Geojit Financial Services research report on Havells India
Havells India Ltd. (HAVL) is a leading player in electrical consumer goods in India. Its key verticals include switchgears, cables & wires, lighting fixtures, and consumer appliances. Revenue grew by 20% YoY and net profit was up 43% YoY, led by strong summer related sales. EBITDA grew by 43% YoY, and margins expanded by 160bps to 9.9% but missed our estimates 60bps, as full benefits of price hikes will be visible only in upcoming quarters. HAVL's core portfolio underperformed as cables growth was modest due to destocking given sharp decline in copper prices. We anticipate recovery in H2FY25 given healthy demand in real estate & construction sector. We anticipate better consumer sentiment in FY25 amid softening inflation and healthy demand from construction sector. We expect 28% CAGR growth in earnings over FY24-FY26E.
Outlook
We value HAVL at a P/E of 52x on FY26E given premium valuation and we downgrade to Sell from Hold rating, with a revised TP of Rs.1,644.
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