COMPANY UPDATE

HOLD
TP: Rs 1,780 |  1%
HAVELLS INDIA | Consumer Durables | 05 June 2024

Annual report analysis: Product innovation driving growth

 Healthy FY24 performance; EBITDA margin expansion of 40bps YoY; Arshia Khosla
[email protected]
Lloyd turns profitable in Q4

 Rural market expansion and in-house manufacturing remain strategic

focus areas

 Maintain HOLD on increased in valuations; TP of Rs 1,780 valued at 53x

FY26E P/E

Healthy performance amid lacklustre demand: Throughout FY24, HAVL Key changes
exhibited healthy overall performance with revenue at Rs 186bn (+9.9% YoY). Target Rating
Infrastructure-led segments, buoyed by government's consistent emphasis on
infrastructure development, experienced strong growth trajectories. Conversely, B2C
segments encountered challenges in a subdued consumer demand landscape. Ticker/Price HAVL IN/Rs 1,793
Market cap US$ 13.7bn
Expanding access into rural market: With the aim of enhancing product Free float 41%
accessibility, the company expanded into emerging channels such as modern format 3M ADV US$ 26.4mn
retail, e-commerce, and quick commerce. Additionally, through the Rural Vistaar 52wk high/low Rs 1,985/Rs 1,233
programme, HAVL made efforts to establish a retail presence in towns with Promoter/FPI/DII 60%/23%/10%
Source: NSE | Price as of 5 Jun 2024
populations of less than 10,000, resulting in the addition of over 250 UTSAV stores
this year alone, bringing the total to over 600. Key financials
Y/E 31 Mar FY24A FY25E FY26E
Manufacturing focus: Manufacturing is a key strength for HAVL and its gross block Total revenue (Rs mn) 185,900 211,581 240,871
expanded at 15% CAGR over the past 10 years. This growth continued post the EBITDA (Rs mn) 18,426 23,647 28,854
acquisition of Lloyd as the company commissioned a new plant at Sri City, taking its Adj. net profit (Rs mn) 12,708 17,217 21,093
total air conditioner capacity to 1mn units per year. Capex for FY24 was ~Rs 7bn. Adj. EPS (Rs) 20.3 27.5 33.7
Consensus EPS (Rs) 20.3 27.3 33.2
Higher R&D investment: The company incurred R&D spend of Rs 2.06bn in FY24, Adj. ROAE (%) 18.1 21.4 22.4
rising at 18% CAGR over FY19-FY24. It has nearly tripled spends from Rs 790mn in Adj. P/E (x) 88.4 65.2 53.2
FY19 to keep pace with the changing consumer environment. EV/EBITDA (x) 61.0 47.5 38.9
Adj. EPS growth (%) 18.6 35.5 22.5
Source: Company, Bloomberg, BOBCAPS Research
Expansive distribution reach: HAVL's vast network includes around ~0.3mn
retailers and electricians each, with 18,000 dealers and 8,718 active vendors. This Stock performance
network boosts product availability across markets. Efforts to onboard new
HAVL NSE Nifty (Relative)
electricians led to a significant monthly increase of 5% in enrolments. 1,920
1,720
Maintain HOLD: Despite acknowledging HAVL's strengths such as its strong brand, 1,520
extensive distribution network, and growth potential, we remain cautious as its 1,320
1,120
valuations are high. As a result, we maintain HOLD. Our TP for HAVL remains Rs
920
1,780, with a target multiple of 53x FY26E P/E.
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Mar-24
Jun-24

Source: NSE

BOB Capital Markets Ltd is a wholly owned subsidiary of Bank of Baroda

Important disclosures and analyst certifications are provided at the end of the report.
HAVELLS INDIA

