Buy Havells India; target Rs 519: Firstcall Research

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Buy Havells India; target Rs 519: Firstcall Research

Firstcall Research is bullish on Havells India and has recommended buy rating on the stock with a target price of Rs 519 in its December 8, 2011 research report.

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Firstcall Research is bullish on Havells India and has recommended buy rating on the stock with a target price of Rs 519 in its December 8, 2011 research report.

"Havells India is a billion-dollar-plus organization, and is one of the largest & India's fastest growing electrical and power distribution equipment manufacturer. Havells and its brands have emerged as the preferred choice of electrical products for discerning individuals and industrial consumers both in India and abroad. Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 13% over 2010 to 2013E respectively. The company has acquired a number of International certifications, like CSA, KEMA, CB, CE, ASTA, CPA, SEMKO, SIRIUM (Malaysia), SPRING (Singapore), TSE (Turkey), SNI (Indonesia) and EDD (Bahrain) for various products. The Company has posted net profit of Rs.702.40 million for the quarter ended on Sep 30, 2011 as against Rs.578.50 million in the same quarter last year, an increase of 21%."

"Havells India Ltd has posted net profit of Rs.702.40 million for the quarter ended on Sep 30, 2011 as against Rs.578.50 million in the same quarter last year, an increase of 21%. It has reported net sales of Rs.8518.10 million for the quarter ended on Sep 30, 2011 as against Rs.6966.40 million in the same quarter last year, a rise of 22%. Total income grew by 22.27% to Rs.8519.80 million from Rs.6967.80 million in the same quarter last year. During the quarter, EPS is Rs.5.63."

"At the current market price of Rs.440.00, the stock is trading at 19.16 x FY12E and 16.69 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.22.97 and Rs.26.36 respectively. On the basis of EV/EBITDA, the stock trades at 12.92 x for FY12E and 11.33 x for FY13E. Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 13% over 2010 to 2013E respectively. The company has acquired a number of International certifications, like CSA, KEMA, CB, CE, ASTA, CPA, SEMKO, SIRIUM (Malaysia), SPRING (Singapore), TSE (Turkey), SNI (Indonesia) and EDD (Bahrain) for various products. The Company has posted net profit of Rs.702.40 million for the quarter ended on Sep 30, 2011 as against Rs.578.50 million in the same quarter last year, an increase of 21%. Price to Book Value of the stock is expected to be at 3.37 x and 2.81 x respectively for FY12E and FY13E. Buy the stock for a target price of Rs 519," says Firstcall Research report.

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