HAVELLS - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 My Thought Process

You're asking for a deep dive into Havells India’s fundamentals, valuation, and strategic outlook. I see you're looking for a numeric rating, a breakdown of financial health, valuation metrics, business model insights, and actionable guidance. Your request is structured like a professional equity research summary, so I’ll treat it with that level of rigor.

📊 Fundamental Analysis of Havells India

🔍 Core Financials

Revenue & Profitability

Quarterly PAT dropped from ₹522 Cr to ₹352 Cr (↓14.3%), indicating short-term margin pressure.

EPS stands at ₹22.8, which is decent but not high enough to justify the current P/E.

Return Metrics

ROCE: 25.6% and ROE: 19.0% — both strong, signaling efficient capital usage and shareholder value creation.

Debt & Liquidity

Debt-to-equity: 0.04 — virtually debt-free, which enhances financial resilience.

Strong cash flows implied by low leverage and consistent dividend payout.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 69.9 Extremely high vs industry PE of 26.4 — overvalued

P/B Ratio ~12 Premium valuation, suggests high market confidence

PEG Ratio 8.88 Very high — growth not justifying price

Intrinsic Value Likely < ₹1,300 Based on earnings and sector multiples

🏢 Business Model & Competitive Edge

Diversified Portfolio: Electrical goods, appliances, and consumer durables — strong presence across verticals.

Brand Strength: Aggressive brand-building (₹6,244 Mn invested) and wide distribution network (260,000 retailers, 301,000 electricians)

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Innovation & Capex: Heavy investment in R&D and white goods expansion, especially through Lloyd brand turnaround

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Moat: Distribution depth, brand recall, and low debt — all contribute to a durable competitive advantage.

📈 Technical & Entry Guidance

Current Price: ₹1,594

DMA 50/200: ₹1,553 / ₹1,575 — trading slightly above both, indicating bullish momentum.

RSI: 58.6 — neutral to bullish zone.

MACD: 17.5 — positive crossover, momentum building.

🎯 Entry Zone

Ideal Buy Range: ₹1,525–₹1,560 — near DMA support levels.

Stop Loss: ₹1,500

Upside Potential: ₹1,750–₹1,800 in medium term

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🕰️ Long-Term Holding Outlook

Hold if already invested: Strong fundamentals and brand strength justify long-term holding.

Avoid fresh entry at current price unless it dips to the suggested zone — valuation is stretched.

Growth Triggers: Lloyd profitability, capex execution, and margin recovery.

⭐ Fundamental Rating

3.9

Let me know if you want a technical chart breakdown or peer comparison next!

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