HAVELLS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | HAVELLS | Market Cap | 80,160 Cr. | Current Price | 1,278 ₹ | High / Low | 1,713 ₹ |
| Stock P/E | 52.5 | Book Value | 138 ₹ | Dividend Yield | 0.78 % | ROCE | 25.6 % |
| ROE | 19.0 % | Face Value | 1.00 ₹ | DMA 50 | 1,401 ₹ | DMA 200 | 1,490 ₹ |
| Chg in FII Hold | -1.32 % | Chg in DII Hold | 1.18 % | PAT Qtr | 335 Cr. | PAT Prev Qtr | 317 Cr. |
| RSI | 27.6 | MACD | -43.1 | Volume | 3,32,556 | Avg Vol 1Wk | 10,93,499 |
| Low price | 1,257 ₹ | High price | 1,713 ₹ | PEG Ratio | 6.67 | Debt to equity | 0.03 |
| 52w Index | 4.40 % | Qtr Profit Var | 18.4 % | EPS | 23.8 ₹ | Industry PE | 24.6 |
💹 Core Financials: Havells demonstrates solid profitability with ROE at 19.0% and ROCE at 25.6%, reflecting efficient capital utilization. Debt-to-equity ratio of 0.03 indicates a virtually debt-free balance sheet. Quarterly PAT improved from ₹317 Cr. to ₹335 Cr., showing an 18.4% growth. Dividend yield of 0.78% provides modest income. EPS at ₹23.8 highlights steady earnings, though margins remain under pressure due to high competition.
📊 Valuation Indicators: Current P/E of 52.5 is significantly higher than the industry average of 24.6, suggesting overvaluation. Book value of ₹138 against CMP of ₹1,278 implies a high P/B ratio (~9.3). PEG ratio of 6.67 indicates valuation is stretched relative to growth prospects. Intrinsic value appears lower than CMP, pointing to limited upside at current levels.
🏢 Business Model & Competitive Advantage: Havells operates in consumer electricals, appliances, and lighting solutions. Its competitive advantage lies in strong brand equity, wide distribution network, and diversified product portfolio. The company benefits from recurring demand in consumer durables and infrastructure-related products, supported by innovation and premium positioning.
💰 Entry Zone Recommendation: Considering DMA 50 at ₹1,401 and DMA 200 at ₹1,490, the stock is trading below both averages, showing weakness. A favorable entry zone would be ₹1,200–₹1,250 during corrections. Current levels remain slightly overvalued relative to intrinsic metrics.
📈 Long-Term Holding Guidance: Havells remains a fundamentally strong company with robust returns, low debt, and strong brand presence. Long-term investors can hold, while new investors should wait for dips to improve risk-reward balance.
Positive
- Strong ROE (19.0%) and ROCE (25.6%) reflect efficiency.
- Debt-to-equity ratio of 0.03 ensures financial stability.
- Quarterly PAT growth of 18.4% shows earnings momentum.
- Strong brand equity and diversified product portfolio.
Limitation
- P/E ratio (52.5) is much higher than industry average (24.6).
- P/B ratio (~9.3) indicates expensive valuation.
- Dividend yield of 0.78% is modest.
- RSI at 27.6 indicates oversold technical condition.
Company Negative News
- Decline in FII holdings (-1.32%) signals reduced foreign investor confidence.
- Stock trading below DMA 50 and DMA 200 indicates technical weakness.
Company Positive News
- Increase in DII holdings (+1.18%) reflects strong domestic institutional support.
- Quarterly PAT improved from ₹317 Cr. to ₹335 Cr.
- Strong demand outlook in consumer electricals and appliances.
Industry
- Consumer electricals industry benefits from rising urbanization and infrastructure growth.
- Industry P/E at 24.6 suggests peers trade at more reasonable valuations.
- Competition from Crompton, Bajaj Electricals, and Orient Electric keeps pricing pressure high.
Conclusion
⚖️ Havells is a fundamentally strong company with excellent return ratios, low debt, and strong brand presence. However, valuations are stretched compared to industry peers. Long-term investors can hold, while new investors should wait for corrections towards ₹1,200–₹1,250 for better entry opportunities.
I can also prepare a peer comparison HTML snippet against Crompton and Bajaj Electricals to highlight relative strengths and weaknesses if you'd like.