Buy Havells India; target of Rs 1870: LKP Research

buy

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Havells (HAVL) has reported a healthy quarter, with sales growing 12% year-on-year (YoY) to ₹54.3 bn, aligning with both our and consensus estimates. This growth was primarily driven by a favorable start to the summer season, an upturn in the real estate sector, and strong B2B sales. Notably, the surge was led by Cables (up 14% YoY to ₹17.9 bn) and ECD (up 22% YoY to ₹9.1 bn) owing to a comparatively lower base. Moreover, the gross margin saw a significant increase of 230 basis points (bps) YoY, reaching 32.8%. EBITDA also exhibited a healthy growth of 20% YoY, reaching ₹6.4 bn, with EBITDA margin expanding to 11.7% for Q4 and 9.9% for FY24. These figures represent a 80bps and 40bps expansion respectively, surpassing our expectations. In the quarter, Lloyd experienced a 5.9% increase in revenue and achieved a ₹360 mn EBIT, marking a turnaround after ten quarters of losses. Management anticipates sustained profitability in this segment, attributing it to enhanced capacity utilization and other cost-saving measures. The ECD and Wires and Cables segments performed exceptionally well, buoyed by infrastructure-driven demand and robust growth in switchgears. Meanwhile, the Lighting segment recorded decent revenue growth despite significant price erosion.

As a result of margin improvements driven by enhanced efficiencies, we have revised our EPS upwards. Considering the early positive indicators in B2C consumer demand due to the real estate revival and sustained industrial and infrastructure-led demand, we maintain our Buy recommendation with a revised price target of ₹1,870.

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.