Why did Havells India share price fall 5% despite healthy Q4 results? Key reasons explained

Havells India share price today: Havells India, one of the country's leading Fast-Moving Electrical Goods (FMEG) companies, saw its share price tumble 5% in Wednesday’s trade, April 23, to an intraday low of ₹1,583.40 apiece.

Despite the company’s Q4 and FY25 performance exceeding Street estimates, cautious commentary from the management dampened investor sentiment. The company stated that demand for cooling products such as air conditioners (ACs) is expected to be weak in the ongoing quarter due to a mild start to summer, particularly in the South.

This outlook prompted brokerage firms to trim their EPS estimates and accordingly lower their target prices. Domestic brokerage firm Kotak Institutional Equities reduced its EPS estimates by 3–4% and revised the target price down to ₹1,400 apiece while maintaining its 'Sell' call on the stock.

Equirus Securities also lowered its target price to ₹1,967 from the earlier ₹2,057, citing near-term challenges. However, the brokerage retained its 'Buy' rating on the stock.

According to Equirus' channel checks, there has been some slowdown in RAC (room air conditioner) demand—particularly in South India—a trend echoed by management, who cited weaker demand for summer products during March and April due to milder weather conditions.

Continued pressure on secondary sales could weigh on the company’s Q1 performance, especially given the higher base. That said, Lloyd will continue investing in growth pillars. Also, the near-to-mid-term RAC industry outlook remains intact. The brokerage models an FY25–FY28E Lloyd revenue CAGR of 14%. Moreover, with scale benefits and cost savings, margins are expected to improve to 4.5% in FY26E and 5.5% in FY27E.

Despite concerns over potential supply chain disruptions for RAC components, Havells remains optimistic due to the delayed onset of summer and muted demand in recent months. Recent media reports suggest that the government may relax BIS norms for sub-2-tonne AC components; if implemented, this could provide significant relief for the industry, as over 90% of volumes fall in this category, the brokerage added.

Cooling product sales face headwinds due to delayed summer in South

Management noted that consumer sentiment remains impacted by inflation. Lloyd benefitted in Q4FY25 due to positive channel sentiment at the beginning of the quarter and a relatively soft base (6% growth in Q4FY24).

Secondary demand for RACs declined in March and April due to a mild start to summer, especially in the South, which could weigh on primary sales in Q1, depending on how the season unfolds in the North. However, demand remains strong in the West and Central regions, where the ramp-up of the Tumkur plant is expected to support cable growth.

Havells India Q4 results snapshot

The company reported a 15.73% year-on-year (YoY) increase in consolidated net profit to ₹517 crore for the March quarter. Revenue from operations rose 20.24% to ₹6,543.56 crore in Q4FY25, compared with ₹5,442.02 crore in the corresponding period last fiscal.

For the full financial year (FY25), consolidated net profit rose 15.7% to ₹1,470.24 crore from ₹1,270.76 crore in FY24, while revenue from operations increased 17.21% to ₹22,081.33 crore from ₹18,838.97 crore a year earlier.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.