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Havells Stock Correction Makes Risk-Reward Attractive, Citi Reiterates 'Buy' Rating
- •Citi maintained a 'buy' rating on Havells India with a price target of ’1,525 per share, indicating a 50% upside.
- •The recent 18% decline in Havells' stock price in September has made the risk-reward favorable for investors.
- •Citi projects a 21% revenue growth and 28% EBITDA growth for Havells in the September quarter, driven by strong wires and cables business and recovering consumer segments.
- •Profit growth is expected to outpace revenue growth in the medium term, with margins benefiting from operating leverage and reduced losses for Lloyd.
- •Despite a Q1 net profit decline of 15.4%, 28 out of 40 analysts recommend a 'buy' rating for Havells India stock.
Key Questions Answered
Citi maintained its "buy" rating on Havells India with a price target of ₹1,525 per share, representing an upside of 50% from its previous close. The brokerage noted that the recent correction has made the risk-reward ratio favourable for investors.
Citi projected that Havells India would achieve a 21% revenue growth and a 28% increase in EBITDA for the September quarter compared to the same period last year. This expected growth is driven by continued strength in the wires and cables business, a recovery in consumer-facing segments, and better margin profiles.
In July, Havells reported a 15.4% decline in net profit to ₹289 crore and an 8.8% drop in EBITDA to ₹474 crore, with margins contracting to 7.3% from 9.6% in the year-ago period. Meanwhile, its revenue increased by 19.8% to reach ₹6,614 crore compared to ₹5,437 crore previously.
