Buy Havells India, target Rs 650: JM Financial
JM Financial has a buy call on Havells India Ltd. with a target price of Rs 650.0 . The current market price of Havells India Ltd. is Rs 541.0 Time period given by analyst is year when Havells India Ltd. price can reach defined target. Havells India Ltd., incorporated in 1983, is a largecap company with a market cap of Rs 33300.18 crore.
Investment rationale by JM Financial
In its FY18 Annual Report, Havells has strongly focused on the role IT has played across the company (250-member team working on 200+ projects in sales and R&D) to boost not only its strategy to penetrate the home segment deeper but also its engagement with dealers and channel partners. In FY18, it forayed into the white goods segment by acquiring the consumer durables business of Lloyd (reported strong margin performance) and expanded its existing consumer durables basket by launching water purifiers and personal grooming products. Havells continues to generate significant free cash flows (INR 10bn in FY18 vs. INR 5.8bn in FY17, adjusted for the Lloyd acquisition). We continue to remain bullish with a Mar’19 TP of INR 650 (40x FY20E EPS). We maintain BUY.
Investment rationale by JM Financial
In its FY18 Annual Report, Havells has strongly focused on the role IT has played across the company (250-member team working on 200+ projects in sales and R&D) to boost not only its strategy to penetrate the home segment deeper but also its engagement with dealers and channel partners. In FY18, it forayed into the white goods segment by acquiring the consumer durables business of Lloyd (reported strong margin performance) and expanded its existing consumer durables basket by launching water purifiers and personal grooming products. Havells continues to generate significant free cash flows (INR 10bn in FY18 vs. INR 5.8bn in FY17, adjusted for the Lloyd acquisition). We continue to remain bullish with a Mar’19 TP of INR 650 (40x FY20E EPS). We maintain BUY.
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