Published on 11/01/2018 2:52:05 PM | Source: Motilal Oswal Securities Ltd
Buy Havells India Ltd For Target Rs.620.00 - Motilal Oswal
Strong prospects across product categories
We recently met Havells India’s (HAVL) senior management at its analyst meet. Key takeaways:
Target to be in top 5 (preferably top 3) across categories
* HAVL remains focused on a) non-residential/B2B market and projects, b) mass premium market in electricals, c) increasing channel reach/width and d) expanding share in west and south India, where it has historically had a weak presence.
* Distribution channel: For HAVL, dealers form a key part of the distribution network. The company intends to continue expanding the width/depth of its distribution channel and also its omni-channel presence.
* The company targets to establish a meaningful presence across categories (to be among top 5, preferably top 3) to ensure industry leading growth and market share expansion across segments.
* Focus on organic growth: It does not plan any big-bang acquisitions, but will focus on India and bridging product gaps. Growth driven by expansion into new product categories; targets to more than double sales in 4-5 years
* 1996: Started with the cable/wires business as it wanted to grab the available opportunities then; today, the share of electricals is 40% of sales
* 2000: Acquired STANDARD switchgear, which has a strong presence in south India. Revitalized the brand in 2013, and plans to take the business size to INR10b from INR4b currently
* 2003: Launched fans – first switchgear/cable company to do so. Now all peer companies have a presence in this segment
* 2004: Decided to set up a large-scale integrated manufacturing facility in Baddi, Himachal Pradesh; now has 12 manufacturing plants across India
* 2005: Premium fans launched; not present in economy fans (40% of the market); focus remains only on superior products
* 2006: Channel financing with Yes bank; innovative three-way financing, which is off balance sheet and marks a tectonic shift for the company
* 2007: National advertising – sponsored the T20 WC; gained significant voice share; first electricals company to do this
* 2007: Uniform discount policy across channels and dealers, irrespective of the size; this helped improve margins
* 2007: Sylvania was taken over – first acquisition outside of India; it was sold in 2015 though
* 2012: Entered water heaters; thereafter forayed into appliances in 2013 and pumps in 2017; acquired Lloyd Electric; water purifiers to be launched soon.
To Read Complete Report & Disclaimer Click Here
For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html SEBI Registration number is INH000000412
Above views are of the author and not of the website kindly read disclaimer