Buy Havells India; target of Rs 1523: YES Securities

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26 Aug, 2025 12:21

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YES Securities' research report on Havells India

Havells once again surprised positively on the revenue growth front with strong double‐ digit revenue growth led by 20% growth in volumes. Strong volume growth is on the back of robust demand for summer products which benefitted from timely onset of summer and pent up demand. Gross margins continued to remain under pressure and made new lows as fresh costs increase coupled with competitive intensity restricted effective and adequate price transmission. Management is confident of strong demand momentum continuing for the entire summer season. On the margin front, management expects gradual improvement once commodity prices stabilize. Given the thrust on revenue growth, we now factor in FY22‐24E growth trajectory of 14% CAGR. We have trimmed our margin estimates considering lower gross margins and normalization on A&P spends. We estimate EBITDA and PAT CAGR of 17% and 20% respectively. We marginally increase our target price to Rs 1,523 as we see strong revenue growth momentum and gradual margin improvement in next 2 years.

Outlook

We continue to maintain our positive stance on the stock and reiterate our BUY rating continuing to value the stock on 55x FY24E earnings. Current correction in stock price provides an ideal opportunity to enter the stock.

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