Buy Havells India; target Rs 668: Maximus Securities

Maximus Securities is bullish on Havells India and has recommended buy rating on the stock with a target price of Rs 668 in its November 5, 2012 research report.

“Havells India, net Income grew by 13% to Rs 964 crores during the second quarter ended September 30, 2012 compared to Rs 850 crores in the corresponding quarter ended September 30, 2011. During the period under review EBIDTA grew by 3% to Rs 119 crores as against Rs 115 crores in the corresponding quarter previous year ended September 30, 2011. These margins were impacted on higher advertisement and sales promotion expenses in the quarter. Net Profit grew by 24% to Rs 87 crores for the period ended September 30, 2012 compared to Rs 70 crores in the corresponding quarter previous year. Sales of switchgear division rose 15% to Rs 255 crores as against Rs 222 crores last year. Lighting and Fixtures division grew by 14% at 156 crores as compared to Rs 137 crores the corresponding quarter of the previous year. Cable segment has registered a growth of 42%. Similarly Electrical consumer division has grown by 33% this quarter. The management expects domestic business to grow by 18-20% in FY13, while Sylvania is expected to report strong growth with margin improvement in H2 FY13. At the CMP of Rs 581, the stock is trading at 23.73x FY12EPS. Despite slowdown in European region and macroeconomic headwinds, the company managed to post 13% upside in sales in Q2 FY12. The management expects the domestic business to grow by 18-20% in FY13.With strong growth in consumer business segment, positive management outlook and increase in market share, we therefore recommend a “BUY” with a target price of Rs 668. Valuation at 19.1x FY14E EPS,” says Maximus Securities research report. FIIs holding more than 30% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment

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