Buy Havells India; target of Rs 1800: ICICI Securities

ICICI Securities research report on Havells India

While the impact of early monsoon on off-take of RAC, fans and coolers was higher-than-expected, we believe the impact is transitory in nature and there is negligible impact on long-term value creation. We believe (1) Havells is likely to benefit via market share gains as smaller/ unorganised players are likely to be more impacted. (2) The company has invested in solar products and it considers solar as one of the major growth drivers in medium-long term. (3) The company has initiated various cost saving initiatives and it augurs well for long term. (4) We note other segments such as stabilizers and cables and wires continue to generate healthy demand. With real estate cycle progressing well, there is potentially strong demand for finishing products such as wires, lighting, switches in H2FY26 and FY27. (5) Havells has materially increased its investments in cables and wires which is also expected to emerge as one of major value drivers.

Outlook

We cut FY26-27E PAT by 7.3%-9.1% to factor in weak Q1FY26 and impact of high inventory at company and channel levels. At our DCF-based revised TP of INR 1,800, implied P/E works out to 53x FY27E. Maintain BUY.