Incorporated in 1983, Havells India is a leading manufacturer of electrical components and power distribution equipment’s with products ranging from industrial and domestic circuit protection switchgears, cables, motors, pumps, fans, power capacitors, CFL lamps and luminaries. The company has 12 manufacturing plants spread across 7 locations in the country.
Valuations: The company is currently trading at a PE multiple of 45.4x/36.4x for FY18E/19E. The company’s robust product portfolio, strong brand recall and higher visibility of revenue growth should continue to support Havell’s premium valuations. We expect the company’s revenue and PAT to grow at a healthy CAGR of ~21%/~20% over FY17-19E. Hence, we recommend ‘BUY’ rating on the stock with a target price of Rs. 555 based on a target multiple of 41xFY19E EPS.
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