Bank of America (BofA) Securities has upgraded Havells India from Underperform to Buy, citing that the earnings downgrade cycle seems to have largely played out and risk-reward has turned favourable. The global brokerage firm raised its target price on the stock to ₹1,785 per share from ₹1,400 earlier, indicating an upside potential from the current market price of ₹1,532.
According to the note dated July 22, 2025, BofA believes that most of the concerns around earnings cuts, summer weakness, and pricing pressure are already factored in. Since September 2024, street estimates had cut Havells’ earnings by 19–16%, but the visibility of growth is expected to improve over FY26–28. BofA acknowledges that sluggish progress in Lloyd’s profitability, competitive pressures in cables, and weak summer were key risks, but these appear to have been accounted for in valuations, which are already 22% below peak levels.
In the near term, Lloyd, which makes cooling products, is likely to see subdued demand due to an early monsoon and elevated inventory, but BofA notes these are largely known risks now. Meanwhile, festive season demand is expected to benefit segments like wires & cables (W&C), small appliances, and lighting, helping sequential recovery in the coming quarters.
BofA also highlighted that W&C continues to outperform and is better positioned among consumer durables, contributing significantly to Havells’ resilience despite seasonal headwinds in air conditioners.
Key Metrics from BofA Report
| Metric | Previous | Current |
|---|---|---|
| Investment Opinion | B-3-7 | B-1-7 |
| Investment Rating | Underperform | Buy |
| Target Price (₹/share) | 1,400 | 1,785 |
| 2026E EPS (₹) | 26.78 | 26.65 |
| 2027E EPS (₹) | 34.90 | 33.48 |
| 2028E EPS (₹) | 38.74 | 38.64 |
| 2026E EBITDA (₹ mn) | 24,801.1 | 24,694.6 |
| 2027E EBITDA (₹ mn) | 32,457.0 | 30,824.1 |
| 2028E EBITDA (₹ mn) | 35,446.6 | 34,983.3 |
With the downgrade cycle behind and festive tailwinds ahead, BofA sees Havells as well-placed for medium-term growth, led by penetration in ACs, strong momentum in W&C, and recovery in small appliances and lighting segments. The report suggests that investors can now look at Havells more positively with improved confidence in earnings and margin stability.
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