Prabhudas Lilladher's research report on Havells India
We downward revise Havells India’s (HAVL) FY26/FY27E earnings by 2.0%/2.6% to factor in the soft margins commentary related Cable & Lloyd businesses and downgrade our recommendation to ‘HOLD’ from ‘BUY’, in view of the significant run-up in stock price in the near past. Havells reported strong results, primarily driven by robust growth in the Cables and Lloyd segments, though future momentum appears cautious. RAC segment expected limited growth due to delayed summer, high primary sales in Q4FY25, and slowdown in secondary sales in Q1FY26 so far. W&C segment delivered strong 21.2% revenue growth, with a balanced 50:50 mix of volume and value growth with wires contributing 65% to the segment. The company has made a strategic investment in the solar sector through Goldi Solar, with a focus on residential and commercial sectors and not into utility business.
Outlook
We estimate revenue/EBITDA/PAT CAGR of 14.8% / 20.2% / 20.4% with ECD/Cables/Lloyd revenue CAGR of 14.0%/17.0%/15.6% over FY25-27E and EBITDA margin of 10.7% by FY27E (+90bps). Downgrade to ‘HOLD’, with TP of Rs1,717 (earlier Rs1,750), based on DCF, which implies 50x FY27E earnings.
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