Havells India Ltd. share price target

Havells India (HAVL)'s 3QFY22 earnings were 14% below our expectation, despite the topline being in line with expectation. While commodity price inflation did impact gross margins, as expected, cost-cutting measures such as ad spending, travel, etc. made a comeback. Adj. for an increase in ad spending, the earnings miss would have been broadly in-line with our expectation. From a two-year perspective, 3QFY22/9MFY22 saw a rev CAGR of 27%/15%. Adj. for price hikes, volume growth would have been flattish for 3Q, but still strong given the pent-up demand in the base quarter. The demand...

...

We expect HAVL to benefit from demand uptick in both Consumer & Industrial/Infra (25% of sales) portfolio given 1) Diverse product portfolio covering 70%+ of household electric sockets 2) Amongst top 3 players in most product categories (except Lloyd) 3) long runway for growth within current categories 4) Lloyd portfolio gaining traction & 5) focus on innovation & expansion of distribution reach. We estimate 17.9% earnings CAGR over FY21-24. Maintain Accumulate with DCF based TP of Rs1,381. Revenues up by 15.4%; PAT down by 12.4%: Revenues grew by 15.4% YoY to...

Havells India Ltd (HAVL) is a leading player in electrical consumer goods in India. Its key verticals include switchgears, cables & wires, lighting fixtures and consumer appliances. Q2FY22 Revenue grew by 31% YoY supported by broad based growth across products categories and higher realisation. Gross margin declined by 600bps YoY due to higher RM cost. Lower ad-spends and tight cost control measures, limited the fall in EBITDA margin to 340bps YoY to 13.8%....

Price hikes likely given RM volatility; margins seem to have bottomed out We increase our FY22-FY24 earnings estimate by 2-4% given resilient demand momentum despite an inflationary environment given 1) robust festive season build-up 2) strong housing segment demand 3) healthy traction in...

Havells India (HAVL)'s 2QFY22 earnings were 8% below our expectations despite the topline beat of 5%. Key operating parameters confirm our thesis of margin normalization from highs of FY21 even amid a strong demand environment. We expect the trend to continue over the next 23 quarters leading to strong topline growth, but muted EBITDA/earnings growth. Key positives include a) volume growth (ex-Cables) in the double digits, which is likely to sustain over the next few quarters; b) an uptick in the B2B business, with volume growth reflecting in Cables hereafter; and c)...

Havells reported healthy revenue growth of 31.7% YoY. However, the gross margin was down 605bps YoY due to (1) revenue mix deterioration, (2) steep commodity inflation and (3) lag effect of price hikes. The company benefitted from revival in economy and higher infrastructure spending. Profitability of Lloyd segment remained under stress even in Q2FY22 due to higher input prices and negative operating leverage.

Havells India Ltd (HAVL) is a leading player in electrical consumer goods in India. Its key verticals include switchgears, cables & wires, lighting fixtures and consumer appliances. Q1FY22 Revenue & PAT grew by 76% & 270% YoY, led by strong...

New launches, rural expansion intact in a COVID-disrupted year HAVL's FY21 Annual Report emphasizes on operations in a COVID-19 disrupted year. The management continued to focus on expanding distribution, particularly in rural areas, and launching newer and innovative products. All these measures led to HAVL's capitalizing on pent up demand arising post the lifting of lockdown restrictions,...