Havells India (HAVL)
Others
Taking stock of off-balance sheet items – Part 2. We again compute cash flows for
the company adjusting for off-balance sheet items after fresh management inputs.
Takeaway: Both at the standalone and consol. levels, the company has not generated
free cash flow (after capex and adjusting for off-balance sheet items) in FY2011 and
FY2012. We have no discomfort with regard to the off-balance sheet items as they are
usual financial instruments used by companies; we want to highlight that cash flows of
the company are unlike a consumer business and hence, discount to pure-play consumer
valuations is justified. Maintain ADD as we see limited upside to our earning estimates.
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link: http://www.kotaksecurities.com/pdf/indiadaily/indiadaily18072012zl.pdf
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