Posted on April 23, 2025, by Niftynews
📊 Havells India Share Price Falls to ₹1,583 – What Happened?
Havells India share price tumbled by 5% in intraday trading, reaching a low of ₹1,583.40. This came as a surprise to many investors since the company posted a strong Q4 FY25 performance, beating market expectations on both revenue and profit.
However, management’s cautious outlook on summer product demand, especially in the Room Air Conditioner (RAC) segment, sparked concerns among analysts and investors alike, leading to earnings downgrades and reduced target prices by several brokerages.
🧾 Q4 FY25 Results: Strong on Paper
Havells reported a robust set of numbers for the March 2025 quarter:
- Consolidated Net Profit: ₹517 crore, up 15.73% YoY
- Revenue from Operations: ₹6,543.56 crore, up 20.24% YoY
For the full year (FY25):
- Net Profit: ₹1,470.24 crore, up 15.7%
- Revenue: ₹22,081.33 crore, up 17.21%
These numbers suggest that Havells India shares is backed by a healthy and growing business. So why did the stock fall?
🧊 Cooling Products: A Hot Sector Facing a Cold Start
The key reason behind the Havells India share price decline is the management’s muted commentary on the cooling products segment, which includes ACs and other summer-dependent appliances.
According to the company, the mild start to summer in southern India has negatively impacted RAC demand. This sentiment was echoed by channel checks from Equirus Securities, which highlighted declining secondary demand in March and April—typically peak months for AC sales.
With Q1 being a seasonally crucial quarter for RACs, investors interpreted this as a warning of potential revenue softness ahead, contributing to the negative sentiment.
📉 Brokerage Reactions: Target Price Cuts and EPS Downgrades
🟠 Kotak Institutional Equities
- Call: ‘Sell’
- Target Price: ₹1,400 (reduced)
- Reason: Cut FY26 EPS estimates by 3–4% due to subdued summer demand and weaker volume growth.
🟢 Equirus Securities
- Call: ‘Buy’ (Retained)
- Target Price: ₹1,967 (down from ₹2,057)
- Reason: Temporary softness in RAC demand, but the long-term view remains optimistic.
Even with upbeat Q4 results, the downgrade in earnings forecasts and lower forward guidance weighed on market sentiment, leading to profit booking.
⚠️ Other Headwinds: Inflation & Supply Chain Concerns
Havells’ management also flagged consumer sentiment challenges due to inflation. Although Lloyd (Havells’ consumer durables arm) benefited from early-season optimism in Q4, that optimism hasn’t carried into Q1 FY26.
Additionally, the RAC industry is facing potential supply chain bottlenecks due to BIS certification issues on sub-2-ton AC components—over 90% of industry volumes fall in this category.
If the government does not ease BIS norms, industry players like Havells may face delayed component imports, further affecting Q1 performance.
🔍 Regional Demand Split: North vs. South
- South India: Mild weather = weaker RAC demand
- West & Central India: Stronger sales, especially with the Tumkur plant ramping up cable capacity
- North India: Still a wild card; if the summer picks up, demand could recover
📈 Long-Term Outlook Remains Positive
Despite the short-term volatility in Havells India share price, analysts believe the company remains on a strong long-term trajectory:
- Lloyd’s revenue CAGR projected at 14% (FY25–28)
- Margins expected to rise from 4.5% in FY26 to 5.5% by FY27
- Continued focus on premiumisation, channel expansion, and cost optimization
🔚 Final Thoughts: Correction or Caution?
The recent dip in Havells India shares is less about poor performance and more about investor nervousness over near-term headwinds. While Q4 FY25 results were strong, the uncertain demand environment, particularly for summer appliances, led to cautious commentary that triggered a pullback.
Still, for a long-term investors, this correction could be an opportunity, especially if North India experiences a hot summer, which could reverse the current narrative.
