Anand Rathi is bullish on Havells has recommended buy rating on the stock with a target price of Rs 611 in its research report dated May 13, 2020.
Anand Rathi 's research report on Havells
The weak Q4 for Havells was led by a 20% y/y drop in revenue due to the lockdown, resulting in an `8bn sales loss across divisions. While rural markets are opening up, urban markets will take a little longer to recover (key for Havells). Pre-buying in the channel in Jan-Feb restricted a major fall in Q4 AC sales; recovering sales loss of the last two months will be a challenge. Expecting a gradual recovery, over FY20-22 we expect 7%/12% CAGRs in revenue/PAT with RoE/RoCE reaching a healthy ~18%/17%, and FCF generation continuing.
We retain a Buy on the stock and our target (`611, 42x FY22e P/E).
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