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Dolat Capital Report
Havells India Ltd.'s Q4 FY24 revenue was in-line, while Ebitda and profit after tax were higher than estimates. Strong growth in fans, 18% volume growth in cables and wires despite capacity constraints, decent growth in switchgear on high base, and improvement in Lloyd's profitability, was encouraging.
Mere 6% growth in LLoyd in Q4 was a dampener, however we expect strong growth in Q1 FY25 given healthy offtake in April plus demand from North is yet to pick up. Despite input cost pressures, we expect better operating leverage, price increase and cost control to support Ebitda margins.
Management alluded growth in core business to be better than past two-three years. Positive triggers are-
strong summer demand trends,
lighting prices bottoming out,
capacity addition in cables,
profitability in Lloyd and
early signs of pickup in real estate.
Hence, we have raised our target multiple to 50 times (in-line with the last three year average) and upward revised our FY25E/26E EPS estimates by 3/7% to Rs 27/35 respectively Maintain ‘Accumulate' rating with revised target price of Rs 1,771 (Buy on Dips).
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