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• Leader in India’s electrical consumer durable products space
in sub 5000 rs product category, market leader in
switchgear (20% share) and fan segment (13% share).
• Recently launched a water heater product line (an Rs8bn
market in India). Plans to launch other consumer appliances
– irons, food processors, induction heaters and toasters.
• HVEL completed turnaround of Sylvania – Sylvania EBITDA
margins were 7.8% in Q4FY11 compared to EBITDA loss in
FY10. Havells has now launched new products in Europe
such as CMI lamps and switchgear (under Sylvania brand).
• HVEL also been able to grow its revenue in Latin America
over the previous three quarters.
• New product launches to contribute meaningfully to
revenue growth during FY12E. Revenue growth likely to be
18-20%.
• Shareholding: promoters – 62%
• Valuation: DCF using VCAM tool (assume WACC of
13.19%). 15x FY13E EPS for domestic business and Rs 65
for Sylvania.
Great track record of execution – has been fastest
growing electrical consumer durable company in India.
FY06-FY11 revenue/PAT CAGR of 23%/28%.
• Strong distribution network and demonstrated ability
to launch and gain market share in new products
• Direct dealers derive 50%+ revenue from
Havells.
• Have been able to convert mono-product dealers
into multi product dealers.
• Supported dealers during volatile raw material
environment.
• Gained market share in fans, lighting and
domestic switchgear.
• Focus on distribution and consumer oriented
marketing == high ROE
• India business has 30%+ ROE.
• Even wires and cables has consistently generated
30%+ pre tax ROIC.
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