Edelweiss is bullish on Havells India has recommended buy rating on the stock with a target price of Rs 564 in its research report dated October 23, 2017.
Edelweiss' research report on Havells India
Cables & wires and switchgears posted low single digit value growth, which adjusted for commodity price rise, seems to have de-grown in Q2FY18, purely attributed to deferred re-stocking by channel partners. However, in consumer durables and Lloyd segment (70% ACs) growth was slightly lower at 11% YoY (net of excise) despite the festival quarter this year.
We believe Havells with its best coverage (>85%) of the consumer durables/electricals market is well geared to reap the benefits of rising penetration/premiumisation over next 3-5 years. Moreover, with rising focus on tier-III/IV cities, we expect Havells to post better-than industry growth going ahead. At CMP, the stock trades at 37x FY19 PE.