Prabhudas Lilladher's research report on Havells India
Havells India’s (HAVL) reported healthy growth in revenue led by Cables and Lloyd’s non-season products (22.8%/18.5% YoY), while Switchgear saw soft revenue growth (+3.4% YoY). The company expects ECD segment growth momentum to continue from non-season products with positive demand outlook and some uptick in consumer trends. With Lloyd strategy focused on growth with profitability, we estimate positive EBIT for FY25. Led by capacity addition at Tumakuru and stability in RM prices, Cables business growth is likely to pick up in the coming quarters. We have downward revised our FY25E earnings by 4.3% to factor in the lower margin in H1FY25, while maintaining FY26E/FY27E estimates over strong commentary.
Outlook
We estimate revenue/EBITDA/PAT CAGR of 16.1%/21.6%/22.8% for FY24-27E with ECD/Cables/Lloyd segment revenue CAGR of 15.0%/17.7%/18.0% over FY24- 27E and EBITDA margin to reach 11.4% by FY27E (+150bps). Maintain ‘Accumulate’ rating at a DCF-based target price of Rs2,036 (same as earlier), which implies 54x FY27E earnings.
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Havells India - 21102024 - prabhu
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