Havells has consistently gained market share in most of its categories even during a challenging environment. Core business will recover with improvement in demand trend and expected relief in liquidity in trade channels. Favourable base over the next 4 quarters (10% decline in EBITDA) will lead into an earnings upcycle. We expect margins to recover faster than volume growth. Amidst slowdown, management plans to tighten the belt on non-essential costs. We see enough levers for margins to mean revert. We recently (2QFY20) upgraded stock to BUY post seeing 16% fall in stock price. We expect worst is behind for Havells and healthy performance will re-rate the stock. Havells reported another let down. Co has been challenged by (1) Slowdown (real estate, industrial and govt projects), (2) Liquidity issue leading to low trade inventory and (3) WIP in Lloyd. We believe earnings upcycle will begin from 4QFY20 onwards led by favourable base, channel filling opportunity and gradual recovery in demand. We cut our EPS by ~6% for FY20-22 to factor slower recovery. We value Havells at 36x on Dec-21 EPS, our TP is of Rs 710. Maintain BUY.