Havells shares fall 3%; CLSA downgrades to sell, Jefferies says buy

Shares of Havells India fell over 3 percent in morning trade on July 28, a day after the company reported a 64 percent fall in June quarter net profit.

The company's consolidated net profit came at Rs 63.98 crore for the June quarter of FY21, down 63.87 percent from Rs 177.09 crore in the corresponding quarter of the previous financial year.

Net sales came at Rs 1,483.40 crore in the June quarter, down 45.4 percent from Rs 2,716.88 crore year-on-year (YoY).

EBITDA stood at Rs 163.76 crore, down 48.63 percent from Rs 318.81 crore in Q1FY20.

Havells India EPS has decreased to Rs 1.02 in Q1FY21 from Rs 2.83 in Q1FY20.

Brokerages have mixed views on the stock after the company's Q1 show.

Global brokerage firm CLSA has downgraded the stock to 'sell' from 'underperform', but raised the target price to Rs 530 from Rs 505.

As per CNBC-TV18, CLSA sees Havell's Q1 results as better-than-expected but downgraded the stock as valuation looks expensive.

Jefferies, on the other hand, has a 'buy' call on the stock with a target price of Rs 695.

Jefferies highlighted that the company gained market share in select segments, mainly from unorganised players.

"Cost control measures of the company has been effective as ad spend was reduced. The balance sheet stays solid with net cash of Rs 840 crore. We view the company as a quality franchise with a diverse mix, market leadership. Lloyd is showing quarter-on-quarter (QoQ) margin expansion for 3 quarters now," said Jefferies.

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