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Havells India
Havells India reported Q3 FY2011 result. Standalone revenue came in at Rs
7221.40mn as against Rs 5908.10mn YoY, up by 22%. Net profit rose 4% to
Rs 610.57mn as against Rs 588.69mn due to pressure on margins. The
EBITDA margin de-grew by (-7.7%) YoY to Rs 855.77mn on the back of weak
operating performance. EBITDA Margin stood at 11.9% as against 13.5%.
Sylvania demonstrated better margins on sequential basis. Sylvania reported
result in-line with our expectations. Top line has grew to Euro 125mn as
against Euro 115mn, up by 9% YoY. EBITDA margin stood at 5.3% as against
(-6.26%) YoY.
Sylvania Subsidiary on track after restructuring plans: Sylvania delivered improved
performance during the period. EBITDA margin expanded 5.3% YoY. Topline
rose by 9% mainly due to Euro decline by 12% during the comparable period ((6% net of
currency ie Euro vs US$). After adjusting for one-off tax payments in Brazil, PAT stood at
Euro (–0.3)mn. LATAM business grew by increased by 30% & Asia business was up by
60% YoY and European sales increased for the first time in the past four quarters. We
expect a further expansion in the geographic scope for Sylvania.
Strong domestic consumption trend to drive performance: HAVL’s will be the
biggest beneficiary of robust demand growth from the domestic market. Domestic revenue
has grew by 22% YoY. Over the last few years, all the segments where Havells India
is present have grown at a CAGR of 8%-30% and hence we except similar growth to
continue in all the segments.
Segment wise performance: Cable & wires segment rose 25% YoY. Lighting segment
revenues increased by 27% YoY. Consumer durable segment revenue have grown by
55%. Switch gears segment sales though remained flat 9% YoY. We believe that growth
for consumer business of Havells should remain strong largely due to its strong branding
efforts and introduction of new products.
Rebranding plans in United States: Havells India will sell lighting products in the US
under Havells, replacing its existing brand SLI and consolidating global branding strategy.
Management feels the rebranding in US will mark the company’s next big leap in the
US market. The company aims to quadruple its revenues in the country in the next three
years from $25 million for 2010.
Valuation: At current price of Rs 368, stock is trading at 19.5x and 12.8x P/E and
10.26x and 8.01x EV/EBITDA multiples for FY11E and FY12E respectively. We maintain
BUY recommendation with an target of Rs 470 per share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Havells India
Havells India reported Q3 FY2011 result. Standalone revenue came in at Rs
7221.40mn as against Rs 5908.10mn YoY, up by 22%. Net profit rose 4% to
Rs 610.57mn as against Rs 588.69mn due to pressure on margins. The
EBITDA margin de-grew by (-7.7%) YoY to Rs 855.77mn on the back of weak
operating performance. EBITDA Margin stood at 11.9% as against 13.5%.
Sylvania demonstrated better margins on sequential basis. Sylvania reported
result in-line with our expectations. Top line has grew to Euro 125mn as
against Euro 115mn, up by 9% YoY. EBITDA margin stood at 5.3% as against
(-6.26%) YoY.
Sylvania Subsidiary on track after restructuring plans: Sylvania delivered improved
performance during the period. EBITDA margin expanded 5.3% YoY. Topline
rose by 9% mainly due to Euro decline by 12% during the comparable period ((6% net of
currency ie Euro vs US$). After adjusting for one-off tax payments in Brazil, PAT stood at
Euro (–0.3)mn. LATAM business grew by increased by 30% & Asia business was up by
60% YoY and European sales increased for the first time in the past four quarters. We
expect a further expansion in the geographic scope for Sylvania.
biggest beneficiary of robust demand growth from the domestic market. Domestic revenue
has grew by 22% YoY. Over the last few years, all the segments where Havells India
is present have grown at a CAGR of 8%-30% and hence we except similar growth to
continue in all the segments.
Segment wise performance: Cable & wires segment rose 25% YoY. Lighting segment
revenues increased by 27% YoY. Consumer durable segment revenue have grown by
55%. Switch gears segment sales though remained flat 9% YoY. We believe that growth
for consumer business of Havells should remain strong largely due to its strong branding
efforts and introduction of new products.
Rebranding plans in United States: Havells India will sell lighting products in the US
under Havells, replacing its existing brand SLI and consolidating global branding strategy.
Management feels the rebranding in US will mark the company’s next big leap in the
US market. The company aims to quadruple its revenues in the country in the next three
years from $25 million for 2010.
Valuation: At current price of Rs 368, stock is trading at 19.5x and 12.8x P/E and
10.26x and 8.01x EV/EBITDA multiples for FY11E and FY12E respectively. We maintain
BUY recommendation with an target of Rs 470 per share.
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