Archive · 21 Nov 2025
Havells' Mixed Results Spark Valuation Debate
Havells India, a major electrical equipment maker, had a mixed quarter.
While its cables business did well, the air conditioning unit Lloyd struggled.
Despite this, the stock price remains high, making some investors wonder if it's overvalued.
Havells India's revenue grew by 5% in Q2, its lowest in years
Air conditioning business Lloyd struggled with revenue down 18% and margins plummeting
Cables business, however, grew 12% and margins improved
Brokerages are slashing earnings estimates, yet stock trades at 63x earnings
Investors question if Havells' premium valuation is justified
- Who
- Havells India
- What
- Reported mixed results in Q2, sparking valuation debate
- When
- Recently
- Where
- India
- Why
- Due to a combination of factors including weak summer, inventory pile-up, and regulatory changes
Optimists
Pessimists
Lloyd's Performance
Optimists
Temporary setback due to weather, inventory, and regulations
Pessimists
Historically low margins and capital inefficiency
Valuation
Optimists
Premium valuation reflects strong core operations and brand equity
Pessimists
Unjustified given recent performance and earnings estimate cuts
- Q2 Revenue Growth
- 5%
- Lloyd's Revenue Decline
- 18%
- Cables Business Margin Improvement
- From 12.3% to 17.7%
- Stock Price-to-Earnings Ratio
- 63x
- Lloyd's Contribution Margin
- 1.7%