Growth trends
Fig 1 – Revenue growth Fig 2 – EBITDA growth

(Rs mn) Revenue Growth YoY (R) (%) (Rs mn) EBITDA Growth YoY (R) (%)
200,000 40 20,000 60
180,000 18,000 50
30
160,000 16,000
20 40
140,000 14,000
120,000 12,000 30
10
100,000 10,000 20
80,000 0 8,000 10
60,000 (10) 6,000
0
40,000 4,000
(20) (10)
20,000 2,000
0 (30) 0 (20)
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Source: Company, BOBCAPS Research Source: Company, BOBCAPS Research

Fig 3 – Adj. PAT trend Fig 4 – Working capital cycle

(Rs mn) Core Net Income Growth YoY (R) (%) (days) Inventory Receivables Payables Working Capital Cycle
14,000 50 200
12,000 40
150
10,000 30
100
8,000 20
6,000 10 50

4,000 0 0
2,000 (10)
(50)
0 (20)
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 (100) FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Source: Company, BOBCAPS Research Source: Company, BOBCAPS Research

Fig 5 – Return ratios Fig 6 – Segmental EBIT margins

(%) ROE ROIC (%) ECD Lighting Switchgears

Wires & Cables Lloyd
25 50

20 40

30
15
20
10
10
5
0
0
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 (10) FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Source: Company, BOBCAPS Research Source: Company, BOBCAPS Research

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Annual report takeaways

HAVL increased margins in FY24 through premiumisation efforts, cost efficiencies, and
the favourable impact of softer commodity prices. The company maintained a strong
financial position, remaining free of debt, and consistently delivering on its dividend
payout track record. This was underpinned by HAVL’s ability to generate strong cash
flows.

Fig 7 – Segmental offerings

Revenue share Revenue share
Category Offerings
FY24 (%) FY23 (%)
Switchgears Switches, domestic switchgears, industrial switchgears, capacitors, automation and control 12.08 12.6
Cables Power cable and flexible cables 33.9 32.8
Lighting and Fixtures Professional luminaires and consumer luminaires 8.8 9.5
Electrical Consumer Durables Fans, small domestic appliances, and water heaters 18.7 19.5
Lloyd Consumer Air conditioners, refrigerator, washing machine, televisions, and other domestic appliances 20.5 20.0
Others Motors, solar, pump, water purifiers and personal grooming products 5.8 5.6
Source: Company, BOBCAPS Research

Fig 8 – Segmental performance

Particulars (Rs mn) FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Switchgears 14,677 14,245 15,777 13,394 14,609 17,960 21,202 22,463
EBIT margin (%) 38 39 40 43 28 27 26 27
Cables 26,756 26,834 32,346 29,942 31,802 46,451 55,326 63,176
EBIT margin (%) 12 16 16 16 13 12 9 11
Lighting and Fixtures 10,498 11,774 13,092 10,253 11,140 13,916 16,145 16,398
EBIT margin (%) 24 28 28 32 19 19 15 15
Electrical Consumer Durables 14,199 15,696 20,964 20,054 23,770 30,739 32,982 34,825
EBIT margin (%) 25 27 26 29 17 15 13 11
Lloyd Consumer 0 14,141 18,556 15,903 16,888 22,732 33,949 38,103
EBIT margin (%) 0 19 17 11 4 (3) (7) (4)
Source: Company, BOBCAPS Research

Fig 9 – Geographical revenue breakup

Segment revenue by locations of customers (%)
Revenue - Domestic Market 97
Revenue - Overseas Market 3
Source: Company, BOBCAPS Research

Fig 10 – R&D spends

Particulars (Rs mn) FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Capital 31 37 113 160 52 63 151 259
Recurring 456 536 682 856 904 1,040 1,481 1,802
Total 487 573 794 1,016 956 1,103 1,632 2,061
as a % of revenue 0.8 0.7 0.8 1.1 0.9 0.8 1.0 1.1
Source: Company, BOBCAPS Research

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Fig 11 – Working capital management

