Havells has caught the attention of investors following a recent price target adjustment by Jefferies. The esteemed brokerage anticipates a 14% increase in the stock, setting a new target price at Rs 1,740. This target reflects an 11% potential upside from current trading levels. However, the stock has faced challenges, having dropped 17% over the last six months and experiencing a correction of over 5% in 2025 thus far.
Jefferies’ Insight on Havells and Goldi Investment
Jefferies highlights a significant development influencing its recommendation: Havells is preparing to allocate Rs 600 crore towards acquiring an 8-9% stake in solar module manufacturer Goldi. While this investment is seen as a strategic move, Jefferies maintains that it will not substantially affect Havells’ earnings, leading them to uphold a ‘Hold’ rating on the stock. Their analysis indicates that the stock is currently trading at 56 times its FY26 price-to-earnings (P/E) ratio, which is 20% higher than its historical 10-year average.
- Target Price: Rs 1,740
- Expected Upside: 14%
- Current P/E Ratio: 56 (20% above historical average)
- Year-to-Date Correction: 9%
Havells’ Strategic Solar Investment
The minority investment in Goldi is projected to conclude within the next 75 days, as part of Goldi’s broader fundraising initiative aiming for up to Rs 3,100 crore. This transaction is valued at 20 times the enterprise value of FY25 EBITDA, which is notably 20% lower than that of competitor Waaree (valued at 24x).
Despite this investment, Havells currently has minimal exposure to the solar sector, with less than 5% of its sales attributed to products like inverters, modules, solar cables, and DC switchgear.
Future Prospects in Renewable Energy
Havells’ management outlines a promising trajectory for renewable energy, predicting a 16% compound annual growth rate (CAGR) up to 2030, potentially reaching 500 GW in capacity. This figure signifies that 300 GW is expected to originate from solar energy. Additionally, the Indian solar energy market is buoyed by various supportive government initiatives.
Havells’ Q3 Financial Performance
In the third quarter of FY25, Havells reported a 3% decline in net profit, totaling Rs 278 crore, compared to Rs 287 crore in the same quarter last year. Conversely, revenue from operations surged by 10.8% year-on-year, reaching Rs 4,889 crore, up from Rs 4,414 crore during the corresponding period last year.
Stock Performance Overview
The performance of Havells stock has shown resilience, climbing over 8% in the last five trading sessions and delivering a 4.5% return over the past month. Yet, it is important to note that the stock has faced an 18% decline in the past six months, although it has achieved a 7% increase over the previous year.
Investors are closely monitoring Havells as it navigates its strategic investments and works to stabilize its stock performance in a challenging market environment.
