Buy Havells India; target of Rs 1865: Geojit Financial Services

Geojit Financial Services is bullish on Havells India has recommended buy rating on the stock with a target price of Rs 1865 in its research report dated November 19, 2024.

Broker Research

November 19, 2024 / 13:17 IST

BUY

26 Aug, 2025 12:21

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Geojit Financial Services research report on Havells India

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. Revenue grew by 16.5% YoY, surpassing expectations, but net profit grew by only 10% YoY. EBITDA saw a modest 2% YoY growth. Margins declined by 120 bps YoY to 8.4%, missing our estimates due to input volatility, higher employee costs, and increased advertising spending. HAVL’s core portfolio, Switchgear saw stable growth while strong growth in cables was due to re-stocking. Post-monsoon recovery in the real estate and construction sectors will further boost the core portfolio. Better consumer sentiment is anticipated in H2FY25, supported by festive and seasonal factors, driving overall growth. Due to input price volatility, we have reduced our margin estimates by 60 bps for FY25E and FY26E.

Outlook

We have upgraded our rating on HAVL from negative to positive, reflecting a 22% moderation in valuation from a recent peak of 69x. The stock is currently trading at a 1-year forward P/E of 55x. Given HAVL's strong brand recall, diverse product portfolio, and robust channel networks, we project a 21% CAGR in earnings over FY25-FY27E. Consequently, we value HAVL at a P/E of 52x as we roll forward to FY27E, assigning a BUY rating with a target price of Rs.1,865.

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