Havells India Ltd – Fundamental Analysis

By | 3rd March 2018

HAVELLS INDIA LIMITED

CMP: 507.20     Target Price: 586.00     Upside:15%

Face Value (Rs.) 1.00
52 Week High/Low 592.70/396.40
Market Cap (Rs. in Cr.) 31707.53
EPS (Rs.) 8.48
P/E Ratio (times) 59.83
P/B Ratio (times) 9.68
Dividend Yield (%) 0.69
Stock Exchange BSE

 

Havells Ltd
Havells Ltd

 

INVESTMENT RATIONALE:

  • Havells India Limited is one of India’s largest & fastest growing electrical and power distribution equipment manufacturers with products ranging from industrial & domestic usage. It owns some of the prestigious global brands like Crabtree, Reo & Standard Electrical. It now operates a network of 90+ branches and representative offices in over 50 countries with a network of 20,000 distributors.
  • Lighting  & fixtures revenue grew on a 21%jump in sales from streetlights aided by strong growth in LED segment. According to the management of the company, lighting continues to grow across consumer and professional business with impressive growth in B2B segment.
  • The company has 12 state-of-the-art manufacturing plants in India located at Haridwar, Baddi, Sahibabad, Faridabad, Assam, Alwar and Neemrana, manufacturing globally acclaimed products, synonymous with excellence and precision in the electrical industry.
  • During Q3FY17, growth witnessed across product categories except cables. The company has witnessed good growth in Lighting and ECD, improvement in Switchgears. Revenue from switchgear division was Rs 344 crore during the quarter as against Rs 331 crore in the third quarter of the financial year 2016-17. Wires business has registered 17% value growth. Lighting continues to grow across consumer and professional business with impressive growth in B2B segment. The management is confident that the growth for this segment will continue in coming years.
  • Fans, appliances and water heaters have well performed with market leading growth. The company retained market leadership in premium fan segment which contributes 2/3rd of ceiling fans with the highest average price realization in industry. In Water heaters, the company is firmly established as top 3 players with premium and technology product positioning.
  • It has pioneered the concept of exclusive brand showroom in the electrical industry with ‘Havells Galaxy’. It became the first FMEG Company to offer door step service via its initiative ‘Havells Connect’.

VALUATIONS:

The company has been continuously growing in each business parameter and it is expected that it would be direct benefitted by the Government initiatives such as “Housing and power for all”. It is best placed to attain scale across businesses with its new SBU (Strategic Business Unit) structure and focused product-wise branding strategy Thus, it is expected that the stock will see a price target of Rs.586 in 8 to 10 months time frame on an expected P/E of 43x and FY19 EPS of Rs.13.62.

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Disclaimer:

My descriptions, videos, presentations are only for educational and information purposes and under no circumstances should be used for making investment decisions. I cannot guarantee the accuracy of any information provided.
The stocks picks are based on my own research and personal views and sometimes are from newspapers, tv channel program, magazines, etc. No part of compensation is or will be directly or indirectly related to the views and recommendations of this research. I have not served as an officer director or employee of company and have not been engaged in market – making activity of the company covered in the research report.
Consult qualified financial advisor before making any investment decision.

 

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