ICICI Securities research report on Havells India
We note three structural growth drivers from Q1FY24 as (1) the company is in early stages to develop white label business (EMS) via exports, (2) It has entered premium and luxury segment via launch of Havells Studio; we believe the premiumisation path could potentially result in structural margin expansion and (3) B2B sales are likely to remain strong in coming quarters. We also believe the correction in input prices and the likely revival in B2C sales in H2FY24 offer tailwinds to earnings. We remain positive on Havells and model it to report revenue and PAT CAGR of 14.5% and 28.1%, respectively, over FY23-FY25E. We cut FY24 earnings estimates to factor in delayed recovery in consumer demand.
Outlook
Maintain BUY with a revised DCF-based TP of INR 1,600 (implied 48x FY25E; Earlier TP: INR 1,450).
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