Geojit BNP Paribas is bullish on Havells India has recommended buy rating on the stock with a target price of Rs 433 in its research report dated January 19, 2017.
Geojit BNP Paribas' research report on Havells India
In Q3FY17 HAVL‟s EBITDA margins declined by 110 bps YoY to 12.8% due to higher dealer discounts and delay in pass over of higher copper prices. Going forward with normalisation of liquidity we believe that EBITDA margins are likely to improve. Management focus on higher advertisement spends will help the company to gain high brand recall. We factor EBITDA margins to be at 14.3% & 14.5% for FY18E & FY19E.
Revenue & PAT expected to grow at healthy 14% & 17% CAGR over FY16-FY19E. Given strong performance in adverse situation and improved earnings outlook HAVL is expected to command premium valuation. We value HAVL at 33x (30x earlier) FY19E P/E and maintain „Buy‟ rating with a revised target price of Rs 433.
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First Published on Jan 20, 2017 03:29 pm