BSE: 517374
NSE: HAVELLS
ISIN: INE176B01034
SECTOR: Electric Equipment
Must check out a detailed analysis of Havells India Ltd.NSE: HAVELLS
ISIN: INE176B01034
SECTOR: Electric Equipment
Here is the detailed 2018-19 Annual Result analysis of Havells India Ltd. You can read more below:
About the company
Havells India Limited is an FMEG (Fast Moving Electrical Goods) Company. It is basically a holding company. The Company is involved in manufacturing Switch-gears, Cable, Lighting and Fixtures, and Electric Consumer Durable. It has a simple strategy to acquire and grow, which is the key to its success.It is ranked 11th ‘Most Respected Company’ out of the top 100 companies in India- Business World.
Our 2018-19 estimates for revenue/profit
During the earlier analysis of Havells India, we had estimated that the revenue of the company may grow by 15% to reach 94,993.11 Mn; while revenue will grow by 10% to reach 7,837.72 Mn.
The estimates were given purely on the past performance of the company and based on overall sector growth prediction.
We estimated that the EPS will be 317.864.
We estimated that the EPS will be 317.864.
2018-19 Estimated Revenue: 94,993.11 Mn (15%)
2018-19 Estimated Net Profit: 7,837.72 Mn (10%)
Estimated EPS: 12.5
Estimated EPS: 12.5
What is the actual performance?
Below is the actual performance of the company:
We can see that the actual growth in both revenue and profit was more than expected.
The actual EPS stands 12.6, which is 0.8% more than our estimate.
| 2018 | 2019 | % Growth | |
| Revenue (mn) | 82,602.70 | 100,576.20 | 21.76% |
| Net Profit (mn) | 7,125.20 | 7,915.20 | 11.09% |
We can see that the actual growth in both revenue and profit was more than expected.
The actual EPS stands 12.6, which is 0.8% more than our estimate.
Forecast/estimates for 2019-20
For 2019-20, below are our estimates.
2019-20 Expected Revenue: 115,662.63 Mn (15% growth)
2019-20 Expected Revenue: 115,662.63 Mn (15% growth)
2019-20 Expected Net Profit: 8,706.72 Mn (10% growth)
2019-20 Estimated EPS: 13.93
* The estimated numbers may change based on 2019-20
quarterly results. Please refer quarterly result for updates.
Other company/sector updates
- Govt's focus on 100% electrification of rural areas will create demand for this sector. With more electricity in villages, people is more likely to buy electric wires, switches and appliances.
- Recent product lines like Water Purifiers, Personal Grooming, small appliances and water heaters is capturing market share. This is a new segment for Havells India and if it becomes successful in capturing market share in electrical appliances, it would add to both top-line and bottom-line growth of the business.
- Lloyd business is successfully and fully integrated. The key success of any acquisition depends on the brand management and maintain a healthy integration. It seems Havells india has successfully done that with its Lloyd acquisition.
- Internet penetration is creating brand awareness around Havell’s quality. With internet even people at remote locations and villages are getting to know about brand names and this is bound to create benefit for Havells India.
- Management is working on increasing reach to 3000 towns (currently 1000) in 2019-20. Management focus on tier 2 and 3 cities and rural area will strengthen the revenue stream and hence profit.
- Company plans to increase spend on research activities to 2% of total revenue (currently 0.79%). This is a very important decision. Any company investing in research is most likely to produce proprietary products and hence a moat for its business.
- Recent product lines like Water Purifiers, Personal Grooming, small appliances and water heaters is capturing market share. This is a new segment for Havells India and if it becomes successful in capturing market share in electrical appliances, it would add to both top-line and bottom-line growth of the business.
- Lloyd business is successfully and fully integrated. The key success of any acquisition depends on the brand management and maintain a healthy integration. It seems Havells india has successfully done that with its Lloyd acquisition.
- Internet penetration is creating brand awareness around Havell’s quality. With internet even people at remote locations and villages are getting to know about brand names and this is bound to create benefit for Havells India.
- Management is working on increasing reach to 3000 towns (currently 1000) in 2019-20. Management focus on tier 2 and 3 cities and rural area will strengthen the revenue stream and hence profit.
- Company plans to increase spend on research activities to 2% of total revenue (currently 0.79%). This is a very important decision. Any company investing in research is most likely to produce proprietary products and hence a moat for its business.
What next for the investors?
This share is very good for long term investments. If you are looking for 1 or 2 years, please do not invest in a volatile market. The current slowdown in economy is affecting business of most of the sectors, so only invest if you can hold it for around 4-5 years.All those investors who has invested around the price suggested in my detailed video, given below , can continue to hold and accumulate more on dips.
