Havells India Ltd. share price target

To benefit from revival in consumption spending given its strong presence across entire consumer electric space. We remain constructive on HAVL given its strong brand recall, expanding product portfolio, focussed network expansion, market share gains and revival in construction sector. We factor earnings to grow at robust 25% CAGR over FY18-20E....

Growth Across Segments - Maintain BUY: Havells revenue outperformed our expectations by 7% on the recovery in switchgear segment and growth in Lloyd segment. Havells core business grew by 19% contributed by all the segments except lighting and fixtures segment which had a degrowth of 5.1% due to lower EESL orders.

ICICI Securities Ltd | Retail Equity Research Havells reported strong revenue growth of ~19% (excluding Lloyd) supported by the strong performance of ECD and lighting & fixtures (excluding project business) segment wherein segment revenue was up 33% and 25% YoY in Q1FY19, respectively. In addition, cable and switchgear segment also recorded strong sales growth of 18% and 19%, respectively, led by a price hike (~9% increase in realisation in the cables segment) and export demand revival, respectively. Lloyds...

Incorporated in 1983, Havells is one of the largest and fastest growing manufacturers of electrical components and systems in India. It is the market leader in lightduty power distribution products.

Havells has posted a better-than-estimated performance in 1QFY19 led by higher margin in Cable & Wire and Electrical Consumer Durable (ECD) segments. While PAT zoomed by 73% YoY to Rs2.1bn, revenue surged by 31% YoY to Rs26.0bn mainly driven by impressive yoy performance of Lloyd (+165%, like to like growth of 14%), ECD (+29%), Lighting & Fixtures (+19%), Switchgear (+14%), and Cable & Wire (+4%). EBITDA margin expanded by 333bps yoy to 12.0% mainly led by higher margin in ECD segment (+653bps to 28.7%) and Cable & Wire segment (+511bps to 17%). The company has reported sustained revenue growth with robust improvement across product verticals. Last year during 1Q FY18, the performance was sluggish due to GST transition...

We value based on 36x P/E on Jun-20EPS and arrive at a TP of Rs 680. We maintain BUY. Havells posted yet another solid quarter with beat on Lloyd business. Overall performance was in-line with our estimates (above street consensus). Core business grew by robust 22% on a like-like basis (exp. 19%), while Lloyd surprised positively during an erratic summer with 14% like-like revenue growth (exp. 2%). Havells EBITDA/APAT grew by 81/73% (exp. of 72/73%).

Strong overall performance; broadly in line with estimates Havells reported robust 1QFY19 results with strong growth across product categories coupled with margin expansion. While Havells (ex-Lloyd) revenue/EBITDA grew 22% YoY (like-to-like)/37% YoY, Lloyd reported 14% like-to-like sales growth (vs. 10% FY19 guidance). We continue to believe in Havells' endeavours to expand its distribution (including B2B/Enterprise scale up) and product portfolio; also, brand building (spent INR 1.2bn in 1QFY19; +57% YoY) would go a long way in improving its growth trajectory as macros...

Q1 was a good quarter with inline margins and PAT. Core Havells at 19%, helped by the base of a pre-GST quarter last year. Expected revival of real estate in H2'19 will push core segments. We increase our FY19/20 earnings marginally by 2%/1% leading to an increase in target price to ` 672. Structural growth story should continue, and we...

Incorporated in 1983, Havells India Ltd is one of the largest and fastest growing manufacturers of electrical components and systems in India.

In its FY18 Annual Report, Havells has strongly focused on the role IT has played across the company (250-member team working on 200+ projects in sales and R&D;) to boost not only its strategy to penetrate the home segment deeper but also its engagement with dealers and channel partners. In FY18, it forayed into the white goods segment by acquiring the consumer durables business of Lloyd (reported strong margin performance) and expanded its existing consumer durables basket by launching water purifiers and personal grooming products. Havells continues to generate significant free cash flows (INR 10bn in FY18 vs. INR 5.8bn in FY17, adjusted for the Lloyd acquisition). We continue to remain bullish with a...