Havells India shares down 17% in 2025 on transitory headwinds; is it a good entry point?
ICICI Securities maintained a 'Buy' rating on the stock and revised its target price marginally lower to Rs 1,725 from Rs 1,775, based on a discounted cash flow valuation.
- Dec 17, 2025,
- Updated Dec 17, 2025 11:06 AM IST
ICICI Securities on Wednesday said it remained positive on Havells India, even as the near-term outlook is likely to remain soft due to weak demand for room air conditioners and the potential earnings impact from changes in Bureau of Energy Efficiency (BEE) norms for fans and air conditioners from January 2026.
The brokerage maintained a 'Buy' rating on the stock and revised its target price marginally lower to Rs 1,725 from Rs 1,775, based on a discounted cash flow valuation. The revised target implied a 46 times FY28 estimated earnings multiple. The stock corrected about 17 per cent in 2025 so far and 20 per cent over the past 12 months amid several transitory headwinds, which ICICI Securities viewed as an attractive entry point for long-term investors.
ICICI Securities said trade inventory in room air conditioners declined materially after the festive season, though it remained elevated on a year-on-year basis, reflecting slower primary and secondary offtake. It added that while secondary sales in air conditioners and fans were expected to remain weak in the December quarter of FY26, channel stocking could pick up toward the end of December due to pricing arbitrage ahead of the implementation of new BEE norms.
The brokerage said Havells consciously tapered discounts and freebies in the air conditioner segment to protect margins. It added that impending price hikes were likely to offset benefits from recent GST-related reductions. ICICI Securities expected price hikes in the mid-to-high single digits, driven by higher costs linked to BEE rating changes, raw material inflation, rupee depreciation and increased e-waste compliance costs. It said price increases were likely to be implemented in two to three tranches and expected similar actions across the industry.
On the strategic front, ICICI Securities noted that Havells was setting up a new research and development centre in Noida, aimed at supporting innovation-led product launches. The brokerage said incremental opportunities in solar, energy transition themes and new product introductions improved medium- to long-term revenue visibility.
Overall, ICICI Securities said Havells appeared focused on maintaining margin stability while diversifying its product portfolio, with inventory levels seen as manageable and normalisation expected to continue as demand stabilised.
ICICI Securities on Wednesday said it remained positive on Havells India, even as the near-term outlook is likely to remain soft due to weak demand for room air conditioners and the potential earnings impact from changes in Bureau of Energy Efficiency (BEE) norms for fans and air conditioners from January 2026.
The brokerage maintained a 'Buy' rating on the stock and revised its target price marginally lower to Rs 1,725 from Rs 1,775, based on a discounted cash flow valuation. The revised target implied a 46 times FY28 estimated earnings multiple. The stock corrected about 17 per cent in 2025 so far and 20 per cent over the past 12 months amid several transitory headwinds, which ICICI Securities viewed as an attractive entry point for long-term investors.
ICICI Securities said trade inventory in room air conditioners declined materially after the festive season, though it remained elevated on a year-on-year basis, reflecting slower primary and secondary offtake. It added that while secondary sales in air conditioners and fans were expected to remain weak in the December quarter of FY26, channel stocking could pick up toward the end of December due to pricing arbitrage ahead of the implementation of new BEE norms.
The brokerage said Havells consciously tapered discounts and freebies in the air conditioner segment to protect margins. It added that impending price hikes were likely to offset benefits from recent GST-related reductions. ICICI Securities expected price hikes in the mid-to-high single digits, driven by higher costs linked to BEE rating changes, raw material inflation, rupee depreciation and increased e-waste compliance costs. It said price increases were likely to be implemented in two to three tranches and expected similar actions across the industry.
On the strategic front, ICICI Securities noted that Havells was setting up a new research and development centre in Noida, aimed at supporting innovation-led product launches. The brokerage said incremental opportunities in solar, energy transition themes and new product introductions improved medium- to long-term revenue visibility.
Overall, ICICI Securities said Havells appeared focused on maintaining margin stability while diversifying its product portfolio, with inventory levels seen as manageable and normalisation expected to continue as demand stabilised.