Particulars (Rs mn) FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Account receivables 2,307 3,278 4,066 2,417 5,637 7,663 9,739 11,650
Receival able days 14 15 15 9 20 20 21 23
Inventory 9,453 16,330 19,190 18,719 26,199 29,681 37,086 34,086
Inventory days 56 73 70 72 91 78 80 67
Account Payables 6,335 16,400 15,598 14,138 15,971 23,800 26,432 26,919
Payable days 38 73 57 55 56 62 57 53
Cash conversion cycle 32 14 28 27 55 35 44 37
Source: Company, BOBCAPS Research

Fig 12 – Contingent liabilities

Particulars (Rs mn) FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Claims / suits filed against the Group not acknowledged as debts 57 153 66 65 69 71 68 66.7
Disputed tax liabilities in respect of pending litigations before appellate authorities 682 778 781 781 642 749 547 1102.5
Demand raised by Uttarakhand Power Corporation 10 10 10
Total 749 941 857 846 710 820 616 1169
Net worth 32,768 37,292 41,976 43,116 51,763 60,029 66,255 74,468
CL as a % of NW 2.3 2.5 2.0 2.0 1.4 1.4 0.9 1.6
Source: Company, BOBCAPS Research

Fig 13 – Auditors’ remuneration

Particulars (Rs mn) FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Auditor's remunerations 25 14 16 15 14 14 15 20
as a % of EBITDA 0.3 0.1 0.1 0.2 0.1 0.1 0.1 0.1
Source: Company, BOBCAPS Research

Fig 14 – Key personnel remuneration

Particulars (Rs mn) Designation Gross Salary Stock option Commission Total
Mr. Anil Rai Gupta CMD 86 219 305
Mr. Ameet Kumar Gupta WTD 34 88 122
Mr. Rajesh Kumar Gupta Group CFO 76 0 88 164
Mr. Siddhartha Pandit WTD 12 83 95
Total 686
as a % of employee expense 5.4
Source: Company, BOBCAPS Research

Manufacturing focus

Integrated manufacturing operations

 HAVL is investing in the latest technologies, mass production processes, and

robust operations which facilitate the production of reliable and high-quality
products.

 HAVL has long practised ‘Make in India’, manufacturing 90% of its products in-
house.

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 All manufacturing plants are unique, based on different technologies, but have fully
integrated manufacturing set-ups. Each plant is equipped with a high level of in-
house manufacturing, with all major components produced under the same roof.

 HAVL has procured automatic high-tech machines from Japan, Europe, and other
leading manufacturers across the globe.

 Capacity expansion was undertaken across categories, focusing on HAVL in-house

manufacturing. It has established capacities in the southern part of India, which is
helping the company enhance competitiveness and responsiveness, and aligns
with its ESG goals.

 The company currently has 15 manufacturing locations across nine locations in

India (Fig 15), and research and development centres in Noida, Bangalore and
Ghiloth (Rajasthan).

 AC plant operational at Sri City: Manufacturing operations at Sri City Plant are in
full swing, capable of producing up to 1mn AC units annually. This cutting-edge
facility incorporates seamless manufacturing processes and produces all essential
components in-house. With advanced machinery and processes supported by its
manufacturing execution systems (MES), the plant efficiently manages its
operations, with women employees skillfully managing major tasks.

New manufacturing plant at Tumkur

 HAVL is in the process of establishing a Cables plant at Tumkur in Karnataka. This

upcoming state-of-the-art factory signifies a significant investment in enhancing
manufacturing and supply chain capabilities in South India, indicating strategic
foresight and commitment to addressing increasing market demands. The
company expects to commence operations in FY25 and the greenfield
manufacturing plant will cover an area of 300k sq. ft. It will initially focus on
manufacturing Low Tension, Instrumentation and Control Cables under one roof,
and the plant aims to streamline operations and optimise production processes to
maximise output and effectively meet customer requirements.

New EMS manufacturing facility at Neemrana

 According to HAVL, its newly established Lighting and EMS Division provides a
holistic solution for all EMS requirements, encompassing PCB Design, PCB
Assembly, Product Assembly and Testing in a single facility for multiple business
units.

