16% upside potential and sustained double-digit earnings growth, the stock remains a compelling long-term investment for equity portfolios focused on consumption and infrastructure themes.