Target: ₹1,852
CMP: ₹1,604.45
Havells India’s posted robust Q4 results. Consolidated revenue grew 20.2 per cent y-o-y to ₹6,540 crore, led by strong performances by cables and wires, where revenue grew 21 per cent y-o-y, with wire restocking and power cable growth supported by capacity expansion. Lloyd’s growth momentum continued as revenue rose a robust 39 per cent y-o-y, owing to healthy primary sales.
ECD saw moderate 10 per cent y-o-y growth, indicating a mild start to the summer season. Switchgears reported a 6 per cent y-o-y increase, led by growth in project business, while the industrial sector remained soft. While gross margins contracted 65bps, the operating leverage led to an 11.6 per cent EBITDA margin.
Staff cost grew 13 per cent y-o-y and other expenses, 19 per cent y-o-y. PAT was 15.7 per cent y-o-y higher at ₹517 crore, led by higher EBITDA and a 14 per cent y-o-y decline in depreciation. A capex of about ₹2,000 crore has also been planned for two years, mainly in cables and refrigerators. Factoring in strong Q4 operating performance, we marginally raise our FY26 revenue and FY27e revenue/EBITDA/PAT. We model 15/26 per cent revenue/net profit CAGRs over FY25-27, which would result in the RoE expanding to 21.5 per cent, from 18.7 per cent.
We maintain our Buy rating, with a revised TP of ₹1,852 (earlier ₹1,949), 50x FY27 EPS of ₹43.5.
Published on April 24, 2025