 The facility boasts the capability to manufacture innovative and smart lighting
products, encompassing a diverse range of LED drivers ranging from 3W to 250W.
It produces smart LED drivers equipped with advanced features like dimming and
tunable white, utilising technologies such as DALI (Digital Addressable Lighting
Interface), Bluetooth, Wi-Fi, GSM (Global System for Mobile Communications) and
GPRS (General Packet Radio Service).

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Fig 15 – HAVL’s manufacturing plants

Unit/Plant Products
Solan, Baddi, Himachal Pradesh Electrical wire accessories and switchgears
Haridwar, Uttarakhand Water purifiers and appliances
Faridabad, Haryana Switchgears
Sahibabad, Uttar Pradesh Switchgears and capacitors
Neemrana, Alwar, Rajasthan Motors and pumps; lighting & fixtures, water heaters and water coolers
Matsya Industrial Area, Alwar, Rajasthan Industrial and domestic cables
Haridwar, Uttarakhand Fans
Ghiloth, Alwar, Rajasthan Air conditioners and washing machines
Sri City, Andhra Pradesh Air conditioners
Source: Company, BOBCAPS Research

Balance sheet and cash flows

 HAVL ended the year with Rs 30.15bn in net cash.

 Capex was Rs 7.13bn in FY24, 25% higher than in FY23.

 Research and development spend for FY24 was Rs 2.06bn. The R&D team
strength is 713 and HAVL has four R&D centres across India.

 The cash conversion cycle stood at 37 days vs 44 in FY23.

Fig 16 – HAVL’s segmental capital expenditure

Segments (Rs mn) FY20 FY21 FY22 FY23 FY24
Switchgears 520 260 370 270 540
Cables 1,050 270 210 200 2,510
Lighting and fixtures 30 20 130 220 1,090
Electrical Consumer durables 1,360 360 700 420 650
Others 40 40 70 70 290
Lloyd Consumer 320 910 780 4,040 1,620
Common capital expenditure 390 250 280 490 420
Source: Company, BOBCAPS Research

Distribution and reach

 To strengthen its foothold in urban markets, HAVL introduced Urban Distribution,

an innovative channel expansion strategy. With the strategic emphasis on
improving product accessibility and availability in urban communities, this initiative
aims to enhance the point-of-sale experience, promote customer satisfaction, boost
employee productivity, and establish a dependable talent pipeline. Through Urban
Distribution, HAVL aims to equip in-store sales professionals with innovative sales
techniques and skills derived from detailed on-field analysis, incorporating both
technological advancements and human interventions.

 HAVL is broadening its distribution network consistently, actively engaging with

retailers through a network of ~0.25mn retailers, and ~18,000 dealers and servicing
~0.3mn lakh electricians. This extensive outreach further encompasses a total of
8,718 active vendors, reflecting HAVL's commitment to enhance the accessibility
and availability of its products across diverse markets.

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 Omni channel presence: With a keen eye on ensuring widespread accessibility to

its diverse range of products, HAVL has embarked on a strategic expansion
journey into emerging channels, notably modern retail format (MFR) and e-
commerce, alongside a foray into quick commerce.

Rural Vistaar programme

 HAVL has directed significant efforts towards rural markets through its Rural
Vistaar programme. This programme places particular emphasis on establishing
retail presence in towns with populations of below 10,000, a segment often
overlooked by traditional retail strategies.

 As part of this endeavour, HAVL is vigorously expanding UTSAV stores, adding

over 250 new outlets in the past year alone. This concerted effort has significantly
improved the company's retail footprint, with the total number of UTSAV stores now
exceeding 600.

Raw material sourcing

 Heightened volatility in commodity and foreign currency markets, exacerbated by

geopolitical tensions in diverse global regions, has disrupted both raw material
availability and supply chains.

