Havells India - Switch to good times BUY ::EMkay

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Havells India Ltd

Switch to good times

BUY

CMP: Rs 384                                       Target Price: Rs 470

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n     Domestic business revenues to grow by 15% CAGR over FY11-13E led by enhanced capacities, new product launches and increased penetration

n     FY12E to reflect full impact of restructuring initiatives and subsequent turnaround in Sylvania – expect profit to jump 280% to € 8.4mn in FY12E

n     Improvement in operational performance to drive return ratios. Expect FY13E RONW and ROCE to advance to 32% and 28% respectively

n     Valued Havells at 10.5x FY13E EV/EBIDTA, given its improved financials and better earnings visibility over the next 2 years. Initiate coverage with a BUY and TP of Rs 470