Sell Havells India; target of Rs 500: Kotak Securities

Kotak Securities' research report on Havells India

Havells reported 39.5% y/y revenue growth at Rs 25.9 Bn in Q1FY19 driven by consumer durables and lighting business. Ex-lloyd revenues grew 19% y/y. Operating margin, reported at 12% in Q1FY19 was driven by the higher contribution margin in switchgear, cables, consumer durables and Lloyd business. Lloyd reported revenue of Rs 7.08 Bn and EBITDA margin at 9.3% in Q1FY19.

Outlook

We maintain our FY20 earnings estimate. In view of expensive valuations (at PER 33.6x FY20 earnings) we maintain 'SELL' rating with unchanged target price of Rs 500.