 In FY24, the company significantly slashed its import reliance to under 15%. It
efficiently secured 44% of its needs from suppliers situated within a 100km radius,
thus mitigating freight expenses and transport vulnerabilities.

Fig 17 – Cost of raw material consumed

(Rs mn) FY24 FY23 YoY (%)
Copper 36,605 33,612 9
Aluminum 11,340 10,096 12
General plastic and Engineering plastic 4,635 4,380 6
Paints and chemicals 4,776 5,094 (6)
Steel 3,234 2,757 17
Packing materials 3,905 3,744 4
Other materials 34,241 33,495 2
Source: Company, BOBCAPS Research

Segmental performance

Switchgears

 The product portfolio under switchgear consists of domestic switchgears,

capacitors, switches and industrial switchgears.

 The switchgears segment grew ~6% in FY24.

 The segment contributes 12% of the total revenue.

 As the industry gradually moves towards smart and interconnected technologies, it

propels the shift toward smart homes. In the premium segment, HAVL further
enriched its Signia smart range by introducing the Grey finish, enabling a seamless
blend with home décor and, in turn, elevating interior ambience.

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HAVELLS INDIA

 HAVL remains optimistic that the increase in new real estate launches will have a
positive impact on the demand for switches and other electrical categories.

Cables

 Cables segment achieved revenue growth of 14.2%, maintaining double-digit

growth momentum driven by continued infrastructure-led demand for power cables
and flexible cables.

 The segment contributes 34% of HAVL’s total revenue.

 Power cables: As demand for power cables grows steadily, HAVL's expansion
was constrained by capacity limitations through the year. To address this issue, the
company is actively pursuing greenfield expansion of its power cables capacity in
Tumkur, Karnataka, expecting to commission the plant in early FY25.

 Flexible cables: During the year, HAVL intensified its efforts in flexible cables,
prioritising deeper penetration into semi-urban and rural markets while expanding
existing distribution channels. Leveraging a multi-brand strategy with HAVL,
Standard and REO, the company aimed to cater to diverse customer segments and
establish a distinct product hierarchy.

Electrical Consumer Durables

 The Electrical Consumer Durables (ECD) segment, consisting of fans, small

domestic appliances, and water heaters, encountered challenges at the onset of
FY24, as unseasonal rains disrupted summer consumer demand, resulting in
increased channel inventories accumulated during the BEE (Bureau of Energy
Efficiency) transition. Despite reduced consumer interest, heightened competition
characterised the fan industry. However, the latter half of the year saw signs of
growth as summer regained momentum.

 During the year HAVL concentrated on advancing its Brushless Direct Current
(BLDC) and Super premium BLDC+ range as part of its premiumisation strategy
across all fan segments. With nearly 40 models now in the BLDC range, HAVL
boasts the largest assortment of BLDC fans among its peers in our coverage
universe with distinct offerings, steadily increasing its BLDC share to over 20%.

Lighting

 In FY24, amid significant price erosion in LEDs within the lighting industry, HAVL
maintained its commitment to customer-centricity and product innovation across its
two business units, Consumer Lighting and Professional Lighting, consolidating its
market position and resilience.

 Professional Lighting: HAVL’s Professional Lighting business experienced robust

growth, solidifying the brand's reputation among diverse clientele, including leading
industries, modern workspaces, and various government sectors such as Railways,
NHAI, and Smart Cities. Notably, HAVL provided lighting solutions for prestigious
projects like the Shri Ram Mandir in Ayodhya and the Central Vista projects,
establishing itself as the preferred choice for national highway projects requiring
superior products and optical performance.

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 Consumer lighting: HAVL has solidified its position as a frontrunner in innovative

lighting within the consumer market by consistently introducing distinctive products.
Through a strategic series of differentiated product launches, HAVL has not only
demonstrated its commitment to innovation but also reinforced its reputation as a
pioneering brand in the consumer lighting industry. These innovative offerings have
allowed HAVL to stand out among competitors, capturing the attention of
consumers seeking cutting-edge lighting solutions that enhance their living spaces.

