Motilal Oswal's research report on Havells India
Havells India (HAVL)’s 3QFY25 revenue grew 11% YoY to INR49b (in line) as better-than-expected growth in the ECD/Switchgear segments was offset by lower revenue from the C&W segment. Lower margin in switchgear and higher-than-expected loss in Lloyd resulted in ~1% YoY decline in EBITDA (7% miss). OPM stood at 8.7% vs. an estimated 9.3% for the quarter. PAT declined ~3% YoY to INR2.8b (13% miss) in 3QFY25. The Switchgear segment’s margin was lower on account of a change in channel mix (higher sales in the project business) and factory underabsorption due to plant relocation. However, management expects the margins to improve in the Switchgear, ECD, and Lloyd segments in the coming quarters. Further, after destocking in the wires due to lower copper prices, restocking is anticipated in 4QFY25.
Outlook
We reiterate our Neutral rating with a revised TP of INR1,740 (premised on 55x Dec’26 EPS). Key monitorables will be the performance of Lloyd in the upcoming summer season and the margin trajectory of the Switchgear segment.
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