Copper price rally: Havells, Polycab shares down 7-9% in Jan; concerns overdone?

A sharp surge in copper prices has triggered 7-9 per cent fall in shares of white goods companies such as Havells India Ltd and Polycab India Ltd, amid fears inflation in copper prices may hurt their margins. ICICI Securities, however, insisted there is negligible correlation between copper price change and revenue growth, gross margin and Ebitda margin of Havells and Polycab in medium-long term.

Havells India declined 7.17 per cent in 2026 so far. Polycab India fell 8.78 per cent during the same period.

ICICI Securities said copper prices have increased 50.7 per cent in January till date over January 2025 levels after considering the impact of rupee depreciation. It said larger companies could gain market shares and manage inflation via price hikes, product mix change, change in trade spends and cost-saving initiatives. 

The domestic brokerage believes that smaller and unorganised players would be hurt the most, as larger players could gain market shares. Lastly, it believes macro environment and competitive intensity are major forces to determine revenue growth and profitability rather than commodity inflation. 

"We advise long-term investors to accumulate Havells and Polycab as the fears of copper price inflation are overdone," ICICI Securities said.

Copper prices & Havells
ICICI Securities said Havells India may be able to pass on most cost increases via price hikes and/or cost-saving initiatives. It said there is a strong correlation between copper price change and Havells’ gross margin (-0.63), indicating high probability of a correction in gross margin with inflation in copper prices.

"The correlation at Ebitda margin level is less (-0.34). We believe the company has more levers (reduction in ad-spend, managing trade discounts, employee cost management, reducing overheads etc.) to maintain EBITDA margin in spite of high commodity prices," it said.

Copper prices & Polycab India
ICICI Securities said there is no material correlation between copper price change and revenue growth, gross and Ebitda margins of Polycab. "We believe strong volume growth and steady cost initiatives by Polycab have allowed it to manage inflationary pressures well," it said.

ICICI Securities said a rise in commodity prices do affect the entire industry But  large industry-leading players such as Havells and Polycab have the ability to manage the inflationary situation better than smaller players. 

"They also benefit with market share gains as smaller players may suffer material losses during inflationary periods," it said.