Lloyd

 Lloyd maintains its trajectory as a prominent player in the consumer durables

market, providing an extensive range of products including air conditioners,
washing machines, refrigerators, and televisions. Alongside achieving robust
revenue growth, Lloyd widened its profit margin throughout the year.

 Since the acquisition, Lloyd has focused on premiumisation through internal

manufacturing, innovative product development, increased brand investments, and
expansion into modern retail. With manufacturing facilities for air conditioners and
washing machines, Lloyd introduced unique feature-led products like Indoor Air
Quality (IAQ) and Intelli-Logic Air Conditioners in FY24.

 Lloyd boosted its presence in general trade and ventured into emerging channels
like organised retail and e-commerce. In organised retail, the focus was on
expanding counter share by investing in in-store demonstrators (ISDs). Also, Lloyd
introduced the Sales & Service Dealership (SSD) channel by establishing exclusive
Lloyd Gallery stores nationwide.

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Valuation methodology

HAVL has solidified its position as a formidable player within the consumer durables
sector, showcasing a diversified portfolio across multiple categories. This diversified
presence is underpinned by a robust balance sheet, allowing the company to concentrate
on specific business segments, as evidenced by its approach to Lloyd.

Management's positive outlook on the forthcoming quarters underscores its confidence in

a substantial resurgence within HAVL's core product line-up. This optimism stems from
anticipated market dynamics and internal strategic initiatives geared towards fortifying the
company's market standing and enhancing its competitive edge.

While we recognise the strengths of HAVL's core offerings, including its strong brand
recognition, expansive distribution network and inherent growth drivers, we remain
cautious due to the stock's expensive valuations. Therefore, we maintain our HOLD
rating on the stock.

Our TP for HAVL stands at Rs 1,780, with an unchanged target multiple of 53x FY26E
P/E. This valuation aligns with the stock's three-year average, reflecting a balanced
assessment of its growth prospects and market positioning.

Fig 18 – Key assumptions

Parameters FY23 FY24 FY25E FY26E
Revenue 169,107 185,900 211,581 240,871
EBITDA 15,991 18,426 23,647 28,854
EBITDA margin 9.5 9.9 11.2 12.0
EPS (Rs) 17.1 20.3 27.5 33.7
Source: Company, BOBCAPS Research

Key risks

Key upside risks to our estimates are:

 higher-than-anticipated demand, and

 faster margin improvement in Lloyd and ECD segments.

Key downside risks to our estimates are:

 inadequate pickup in consumer demand, and

 steep rise in raw material prices.

