Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key Takeaways
Revenue to grow at 10-11%; new products to contribute significantly
The management maintained its consolidated revenue growth guidance of 10-11%
for FY12. We expect consolidated revenue to grow 13% in FY12 and 12% in FY13.
For 1QFY12, Havells India (HAVL) reported standalone revenue of INR8b (up 16%
YoY), driven by strong growth in all segments except switchgear. Switchgear revenue
was impacted by an overhang of a drop in exports of MCP to the UK.
Sylvania reported flattish revenue in 1QFY12 impacted by unfavorable currency
movement in the American region. Europe continues to de-grow (-3% YoY in
1QFY12). The management expects significant growth from LATAM region. We expect
Sylvania to post 6% revenue growth in Euro terms in FY12.
HAVL is in the process of broadening its product portfolio of consumer durables. It
introduced water heaters in 1QFY12, which boosted consumer durables sales
(INR400m of sales of water heaters in 1QFY12 v/s nil in 1QFY11). Launch of further
new products such as geysers, motors, juicers, etc is in the pipeline. Management
expects significant growth from new products in FY12 onwards. In the domestic
market (Standalone business) we expect revenues to grow by 17% YoY in FY12.
Targets exponential growth in switchgear business
The company is targeting to double its revenue from the switchgear business with
its foray into the global market. It is in the process of launching its switchgear in the
UK market and is planning to set its footprint in Chinese markets, as well.
HAVL has a strong foothold in the domestic market, where it competes with
multinationals like Schneider and Legrand. It currently commands 20% market share.
We believe that HAVL is well positioned to extend its strong branding and long
experience in the low voltage switchgear segment to newer geographies.
Current level of margins sustainable in domestic business; turnaround of
Sylvania to provide significant boost to profitability at consolidated level
The management reiterated its earlier expectation of sustaining margins at FY11
levels of 11-12% in the domestic business.
The management expects ~8% EBITDA margin for Sylvania in FY12. Sylvania turned
around from a loss-making unit to a profit-making business in FY11. In 1QFY12
EBITDA margin jumped 190bp YoY to 7.3% and was broadly at 4QFY11 levels.
Valuation and view
Our EPS estimates are INR29.2 (up 33%) for FY12 and INR35.2 (up 21%) for FY13.
We estimate consolidated revenue CAGR at 13% and PAT CAGR at 26% over FY11-
13. The stock trades at 11x FY12E and 9x FY13E consolidated EPS. Buy with a
target price of INR491 (14x FY13E EPS).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key Takeaways
Revenue to grow at 10-11%; new products to contribute significantly
The management maintained its consolidated revenue growth guidance of 10-11%
for FY12. We expect consolidated revenue to grow 13% in FY12 and 12% in FY13.
For 1QFY12, Havells India (HAVL) reported standalone revenue of INR8b (up 16%
YoY), driven by strong growth in all segments except switchgear. Switchgear revenue
was impacted by an overhang of a drop in exports of MCP to the UK.
Sylvania reported flattish revenue in 1QFY12 impacted by unfavorable currency
movement in the American region. Europe continues to de-grow (-3% YoY in
1QFY12). The management expects significant growth from LATAM region. We expect
Sylvania to post 6% revenue growth in Euro terms in FY12.
HAVL is in the process of broadening its product portfolio of consumer durables. It
introduced water heaters in 1QFY12, which boosted consumer durables sales
(INR400m of sales of water heaters in 1QFY12 v/s nil in 1QFY11). Launch of further
new products such as geysers, motors, juicers, etc is in the pipeline. Management
expects significant growth from new products in FY12 onwards. In the domestic
market (Standalone business) we expect revenues to grow by 17% YoY in FY12.
Targets exponential growth in switchgear business
The company is targeting to double its revenue from the switchgear business with
its foray into the global market. It is in the process of launching its switchgear in the
UK market and is planning to set its footprint in Chinese markets, as well.
HAVL has a strong foothold in the domestic market, where it competes with
multinationals like Schneider and Legrand. It currently commands 20% market share.
We believe that HAVL is well positioned to extend its strong branding and long
experience in the low voltage switchgear segment to newer geographies.
Current level of margins sustainable in domestic business; turnaround of
Sylvania to provide significant boost to profitability at consolidated level
The management reiterated its earlier expectation of sustaining margins at FY11
levels of 11-12% in the domestic business.
The management expects ~8% EBITDA margin for Sylvania in FY12. Sylvania turned
around from a loss-making unit to a profit-making business in FY11. In 1QFY12
EBITDA margin jumped 190bp YoY to 7.3% and was broadly at 4QFY11 levels.
Valuation and view
Our EPS estimates are INR29.2 (up 33%) for FY12 and INR35.2 (up 21%) for FY13.
We estimate consolidated revenue CAGR at 13% and PAT CAGR at 26% over FY11-
13. The stock trades at 11x FY12E and 9x FY13E consolidated EPS. Buy with a
target price of INR491 (14x FY13E EPS).
No comments:
Post a Comment