Hold Havells India; target of Rs 259: ICICIdirect

ICICIdirect.com has recommended to hold Havells India with a target price of Rs 259, in its research report dated July 28, 2015.

July 29, 2015 / 12:28 IST

26 Aug, 2025 12:21

Volume

Todays L/H

ICICIdirect.com's report on Havells India
Havells India’s (HIL) performance was muted in Q1FY16 with standalone revenue posting a decline of ~1% YoY due to the poor performance of industrial products category. Slackness in industrial activity hit revenue growth of the cable, switchgear and lighting segments to the tune of 4%, 3% and ~2% YoY, respectively. However, the electrical consumer durable (ECD) segment recorded sales growth of ~9% YoY driven by water heater and fan segment

A decline in sales of industrial products coupled with higher employee expenses and foreign exchange loss took a toll on EBITDA margin to the tune of ~21 bps YoY during Q1FY16

A lower EBITDA margin coupled with higher depreciation charges negated the impact of higher other income as net profit remained flat on a YoY basis at ~Rs 107 crore during Q1FY16

The performance of Sylvania remained under pressure in Q1FY16 as revenues declined ~4% YoY to ~€103 million while it reported an operating loss of €0.2 million after providing €3.6 million restructuring cost during Q1FY16. It recorded a loss of €4.4 million against net profit of €0.3 million during Q1FY15

"At the CMP, the stock is trading at a PE multiple of 34.3x FY16E and 27x FY17E. We value the stock using sum of the part method. We value the standalone business at 25x FY17E EPS and Sylvania’s business at 5x FY17 EV/EBITDA and arrive at a target price of Rs 259. We expect Havells to record revenue, earnings CAGR of 7%, 14% for FY14-17E, respectively", says ICICIdirect.com research report.