 "Havells India")
Shares of Havells India hit an all-time high of Rs 1,513.90, gaining 3 per cent on the BSE in Wednesday’s's intraday trade, extending its Tuesday's 3 per cent upmove on anticipation of better January-March quarter (Q4) demand for fans and air-conditioners (ACs).
With today's move, the stock surpassed its previous high of Rs 1,504.45 touched on October 18, 2021. Thus far in the month of February 2024, the market price of Havells India has surged 17 per cent. A sharp run-up in the stock price has pushed the market captialiation of Havells India towards Rs 1 trillion. The company's market capitalisation hit Rs 94,874 crore in the intraday trade today.
Havells India Ltd is a leading FMEG (Fast moving electrical goods) and a consumer durable company, with a presence across 60 countries. Its product range includes Industrial & Domestic electrical goods and consumer durables. Havells owns prestigious brands like Havells, Lloyd, Crabtree, Standard and Reo.
Financially, Havells had reported a weak October-December (Q3) print as feeble consumer sentiment and sustained investment in strategic initiatives (branding, distribution, capability) more than offset the robust momentum seen in the business-to-business (B2B) portfolio.
While urban demand has remained steady, demand from Class B/C towns has been sluggish. However, with early signs of demand recovery visible (supported by abating inflation) and the expectation of a good upcoming summer season (on a low base), HDFC Securities expects improvement both in revenue and profitability from here.
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Through its multi-product portfolio serving a diverse consumer base, the brokerage firm believes Havells is well placed to benefit from the current uptick seen in private/government capex and real-estate tailwind, given it has a diverse product portfolio covering over 70 per cent of household electric sockets.
"It is among the top 3 players in most product categories; its Lloyd portfolio is gaining traction; and it has an innovation focus and its go-to-market strategy (GTM) expansion to become more omnipresent," the brokerage firm said. The stock, however, is trading above the brokerage firm's target price of Rs 1,500 per share.
Global brokerage firm Goldman Sachs has upgraded the rating for the consumer electronics company to 'Buy' from 'Neutral' and has increased the price target to Rs 1,660 from Rs 1,540.
Goldman Sachs views Havells' cost-control initiatives positively, including the strategic move to shift outsourcing to its manufacturing facilities. The company's continued investments in brands and human resources, even during a downturn, are seen as favourable.
Analysts at BOB Capital Markets, meanwhile, said they remain positive on Havells' medium-term performance given its strong presence in the consumer durables sector and improving industry dynamics.
"The company indicated a positive demand outlook for the upcoming summer season and expects to earn better margins in Q4FY24 compared to those seen in Q3 as it expects a pickup in demand for fans and air conditioners. Cables, wires and switches are also expected to do well on the back of rising infrastructure spending," the brokerage firm said in its result update report, maintaining 'Buy' rating and a target price of Rs 1,600 per share.
