by Anand Rathi
Havells India
In consolidation mode; Hold.
Havells India clocked (standalone) 3QFY15
revenue of Rs. 1250 crore(up 5% year on year), but 7% below our estimated Rs.
1350 Crore.
Despite a correction in commodity prices,
Havells did well to hold on to operational profitability. Consolidating its
inventory in the channels, its domestic sales would grow at a slower clip.
We believe that by adopting a cautious approach
to channel stocking, the company is very prudently averting a risk to its
balance sheet from volatile copper prices. At the ruling market price of Rs.
264, the stock trades at earnings and EV / EBIDTA multiples of respectively 24x
and 12.4x, discounting our FY17e figures.
With valuations mirroring those of FMCG
companies, we believe that the companys ability to absorb any shocks on the
earnings and cash-flow fronts is minuscule. Hence, we have maintained our Hold
recommendation, with a price objective of Rs 243.
For full report click on the links below:
Havells India
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For more details
Vidhi Mehta
vidhimehta@rathi.com
Assistant Manager - Wealth Management
Mobile: +91 99203 16932
Anand Rathi
11th Floor, Times Tower, Kamla City,
Senapati Bapat Marg Lower Parel,
Mumbai - 400 013.
India
Tele No: +91 022 4047 7000, Direct: +91 022 4001 7168, Fax No: +91 022 4047 7070 Website: www.rathi.com
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