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Financials
Income Statement Per Share
Y/E 31 Mar (Rs mn) FY22A FY23A FY24A FY25E FY26E Y/E 31 Mar (Rs) FY22A FY23A FY24A FY25E FY26E
Total revenue 139,385 169,107 185,900 211,581 240,871 Reported EPS 19.1 17.1 20.3 27.5 33.7
EBITDA 17,604 15,991 18,426 23,647 28,854 Adjusted EPS 19.1 17.1 20.3 27.5 33.7
Depreciation 2,609 2,962 3,385 3,128 3,352 Dividend per share 7.5 7.5 8.5 8.5 8.5
EBIT 14,995 13,030 15,041 20,519 25,502 Book value per share 95.8 105.8 118.9 137.8 163.0
Net interest inc./(exp.) (534) (336) (457) (479) (493)
Other inc./(exp.) 1,604 1,777 2,490 2,614 2,745 Valuations Ratios
Exceptional items 0 0 0 0 0 Y/E 31 Mar (x) FY22A FY23A FY24A FY25E FY26E
EBT 16,066 14,471 17,074 22,655 27,754 EV/Sales 8.1 6.6 6.0 5.3 4.7
Income taxes 4,101 3,753 4,366 5,437 6,661 EV/EBITDA 63.8 70.2 61.0 47.5 38.9
Extraordinary items 0 0 0 0 0 Adjusted P/E 93.9 104.8 88.4 65.2 53.2
Min. int./Inc. from assoc. 0 0 0 0 0 P/BV 18.7 17.0 15.1 13.0 11.0
Reported net profit 11,965 10,717 12,708 17,217 21,093
Adjustments 0 0 0 0 0 DuPont Analysis
Adjusted net profit 11,965 10,717 12,708 17,217 21,093 Y/E 31 Mar (%) FY22A FY23A FY24A FY25E FY26E
Tax burden (Net profit/PBT) 74.5 74.1 74.4 76.0 76.0
Balance Sheet Interest burden (PBT/EBIT) 107.1 111.1 113.5 110.4 108.8
Y/E 31 Mar (Rs mn) FY22A FY23A FY24A FY25E FY26E EBIT margin (EBIT/Revenue) 10.8 7.7 8.1 9.7 10.6
Accounts payables 23,800 26,432 26,919 34,780 39,595 Asset turnover (Rev./Avg TA) 4.1 4.7 7.1 7.6 8.1
Other current liabilities 10,881 11,562 15,305 14,465 16,468 Leverage (Avg TA/Avg Equity) 0.6 0.6 0.4 0.3 0.3
Provisions 0 0 0 0 0 Adjusted ROAE 21.4 17.0 18.1 21.4 22.4
Debt funds 3,955 2,231 3,032 3,191 3,287
Other liabilities 6,567 5,095 4,604 5,240 5,966 Ratio Analysis
Equity capital 626 627 627 627 627 Y/E 31 Mar FY22A FY23A FY24A FY25E FY26E
Reserves & surplus 59,403 65,628 73,841 85,733 101,501 YoY growth (%)
Shareholders’ fund 60,029 66,255 74,468 86,360 102,127 Revenue 33.3 21.3 9.9 13.8 13.8
Total liab. and equities 105,232 111,574 124,327 144,037 167,443 EBITDA 12.0 (9.2) 15.2 28.3 22.0
Cash and cash eq. 27,014 18,702 30,382 37,433 50,160 Adjusted EPS 14.6 (10.4) 18.6 35.5 22.5
Accounts receivables 7,663 9,739 11,650 12,722 14,789 Profitability & Return ratios (%)
Inventories 29,681 37,086 34,086 42,598 46,330 EBITDA margin 12.6 9.5 9.9 11.2 12.0
Other current assets 1,708 5,135 2,879 1,419 1,615 EBIT margin 10.8 7.7 8.1 9.7 10.6
Investments 0 0 0 0 0 Adjusted profit margin 8.6 6.3 6.8 8.1 8.8
Net fixed assets 34,336 36,236 26,063 27,935 29,583 Adjusted ROAE 21.4 17.0 18.1 21.4 22.4
CWIP 572 1,634 2,969 3,379 3,847 ROCE 18.5 17.0 20.5 21.0 22.0
Intangible assets 0 0 0 0 0 Working capital days (days)
Deferred tax assets, net 0 0 0 0 0 Receivables 20 21 23 22 22
Other assets 4,258 3,042 16,299 18,551 21,119 Inventory 78 80 67 73 70
Total assets 105,232 111,574 124,327 144,037 167,443 Payables 62 57 53 60 60
Ratios (x)
Cash Flows Gross asset turnover 3.2 3.5 3.9 4.6 4.7
Y/E 31 Mar (Rs mn) FY22A FY23A FY24A FY25E FY26E Current ratio 1.8 1.8 1.8 1.9 2.0
Cash flow from operations 17,278 5,649 19,529 19,243 25,267 Net interest coverage ratio 28.1 38.8 32.9 42.9 51.7
Capital expenditures (2,528) (5,855) (7,591) (5,000) (5,000) Adjusted debt/equity 0.1 0.0 0.0 0.0 0.0
Change in investments 0 5,004 (10,371) 0 0 Source: Company, BOBCAPS Research | Note: TA = Total Assets
Other investing cash flows (5,067) 1,201 1,823 (2,026) (2,310)
Cash flow from investing (7,595) 350 (16,139) (7,026) (7,310)
Equities issued/Others 312 267 0 0 0
Debt raised/repaid 0 (4,563) (848) 159 96
Interest expenses 0 0 0 0 0
Dividends paid (5,783) (4,773) (4,488) (5,325) (5,325)
Other financing cash flows 0 0 0 0 0
Cash flow from financing (5,472) (9,069) (5,335) (5,166) (5,230)
Chg in cash & cash eq. 4,212 (3,070) (1,945) 7,052 12,727
Closing cash & cash eq. 27,014 18,702 30,382 37,433 50,160

