Credit Suisse maintains neutral on Havells India, cuts target price to Rs 615

Credit Suisse has maintained neutral rating on Havells India in the long term and cut target price to Rs 615 from Rs 700. The stock ended down 2.8% at Rs 599.90 on Wednesday while the BSE Sensex closed 208.43 points (0.50%) down at 41,115.38.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 2232.65 crore, down -17.82% from last quarter sales of Rs 2716.88 crore and up 1.76% from last year same quarter sales of Rs 2194.13 crore. The company has reported net profit after tax of Rs 179.51 crore in the latest quarter.


The company’s top management includes Dr.Adarsh Kishore, Mr.Ameet Kumar Gupta, Mr.Anil Rai Gupta, Mr.Jalaj Ashwin Dani, Mr.Puneet Bhatia, Mr.Rajesh Kumar Gupta, Mr.Siddhartha Pandit, Mr.Surender Kumar Tuteja, Mr.Surjit Kumar Gupta, Mr.T V Mohandas Pai, Mr.Upendra Kumar Sinha, Mr.Vellayan Subbiah, Mr.Vijay Kumar Chopra, Mrs.Pratima Ram. Company has S R Batliboi & Co. LLP as its auditors. As on 31-12-2019, the company has a total of 625,802,834 shares outstanding.

Investment Rationale

Havells' third quarter earnings were significantly below estimates with revenues declining 10% and profit before tax falling 20%, said Credit Suisse. The brokerage has cut FY20-FY21earnings estimates by 8-12%. It expects the near-term weakness to continue as cuts in government expenditure will put further pressure on the cables and lights business, while the real estate slowdown will impact switchgear.