INSUBCONTINENT EXCLUSIVE:
Brokerage Anand Rathi has a buy call on Havells India with a target price of Rs 788.
The current market price of Havells India is Rs
680.20.
Time period given by brokerage is one year when Havells India price can reach defined target
Investment rationale by brokerageIn its latest quarterly results, Havells recorded net revenue growth of 23 per cent at Rs 21,909 million
as against Rs 17,774 million in same quarter previous year
Net Profit increased 4 per cent to Rs 1,786 million from Rs 1,711million in previous year quarter
solid double digits growth in quarter.
Havells looks to drive growth with technology upgradation
Channel expansion remains one of key strategic initiatives of company, focused on modern format retails, brand stores and online platforms
along existing relationships with distributors and direct dealers
With this, company targets to grow all its four key product groups viz
Washing Machines, Refrigerators, Room AC and TVs in double digits.
In terms of guidance, management expects Cable and wire business margin
in range of 15 per cent to 17 per cent in coming quarters, while range for lighting is expected at about 27 per cent to 30 per cent
Post completion of Lloyd plant, Capex is expected in range of Rs 200-250 crores every year.
In terms of macro scenario, consumer durables
Also, emerging middle class, increasing disposable income and easy access to credit are set to boost demand in sector.
Havells, which boasts
of around 8,500 dealers and 1,00,000 retailers in its business, aims to expand its major penetration zones -Metro, Tier I II Towns, while
it sees Rural sector and Tier III below towns as key penetration opportunity.
With solid fundamentals and favourable macro traits, we
believe company is well positioned for long-term growth and initiate our coverage on Havells India Ltd
with a BUY rating and a target price of Rs 788 per share.
