Havells India Shares Plummets 6% as Brokerage Downgrades Trigger Massive Sell-Off Following Weak Earnings

The rating downgrades were led by Morgan Stanley, which lowered Havells India from Equal-weight to Underweight and significantly reduced the target price from ₹1,532 to ₹1,171. HDFC Research also downgraded the stock from Buy to Add, cutting the target price from ₹1,520 to ₹1,470. Similarly, JM Financial shifted its rating from Buy to Add, revising its target price downward from ₹1,750 to ₹1,490. During the earnings call, Havells management adopted a cautious stance, citing rising raw material inflation across several categories. While management noted a good start to the summer, they clarified that demand has yet to gain momentum. Additionally, gas availability remains a persistent issue on the production side, though the company is actively taking steps to mitigate this constraint.

In contrast to the downgrades, CLSA maintained its Outperform rating with a fixed target price of ₹1,535. The firm noted that unseasonal rains, a slow start to summer, and pre-buying activities impacted the cooling products business, but it signaled strong growth potential for the first quarter of FY 2027 due to a low base and expected heatwaves. HSBC also retained its Buy rating but reduced the target price from ₹1,700 to ₹1,560, lowering growth estimates specifically for the ECD and Lloydsegments. Nomura upheld its Buy rating as well, though it trimmed the FY 2027 revenue estimate by 4% and the margin forecast by 60 basis points to 10.7%, resulting in an 11% cut to Earnings Per Share (EPS) estimates.

The stock’s performance over the past year has been a significant blow to investors. On April 23, 2025, Havells India reached a record high of ₹1,656.95 on the BSE. In less than a year, the stock plummeted 31.02% from that peak to a 52-week low of ₹1,143.00. Despite the current volatility and recent downgrades, the broader analyst sentiment remains cautiously optimistic; out of 39 analysts covering the stock, 29 maintain a Buy rating, seven recommend a Hold, and only three have issued a Sell rating. This massive correction highlights the market's sensitivity to margin pressures and the critical importance of the upcoming summer season for the company's recovery.