Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Havells India - Likely market shares gains across segments - ICICI Securities

Posted On: 2021-07-22 07:11:08 (Time Zone: UTC)

Havells reported stronger Q1FY22 than consensus estimates. In-spite of steep inflationary pressures, the company was able to improve gross margin by 90bps YoY due to (1) better revenue mix, (2) selective price hikes across segments and (3) cost saving initiatives. The company has gained market shares in most segments (our view) as its price hikes were relatively lower than unorganized / smaller players. Ahead, we model recovery in revenues / profitability of Lloyd which was impacted due to lockdown in key summer season. We model Havells to report PAT CAGR of 19.3% over FY21-FY23E with: (1) strong volume growth, (2) price hikes in high single digits and (3) benefits of cost saving initiatives and recovery in Lloyd. We remain structurally positive on the company due to its competitive advantages and growth opportunity in consumer durables. Maintain BUY with a DCF-based target price of Rs1,320 (56x FY23E; Earlier TP-Rs1,198).

- Q1FY22 performance: Havells reported revenue, EBITDA and PAT growth of 75.9%, 170.0% and 268.5%, respectively, YoY. Two-year revenue and PAT CAGR were -2% and 15.3%, respectively. We believe (1) strong consumer off-take, (2) market share gains from smaller/ unorganized players, (3) mid-high single digit price hikes across products and (4) favorable base helped to report strong revenue growth. Gross and EBITDA margins expanded 90bps and 470bps, respectively due to timely price hikes and cost saving initiatives.

- Strong growth across segments: Segment-wise revenue growth rates were as follows: Switchgears 98.4%, Cables 75.0%, Lighting & fixtures 50.7%, Electrical consumer durables 91% and Lloyd Consumer 62.5%. While there is strong consumer off-take, revival in Government and private capex is also leading to strong growth of Industrial and Infrastructure portfolio.

- Better revenue mix and acceptance of price hikes by consumers: Switchgears segment which has highest EBIT margin reported 98.4% revenue growth leading to overall margin improvement. We also believe the price hikes by Havells are largely accepted by the trade/ consumers with negligible impact on off-take.

- Delay in recovery of Lloyd: Due to covid wave-2, the revenues of Lloyd were impacted in its key summer season. Its profitability also remained muted at 2% in Q1FY22. However, we model steady recovery in revenues/ profitability of Lloyd in coming quarters and will provide tailwinds to the margins.

- Maintain BUY: We model Havells to report PAT CAGR of 19.3% over FY21-FY23E and RoE to be upwards of 20% over FY22-23. We remain positive on the company's business model due to strong moats and growth opportunities. We maintain BUY rating with a DCF-based target price of Rs1,320 (implied P/E 56x FY23E).

For details, click on the link below: Link to the report

Shares of HAVELLS INDIA LTD. was last trading in BSE at Rs. 1103.4 as compared to the previous close of Rs. 1088.35. The total number of shares traded during the day was 140804 in over 6007 trades.

The stock hit an intraday high of Rs. 1108.95 and intraday low of 1061.6. The net turnover during the day was Rs. 153270352.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Automobile Sector - Monthly Quick View - Aug'21 - Mixed Performance across Segments - Reliance Securities

Axis Securities initiating coverage on ICICI Securities

Company Update - Minda Corporation - Q1FY22 - ICICI Direct

Quant Pick - PVR Ltd - ICICI Direct

Quant Pick - ONGC - ICICI Direct

Peak in the headline wholesale inflation is behind us - WPI August 2021 - Acuité Ratings

Sansera Engineering - IPO - Strong Outlook with Steady Cash Flow - Reliance Securities

APL Apollo Tubes - Journey from a semi-commodity player to a branded one - HDFC Securities

Nazara Technologies Ltd - Upbeat in medium-term, Uncertain over Long-term - YES Securities

IPO Review - Sansera Engineering Ltd - ICICI Direct

Overall index is still 0.3% lower than the pre-pandemic levels - IIP July 2021

YES SECURITIES on Monthly General Insurance & Mutual Funds Data

India urban logistics spaces expected to cross 7 million sq. ft by 2022: JLL

Neogen Chemicals - Breaking into the next orbit with a bang - HDFC Securities

Gladiator Stocks - Bharti Airtel Ltd - ICICI Direct

Gladiator Stocks - V-Guard - ICICI Direct

Balkrishna Industries - Industry export growth accelerates - ICICI Securities

HDFC Life Insurance - Exide Life Acquisition - Maintain ADD - YES Securities

Gladiator Stocks - Grindwell Norton - ICICI Direct

Gladiator Stocks - Godrej Properties - ICICI Direct

Monthly Auto Volumes - August 2021 - ICICI Direct

Stock Tales - Easy Trip Planners - ICICI Direct

IPO Review - Vijaya Diagnostic Centre Ltd - ICICI Direct

AU Small Finance Bank - Attrition at top level remains key challenge; business momentum sustained in Jul/Aug'21 - ICICI Securities

Gladiator Stocks - State Bank of India - ICICI Direct

Gladiator Stocks - PNC Infratech - ICICI Direct

Vijaya Diagnostic Centre Ltd - IPO Note - YES Securities

Consumer Durables Sector - Lockdown mars performance yet again - Institutional Research Desk at HDFC Securities

75% of the employees today want to be in office at least once a week as compared to 52% in October 2020: JLL

Gladiator Stocks - Safari Industries - ICICI Direct

Gladiator Stocks - Interglobe Aviation - ICICI Direct

IPO Review - Ami Organics Ltd - ICICI Direct

Q1FY22 GDP - 31st Aug 2021 - Acuité Ratings & Research

Avanti Feeds - Higher input prices hurt margins - ICICI Securities

Company Update - Restructuring - Aarti Industries - ICICI Direct

Q1FY22 Company Update - MM Forgings - ICICI Direct

Company Update - Arvind Fashions - ICICI Direct

Zomato - Can margins and multiples surprise? - ICICI Securities

Ujjivan Small Finance Bank - Top management change and lumpy provisioning concern to weigh on valuation in near term - ICICI Securities

Bharat Dynamics - Guided missile systems to drive orderbook and profit growth - ICICI Securities

Economy - Continued accommodation necessary despite inflationary risks: MPC minutes - ICICI Securities

InterGlobe Aviation - Annual report analysis: Liquidity management remains the mainstay in anticipation of traffic recovery - ICICI Securities

General insurance - Health remains dominant growth driver; Strong all-round performance by Bajaj Allianz - ICICI Securities

Earnings Wrap Q1FY22: Resilient earnings, limited impact of second Covid wave - ICICI Direct

Fine Organic Industries Results Review - In-line performance - HDFC Securities

Power Plus Sector Update - July witnessed strong ~10% generation growth - HDFC Securities

Information Technology Sector Update - 'Hit Refresh' - HDFC Securities

Maintain ADD on JK Cement - Healthy performance - HDFC Securities

Maintain BUY on Star Cement - Margin recovers on pricing gain - HDFC Securities

Maintain BUY on Sadbhav Engineering - Long road to recovery - HDFC Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020