Neutral Havells India; target of Rs 1700: Motilal Oswal

Motilal Oswal's research report on Havells India

Aditya Birla Fashion and Retail’s (ABFRL) combined revenue grew 6% YoY, driven primarily by robust growth in ABFRL (demerged). EBITDA increased significantly, driven by improved profitability in Ethnic and Pantaloons and demerger-related adjustments. ABFRL (demerged) revenue grew 9% YoY, driven by strong performance in Ethnic (+19% YoY) and TMRW (+27% YoY), while Pantaloons posted a 1% YoY decline. EBITDA improved sharply on account of ~470bp margin expansion in Pantaloons and significant margin expansion to ~10% in Ethnic. Aditya Birla Lifestyle Brands (ABLBL) delivered ~2.5% revenue growth on the back of ~9% retail LTL for Lifestyle Brands and ~24% EBITDA growth driven by ~285bp margin expansion on reduced markdowns, better channel mix, etc.

Outlook

Havells India’s (HAVL) FY25 annual report emphasizes its strategic focus on innovation, capacity expansion, market penetration, and digital transformation. The expansion of omni-channel distribution, particularly in rural markets and modern trade, has further strengthened the brand reach. Digitization initiatives, including the rollout of MES systems and the ‘Havells One’ app, have enhanced operational agility and consumer engagement.