Neutral Havells; target of Rs 1650: Motilal Oswal

Motilal Oswal's research report on Havells

We met with Havells’ (HAVL) management to gain insights into industry trends and the outlook for key business segments. The management remains optimistic about growth prospects across core categories, supported by margin improvement initiatives. The company continues to invest in manufacturing, brand building, distribution, talent development, premiumization, and R&D, positioning itself for long-term success. The summer season has begun on a positive note, which should drive growth for Lloyd, with profitability sustained through operating leverage and cost controls. Demand for cables & wires remains strong, with a stable long-term growth outlook. In the switches and switchgear segment, domestic switchgear demand has improved; however, industrial switchgear recovery is still awaited. The lighting segment remains impacted by pricing pressure, though volume growth remains strong. The company is focused on expanding its presence in professional lighting to drive profitability.

Outlook

We expect HAVL's EPS to grow at a 23% CAGR over FY25-27, supported by margin expansion in Lloyd and other key segments. We maintain a Neutral rating with a TP of INR1,650 (50x FY27E EPS).