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HAVELLS INDIA

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IF SUCH AN ACTION IS PROHIBITED BY APPLICABLE LAW.

Disclaimer
Name of the Research Entity: BOB Capital Markets Limited
Registered office Address: 1704, B Wing, Parinee Crescenzo, G Block, BKC, Bandra East, Mumbai 400051
SEBI Research Analyst Registration No: INH000000040 valid till 03 February 2025
Brand Name: BOBCAPS
Trade Name: www.barodaetrade.com
CIN: U65999MH1996GOI098009

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Investments in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

Recommendation scale: Recommendations and Absolute returns (%) over 12 months

BUY – Expected return >+15%
HOLD – Expected return from -6% to +15%
SELL – Expected return <-6%
Note: Recommendation structure changed with effect from 21 June 2021
Our recommendation scale does not factor in short-term stock price volatility related to market fluctuations. Thus, our recommendations may not always be strictly in
line with the recommendation scale as shown above.

Ratings and Target Price (3-year history): HAVELLS INDIA (HAVL IN)

30-Apr (H)
(Rs) HAVL stock price BOBCAPS Research
TP:Rs 1780
1,920

1,720 26-Nov (H)

BOBCAPS Research 21-Jun (B)
TP:Rs 1321 05-May (B) TP:Rs 1600
1,520
Vinod Chari
TP:Rs 1500
1,320

1,120

920
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
B – Buy, H – Hold, S – Sell, A – Add, R – Reduce

Analyst certification
The research analyst(s) authoring this report hereby certifies that (1) all of the views expressed in this research report accurately reflect his/her personal views about
the subject company or companies and its or their securities, and (2) no part of his/her compensation was, is, or will be, directly or indirectly, related to the specific
recommendation(s) or view(s) in this report. Analysts are not registered as research analysts by FINRA and are not associated persons of BOB Capital Markets
Limited (BOBCAPS).

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engaged in the businesses of stock broking, lending, asset management, life insurance, health insurance and wealth management, among others.
BOBCAPS’s activities have neither been suspended nor has it defaulted with any stock exchange authority with whom it has been registered in the last five years.
BOBCAPS has not been debarred from doing business by any stock exchange or SEBI or any other authority. No disciplinary action has been taken by any regulatory
authority against BOBCAPS affecting its equity research analysis activities.
BOBCAPS is also a SEBI-registered intermediary for the broking business having SEBI Single Registration Certificate No.: INZ000159332 dated 20 November 2017.
BOBCAPS prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives
of any companies that the analysts cover. Additionally, BOBCAPS prohibits its analysts and persons reporting to analysts from serving as an officer, director, or
advisory board member of any companies that the analysts cover.
Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions contrary to
the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations
expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of
interest. Additionally, other important information regarding our relationships with the company or companies that are the subject of this material is provided herein.
This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction We are not soliciting any action based on
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or any other activity that may affect the independence of its research reports.

EQUITY RESEARCH 12 05 June 2024

HAVELLS INDIA

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investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur. BOBCAPS does not
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EQUITY RESEARCH 13 05 June 2024