Brokers' call: Consumer spend to light up Havells, says CLSA

CLSA has initiated coverage on Havells with a 'Buy' rating with a target price of 700. Havells, a key player in the domestic electricals business, will see its earnings grow at a 27% car over FY12-14, led primarily by strong growth in India.

Havells' key domestic-end markets benefit from growth drivers arising from rising consumer spend as well as housing construction. Its competitive advantages in distribution and the rising strength of its brand give it an edge.

While Havells' stock has appreciated 67% over the past year on strong earnings growth despite currency headwinds, continuing strength in earnings from domestic growth and a modest turnaround in Sylvania will help Havells deliver a 27% eassrnings CAGR over FY12-14.