Hold Havells India; target of Rs 393: Geojit BNP Paribas

Q1FY17 revenue grew by 17% YoY, led by Switch gears 20%, Lighting & Fixtures 22% YoY, Cables & wires 5% and Electric appliances 21%. Even though Cables & wires segment was impacted by fall in commodity prices, the segment witnessed a strong volume growth of 20%. Fans a major product in ECD segment grew by 19% aided by intense summer. Switchgears growth was aided by higher export growth (34% YoY). Export market is seeing traction with HAVL‟s focus on addition newer geographies and products (fans and lightning & fixtures). We factor revenue CAGR of 16% over FY16-FY18E.      

HAVL revenue growth momentum continues with reported revenue beating consensus estimates for second time in row led by strong volume growth in all the products segments. Management increased focus on new launches, internal controls, leveraging its existing brands and focus on retailers is reflecting on its performance. Going forward, we believe that HAVL is likely to maintain its premium valuation given its brand visibility, diversified product profile & wider distribution network. We maintain target P/E at 32x on FY18E EPS of Rs12.3 and maintain to Hold with a target price of Rs 393.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.