Expect a further cut of 10-15% in Havells: Ambareesh Baliga

In a chat with ET Now, market expert Ambareesh Baliga, shares his views on Havells. Excerpts:

ET Now: Havells have said that there are some issues with regard to meeting the sales guidance - they have cut it from 12% to 14% versus the earlier 17% to 20%. They are also talking about the possibility of pension liabilities in the second half which may impact reported profits. What do you make of these two key things and the kind of damage we have seen in the stock already?

Ambareesh Baliga: The issue with stocks like these is that over the last two years, they have actually built up a lot of expectations from analysts as well as investors and when this sort of a news comes in, it comes in as a shocker, because of which you are seeing this cut. This could deepen further because people were not expecting this sort of a news from Havells.

ET Now: What do you think in terms of a price level - how much would the stock get dented by in lieu of this revision in revenue?

Ambareesh Baliga: It is possible that we could see another 10% to 15% cut. This is just the beginning because once this sinks in, you could see a further cut.

ET Now: Do you think the stock would settle at roughly 250 odd in the selling?

Ambareesh Baliga: May not be 250, but possibly closer to about 275 or so. Those who have missed on the way up could actually come and start buying at those lower levels because in this rally - not just across Havells but across various other stocks - people have missed out. Thus, people sitting on the sidelines could actually come in to support at those lower levels.