Q3FY21 Result update - Havells India - ICICI Direct

Havells reported a strong all round performance with topline, PAT growth of 40% and 75% YoY which were better than our growth expectations of 15% and 8% respectively. Improved plant utilisation coupled with control on overhead expenses helped company to report 420 bps increase in EBITDA margin to 16%. The key highlights of the call are as follows 1) Price hikes in the range of 5%-15% into different product categories 2) Pre-buying activities during Dec'20 by trade in the fear of price hikes 3) Focus on capacity building of Lloyd (to cater export opportunities in the AC business) 4) Increased focus on taping rural and semi urban markets 5) Higher margin level likely to sustain. We believe, ECD and Lloyd business are likely to grow at a CAGR of 22% and 21% respectively for FY20-23E supported by increasing semi urban penetration along with changing consumer lifestyle (work from home). We revised our revenue, earning estimates upward by 11% and 14% respectively for FY23E.

Valuation & Outlook

We believe, Havells' plan to tap semi urban markets along with benefits of imports restriction on AC is likely to benefit company in long term. While we stay positive on the stock, we believe at current valuation most of the positives seems to be factored. We revised our rating from Buy to Hold with target price of Rs. 1255 (valuing 55xFY23E EPS).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_HavellsIndia_Q3FY21.pdf

Shares of HAVELLS INDIA LTD. was last trading in BSE at Rs.1132.2 as compared to the previous close of Rs. 1019.85. The total number of shares traded during the day was 688852 in over 28566 trades.

The stock hit an intraday high of Rs. 1147.5 and intraday low of 1051.8. The net turnover during the day was Rs. 767341683.

Source : Equity Bulls

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