Buy Havells India; target of Rs 570: ICICI Direct

ICICI Direct's research report on Havells India

Havells reported sales growth of 17% YoY in Q4FY17 led by the strong performance of cable, switchgear and electrical consumer durable (ECD) by 13%, 16% and 28% YoY, respectively, post demonetisation. The company has taken a price hike to the tune of 2-4% YoY led by a rise in commodity price.

Outlook

Further, we believe exit from the overseas business would help the company focus on the domestic business and improve profitability to the next level. We upgrade the stock to BUY recommendation with a revised target price of Rs 570 (valuing the company at 36x FY19E earnings).