Buy Havells India; target of Rs 1500: ICICI Securities

Moneycontrol • 9 days ago

Original source

Key Investment Pillars

  • Broad-based growth: Havells delivered a strong performance in Q2FY27, with growth across categories supported by resilient consumer demand and price increases.
  • C&W segment growth: The C&W segment recorded double-digit volume growth, although contribution margins were impacted by aluminium price volatility.
  • Switchgears growth: The switchgears segment reported revenue and EBIT growth of 31.3%/49.4% YoY, supported by a recovery in underlying demand and market-share gains.
  • Renewables expansion: Havells continues to develop renewables as a consumer-facing business, with a brand- and distribution-led strategy.

Thesis Validation Checklist

  • Consumer demand: Steady consumer demand despite the inflationary environment.
  • Price hikes: Additional price hikes of ~5-7% may be required in selected categories during Q3FY27 to address input-cost inflation.
  • Volume growth: Double-digit volume growth in switchgears and close to double-digit growth in C&W.
  • Contribution margins: Normalisation of contribution margins in C&W and improvement in switchgears.
  • Renewables growth: Continued growth in renewables through a branded, distribution-led business. Watch for these signals over the next ~12 months to see if the thesis is playing out.