Why is Havells India falling/rising?

Recent Price Movement and Market Context

Havells India’s stock closed at ₹1,423.20, down ₹17.80 on the day, continuing a two-day losing streak that has seen the share price fall by 1.78%. The stock is trading close to its 52-week low, just 4.44% above the lowest price of ₹1,360.05 recorded over the past year. This proximity to the annual low signals investor caution and a lack of upward momentum in the near term.

Moreover, the stock has underperformed its sector by 0.41% on the day, and it currently trades below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. Such technical indicators often suggest bearish sentiment among traders and investors, reinforcing the downward pressure on the share price.

Despite this, investor participation has risen, with delivery volumes on 21 Nov increasing by nearly 48% compared to the five-day average. This heightened activity may reflect increased trading interest, possibly from institutional investors reassessing their positions amid the stock’s recent weakness.

Fundamental Strengths and Valuation

Havells India remains a fundamentally strong company with a low debt profile, boasting an average debt-to-equity ratio of zero. The firm has demonstrated healthy long-term growth, with net sales increasing at an annual rate of 20.77% and operating profit growing at 15.58%. Its return on capital employed (ROCE) averages 32.27%, indicating efficient utilisation of capital to generate profits.

The company’s return on equity (ROE) stands at 16.9%, and it trades at a price-to-book value of 10.3, suggesting a fair valuation relative to its historical peer group. Despite the stock’s negative return of 14.80% over the past year, Havells India’s profits have grown modestly by 3.7%, though the price-to-earnings-to-growth (PEG) ratio is elevated at 16.8, which may deter some value-focused investors.

Institutional investors hold a significant 34.81% stake in the company, reflecting confidence from well-resourced market participants who typically conduct thorough fundamental analysis. With a market capitalisation of ₹90,428 crore, Havells India is the second largest player in its sector, accounting for nearly 31% of the industry’s market share and generating annual sales of ₹21,667 crore, representing almost a quarter of the sector’s total revenue.

Weak Quarterly Performance and Market Underperformance

Despite these positives, the company’s recent quarterly results have disappointed. For the quarter ending September 2025, net sales declined by 10.8% compared to the previous four-quarter average, falling to ₹4,779.33 crore. Profit before tax excluding other income dropped by 18.7% to ₹328.33 crore, while net profit after tax decreased by 9.6% to ₹319 crore. These declines indicate a slowdown in operational performance and have likely contributed to the negative sentiment weighing on the stock.

Furthermore, Havells India has underperformed broader market indices over multiple time frames. Its one-year return of -14.80% contrasts sharply with the Sensex’s gain of 7.31%, and over three years, the stock’s 14.42% appreciation lags well behind the Sensex’s 36.34% rise. This persistent underperformance relative to benchmarks and sector peers has eroded investor confidence and pressured the share price downward.

Conclusion: Why Havells India Is Falling

In summary, Havells India’s recent share price decline is primarily driven by disappointing quarterly results that revealed a contraction in sales and profits. This short-term weakness compounds a longer-term trend of underperformance relative to the broader market and sector indices. Although the company maintains strong fundamentals, including low debt and solid profitability metrics, these have not been sufficient to offset investor concerns about near-term growth prospects and valuation pressures.

The stock’s technical indicators, such as trading below all major moving averages and proximity to its 52-week low, further reinforce the bearish sentiment. While increased trading volumes suggest active investor interest, the prevailing market mood remains cautious. Investors may be awaiting clearer signs of a turnaround in operational performance before committing to the stock again.

Given these factors, Havells India’s current price trajectory reflects a market discounting near-term challenges despite its robust long-term fundamentals.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →