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Accumulate Havells India Ltd. target Rs 595 : Nirmal Bang Securities

Accumulate Havells India for a price target of Rs 595.

Last Updated: Jan 23, 2018, 10.21 AM IST
Nirmal Bang Securities has Accumulate on Havells India Ltd. with a target price of Rs 595.
The current market price of Havells India Ltd. is Rs 572.85. Time period given by analyst is Long Term when Havells India Ltd. price can reach defined target. .
Havells India (HIL) posted 11% top-line growth (14% growth adjusted for excise duty impact) in its core electricals portfolio at Rs 1670 crore while, inclusive of Lloyd’s sales amounting to Rs 290 crore, overall revenues stood at Rs 1960 crore in 3QFY18. Nirmal Bang said, “The top-line was 7% below our estimate of Rs 2110 crore, but in line with consensus estimate.”
Top-line growth was driven by lighting segment (up 21% YoY) and electrical consumer durable (ECD) segment (up 26% YoY). Gross margin rose 40bps YoY to 39.7% while EBITDA margin was up 60bps YoY at 13.3%. EBITDA grew 37% YoY to Rs260 crore aided by healthy profitability in ECD and cable segments. PAT rose 27% YoY to Rs 190 crore, in line with our estimate but 15% above consensus estimate. In the core electrical portfolio, the management aims to sustain 14%-15% EBITDA margin profile.
“We have marginally tweaked our earnings estimates and rolled forward our valuation to FY20E financials. We have valued HIL at 36x FY20E earnings with a revised target price of Rs 595 (Rs552 earlier) and retained Accumulate rating on it,” Nirmal Bang Securities said.
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