Buy Havells; target of Rs 640: Edelweiss

Edelweiss' research report on Havells

We recently attended Havells India’s (HAVL) analyst meet. Key takeaways are: a) entrepreneurship culture has empowered management to take bolder organic/inorganic initiatives versus 10 years ago; b) aims to nurture 100 Business Leaders over 2-3 years to sustain growth; c) independent SBUs with separate P/L, marketing & business heads will not only enhance focus/rigour on each business, but will also help manage expanding operations; d) product innovation (SKU ramp up) & direct reach (2x jump in retailers) key focus areas to garner 2x growth across businesses in 4-5 years; and e) multi-pronged strategy to ensure Lloyds’ profitability ramp up over the medium term.

Outlook

Short/ Medium term triggers are profitability ramp up in Lloyd and pick up in currently struggling switchgear/cables business. We maintain ‘BUY/SO’ with a TP of INR640. For all recommendations report, click here

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