Shares of Havells India surged on Tuesday, 19 November 2024, following the company’s announcement to establish a state-of-the-art refrigerator manufacturing facility in Ghiloth, Rajasthan. The stock climbed as much as 2.8 per cent, touching an intraday high of ₹1,664.10 on the Bombay Stock Exchange (BSE).
Stock Performance
By 11:38 AM, Havells shares were trading 2.47 per cent higher, priced at ₹1,657.60 per share. In comparison, the BSE Sensex rose 1.33 per cent to reach 78,370.08. Havells’ market capitalisation stood at ₹1,03,921.86 crore, underscoring its strong standing in the consumer electrical goods sector.
The stock has witnessed significant movement over the past year, with a 52-week high of ₹2,104.95 and a 52-week low of ₹1,273.40. Over the same period, Havells shares have gained an impressive 26.3 per cent, outpacing the Sensex’s 17.5 per cent rise.
Refrigerator Manufacturing Facility Announcement
Havells India has officially committed to establishing its refrigerator manufacturing facility in Ghiloth, Rajasthan, with a revised production capacity of 14,00,000 units to be achieved by Q2FY27. The company plans to invest ₹480 crore in this new venture, reflecting an upward revision from the ₹350 crore previously announced in August 2023, when the project was first proposed.
In its earlier intimation, Havells had planned to manufacture 10,00,000 units by Q1FY26. This expansion marks a strategic shift as the company transitions from outsourcing refrigerator production to manufacturing in-house, enhancing its control over quality and supply chain efficiency.
Financial Performance in Focus
In the September quarter (Q2FY25), Havells reported robust financial results, with consolidated net profit increasing by 7.5 per cent to ₹267.77 crore, up from ₹249.08 crore a year earlier. The company also posted a 16.38 per cent rise in revenue from operations, reaching ₹4,539.31 crore compared to ₹3,900.33 crore in the corresponding quarter of the previous year.
The company attributed its strong performance to improved consumer demand trends and robust growth across all segments. It also noted that the shift in the festive season had advanced its advertising and promotional spending into the September quarter, bolstering visibility and sales momentum.
However, total expenses rose 18 per cent to ₹4,268.94 crore, reflecting increased operational investments and rising input costs.
More Read
Strategic Implications of the Ghiloth Facility
The establishment of the Ghiloth manufacturing plant represents a significant milestone for Havells India. By moving refrigerator production in-house, the company is expected to achieve greater economies of scale, improved profit margins, and enhanced product quality. The new facility will also enable Havells to cater to growing consumer demand in a market that has seen rising interest in high-quality, energy-efficient appliances.
The investment of ₹480 crore aligns with Havells’ broader strategy to diversify its product portfolio and strengthen its foothold in the home appliances sector. Analysts believe this move will enable Havells to compete more effectively with established players in the refrigerator market while capitalising on growing consumer preference for domestic brands.
Broader Market Context
Havells’ announcement comes amidst a broader recovery in Indian equity markets. The BSE Sensex surged 1,113 points on Tuesday, reflecting upbeat global market sentiments. The robust performance of the consumer durables sector, including Havells, underscores growing investor confidence in India’s economic recovery and consumer demand resilience.
Looking Ahead
Havells India’s expansion plans highlight its ambition to remain at the forefront of the consumer electrical and home appliances industry. By bringing refrigerator production in-house, the company is poised to enhance operational efficiency and respond dynamically to market trends.
With a strong financial foundation and clear strategic direction, Havells India is well-positioned to sustain its growth trajectory, offering significant value to its shareholders and customers alike. Analysts remain optimistic about the company’s ability to execute its plans effectively and tap into new opportunities in the evolving consumer landscape.
