Havells India Ltd. share price target

Havells India (HAVL) has acquired Lloyd Electric?s consumer durable business (Lloyd Consumer) for an EV of Rs 16bn on a debt-free, cash-free basis. HAVL will acquire Lloyd?s intellectual property, manpower and distribution network. The deal is expected to be completed by 31 Mar17.

Strong Foray into Consumer durables sector by acquisition of Lloyd's consumer business: The company has announced the acquisition of consumer durable business from Lloyd electrical and engineering limited and feeders Lloyd corporation. The consumer durable business of Lloyd is engaged in sourcing, assembling, marketing anddistribution of consumer durables including air-conditioners, TVs, washing machines and other house hold appliances. Lloydis among the top three brands in Air conditioners category with very well network in Tier-1 and Tier-2 capital cities. Havells willacquire the consumer business infrastructure, people, distribution network including absolute ownership of intellectual property of brand Lloyd, logo, trademark etc.

Post divestment of Sylvania in FY16, Havells was scouting for an acquisition in the consumer durable space where it has no presence. Acquisition of LEEL's consumer business would help Havells to foray into the white goods category with a new product profile such as air conditioners, LED TV, washing machines, air coolers, etc. Under the CD category, LEEL recorded a 59% YoY increase in sales during FY16 to | 1384 crore supported by addition of new products and dealer push strategy, which led to a decline in EBIT margin by ~340 bps YoY to 7.6%....

Havells (HAVL) used the chaos in Q3 as an opportunity to engage better with the channel (1) Offered relaxations on annual targets and ongoing trade schemes, (2) Released working capital to the dealers from the QRG growth fund#, (3) Encouraged the conversion to mainstream/formal sector. The compa..

Strong Performance with Market Share Gains: Net sales for the quarter ended December 2016 were Rs.16221 mn as againstRs.14316 mn representing a 13.3% growth in value terms. Revenues have surged on back of strong growth from cables and consumer durables segment which hasgrown by 17.4% YoY and 19.0% YoY respectively. The absolute EBITDA came in at Rs.1930 mn showing a growth of 4.2% YoY with margin at 11.9% a decline of 104bps on YoY basis. The margins came short because of increase in copperprices which forms the basic raw material for Havells.

HIL is one of India's largest & fastest growing electrical and power distribution equipment manufacturers with products ranging from industrial & domestic circuit protection switchgear, cables & wires, motors, fans, power capacitors, CFL lamps, luminaries for domestic, commercial & industrial applications, modular switches, water heaters and domestic appliances covering the entire gamut of household electrical needs along with industry lights and cables. Havells owns some of the prestigious...

Havells? 3QFY17 net revenues grew by 13.1% YoY to Rs 14.9bn vs. expectation of 3.2% growth. EBITDA & APAT was up by 4% & 15% YoY. Havells? performance was ahead of our as well as market expectation. All four segments of Havells have grown despite adverse demand environment. The strategy to gain market share on sacrificing some margin is right strategy in the current environment.

Revenue increased by 3.68% to Rs. 1493.61 Cr in Q3FY17 when compared to the previous quarter. Also, it rose by 13.1% when compared with Q3FY16.

ICICI Securities Ltd | Retail Equity Research Havells reported a strong performance amid demonetisation in Q3FY17, reporting sales growth of 13% YoY. It was largely driven by cable & wire and electrical consumer durable (ECD) segments wherein the topline increased 18% YoY led by inventory build-up at dealer level amid rising raw material prices and higher trade discounts to dealers (to partly offset the impact of demonetisation). Lighting division (excluding CFL) recorded growth of 22% YoY while...

Operating revenues increased ~13% y-o-y led by 18% Y-o-Y growth in Electrical consumer durable segment and cable segment. However, Switchgears and Lighting & Fixtures segment grew by 2% Y-o-Y in Q3F.