Buy Havells India Ltd 9-12 Months CMP 465.85 Target 577
* Havells India’s (Havells) Q4FY20 results were weak as the March month (particularly last two weeks), which generally contributes ~25% to its Q4 revenues was impacted by COVID-19 led lockdown. Havells’ consolidated Q4FY20 revenue declined by 19.5% YoY, EBITDA declined by 22.3% YoY, while net profit was down by 10.7% YoY.
* We have based our valuation on P/E of 36xFY22E EPS. Given the sharp correction of ~28% in the last five months, we opine that near term growth concerns have been factored into the valuation of the stock. Thus, we recommend a BUY on Havells with a target price of Rs 577 per share.
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