(Rating: BUY, TP: Rs1,390, Upside: 21%)
Outperformance continues with another quarter of earnings beat; reiterate BUY
- Havells delivered better than expected revenue growth on back of strong performance across product categories; ECD/Switchgears/Cables and wires outperformed with growth of 91%/96%/75% respectively, while Lighting/Lloyds/Others grew 52%/61%/67% respectively.
- Gross margins expanded 99bps yoy, while it has contracted 176bps qoq. Havells has been able to manage volatility in commodity prices better than its peers on back of timely pricing action.
- Inventory of summer products especially Fans and RAC is on the higher side on the back of lockdown during peak summer months. Company expects inventory to be liquidated in Q2. HAVL has launched innovative premium SKU's in Fans and revamped washing machine portfolio which has got good response from the market
- We expect FY21-24E growth trajectory of 13% revenue CAGR. Enhanced distribution, new product launches, sustained market share gains and better margin performance should drive outperformance over peers. We estimate FY21-24E EBITDA and PAT CAGR of 12% and 15% respectively. We maintain our positive stance on the stock, roll over our valuation to FY24 estimates and reiterate our BUY rating with TP of Rs 1,390 based on 55x FY24E earnings.
Shares of HAVELLS INDIA LTD. was last trading in BSE at Rs. 1143.85 as compared to the previous close of Rs. 1151.45. The total number of shares traded during the day was 149697 in over 8903 trades.
The stock hit an intraday high of Rs. 1166.55 and intraday low of 1139.05. The net turnover during the day was Rs. 172203831.