On Friday, CLSA upgraded Havells India (NS:HVEL) (HAVL:IN), a leading electrical goods company, from Hold to Outperform, raising the price target to INR2,120.00 from the previous INR1,860.00. This revision reflects the firm's positive outlook on the company's potential growth, driven by its strong presence in the business-to-consumer (B2C) segment and anticipated benefits from the real estate sector and consumer sentiment.
The analyst from CLSA highlighted that Havells India, with 70% of its revenue excluding the large appliances division Lloyds (LON:LLOY) coming from the B2C segment, is well-positioned to capitalize on the completion of real estate projects and an improvement in consumer sentiment. The company's core product segments, including wires, switches, electricals such as fans, and lighting, are expected to see increased demand.
In addition to the consumer-driven growth, Havells is also poised to benefit from an increase in infrastructure spending. This is likely to boost the company's cables and switch gears segments, among others. Furthermore, the company's recent capacity expansion in the cable division is seen as a positive development by the analyst.
The upgraded price target to INR2,120.00 is based on CLSA's decision to roll forward the valuation to December 2026 and to increase the target price-to-earnings (PE) multiple from 55x to 60x. This adjustment signals confidence in Havells India's earnings prospects and its strategic focus.
The analyst also noted that the shift in focus by Lloyd, Havells' large appliance division, towards improving profit margins and market share will be an important factor to monitor in the future. This strategic move is anticipated to contribute to Havells India's overall performance and market positioning.
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