IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, recommends ‘Buy’ on Havells India.
“Havells, a leading electrical consumer products company with a focus on brands, continues to see robust growth in all its segments. We rate the stock as BUY with a target of Rs 538. The stock trades at a reasonable 12x on our FY13 estimates”, IIFL said.
The company enjoys strong pricing power in all the segments it operates in except the commoditised cable and wire segment, report said.
The brokerage said “We expect 18% revenue CAGR in the next 2-3 years for domestic operations as we expect consumers to continue to up-scale to branded products led by rising incomes and increased disposable incomes in India”.
Margins improved in the past two years with restructuring efforts at Sylvania playing out; domestic margins too continue to be stable. With raw material prices easing in the past few months, we expect margins to have a positive bias in the near term, added reports.
The report was published by IIFL’s Institutional Equities Research desk.