Havells is setting-up a new facility at Ghiloth, Neemrana, Rajasthan to manufacture consumer durables, as per the BSE filing. The total estimated cost for the project is Rs360cr (ex-land cost, as the company already owns the land), spread over a period of 3 years. The total investment will be funded through a mix of internal accruals and borrowings. Company expects to start the production from Q3FY19E.
For this investment, the company will be entitled to investment subsidy under the M-SIPS (Modified Special Incentive Package Scheme) introduced by MEITY and also for various tax/ levies and other benefits from the State Government of Rajasthan.
Havells' FY17 revenue mix comprised of - cables 39%, switchgears 23%, electrical consumer durables 23% and lighting & fixtures 16%. It enjoyed 28% market share in the domestic switchgear segment. Acquisition of LEEL has helped it foray into washing machines, room ACs and refrigerators. The merger synergies post LEEL acquisition is expected to drive sales growth. Having achieved no.2 volume share in room AC market, Havells eyes penetration in growing Flat panel display (FPD) TV and washing machines markets. Its manufacturing stronghold (93% in-house production), increasing presence in B2B business (B2C for lighting) and focus on new products for mass premium segment bodes well for growth.
Havells India Ltd ended at Rs579.95, up by Rs 4.4 or 0.76% from its previous closing of Rs575.55 on the BSE.