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Here's why Havells share price was in demand on January 17; details here

The Board of Directors of Havells also declared an interim dividend of Rs 4 per equity share

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SI Reporter New Delhi

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Havells results impact: Home appliance company Havells share price was in demand on the last day of week, January 17, 2025.
 
Havells' share price rose as much as 3.89 per cent to hit an intraday high of Rs 1,617.95 apiece, despite posting a weak set of numbers in the December quarter Q3FY25 results,which missed Street expectations. 
 
However, at 10:17 AM, Havells shares were trading 1.06 per cent higher at Rs 1,573.85 per share. In comparison, BSE Sensex was trading 0.55 per cent lower at 76,616.94 levels.
  Havells Q3 results 2025
 
Havells India reported a drop of 1.7 per cent in its third-quarter profit for FY25 (Q3FY25), driven by increased labour and advertising expenses, which affected its margins. The company's profit stood at Rs 283 crore in Q3FY25, compared to Rs 288 crore in the same period last year (Q3FY24). 
 
 
Despite this, revenue from operations saw an 11 per cent growth to Rs 4,883 crore, while total expenses rose 12.3 per cent to Rs 4,564 crore.
 
The company attributed moderate overall revenue growth to fluctuations in commodity prices, which particularly impacted the wires segment. 
 
At the operating level, Havells reported a slight 0.2 per cent decline in earnings before interest, tax, depreciation and amortisation (Ebitda), which stood at Rs 432 crore in Q3FY25, compared to Rs 433 crore in Q3FY24.
 
The Board of Directors also declared an interim dividend of Rs 4 per equity share. The record date for the dividend has been set for January 22, 2025. Shareholders will receive the dividend on or before February 14, 2025, which is within 30 days from the date of declaration.
 
Havells segment-wise show
 
The domestic switchgear business witnessed growth, primarily driven by the real estate and project sectors. However, the industrial switchgear segment remained subdued. 
 
The power cables segment showed robust growth, with the Tumkur plant, though still in its ramp-up phase, beginning to contribute positively. On the other hand, softness in copper prices led to channel destocking in the wires segment, affecting revenues. 
The lighting division witnessed decent volume growth but continued to face revenue pressure due to persistent LED price deflation. 
 
The company noted that Switchgear margins declined during the quarter due to a shift in the product mix towards project-based business and under-absorption of factory costs caused by plant relocation. 
 
However, the company expects this to normalise in the coming quarters. Lighting division margins remained stable in the range of 31-32 per cent, while margins in the electrical consumer durables segment were impacted by an unfavourable product mix, especially in small domestic appliances.
 
What do brokerages say?
 
Nuvama highlights that the company's Q3FY25 results show healthy revenue (+11 per cent Y-o-Y) and gross profit growth (+15 per cent Y-o-Y), but these gains were offset by higher employee costs (+23 per cent Y-o-Y) and other expenses (+12 per cent Y-o-Y), the latter partly due to relocating an SG plant. 
 
The ECD segment continues to perform well, showing strong growth (+15 per cent Y-o-Y, +16 per cent CAGR), but margins were impacted by increased R&D and distribution costs. 
 
Despite positive consumer sentiment and robust industrial and project trends, Nuvama revised its FY25–27E EPS estimates downward by 5–9 per cent due to a delayed margin recovery. 
 
They forecast a 15 per cent/19 per cent/20 per cent revenue/Ebitda/PAT CAGR for FY24–27E and have set a new March-26E target price of Rs 1,940 (previously Rs 2,000), maintaining a ‘Buy’ rating.
 
Similarly, Investec reportedly maintained ‘'Buy' rating on Havells with a target price of Rs 1,850.
 
Meanwhile, reports suggested that CLSA maintained an ‘Outperform’ rating on Havells with a target price of Rs  2,120. They noted that while revenue met expectations, the company's Q3 Ebitda fell below estimates due to lower margins.

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First Published: Jan 17 2025 | 10:44 AM IST

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