HAVELLS - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.8
| Stock Code | HAVELLS | Market Cap | 84,062 Cr. | Current Price | 1,340 ₹ | High / Low | 1,674 ₹ |
| Stock P/E | 55.1 | Book Value | 138 ₹ | Dividend Yield | 0.74 % | ROCE | 25.6 % |
| ROE | 19.0 % | Face Value | 1.00 ₹ | DMA 50 | 1,391 ₹ | DMA 200 | 1,484 ₹ |
| Chg in FII Hold | -1.32 % | Chg in DII Hold | 1.18 % | PAT Qtr | 335 Cr. | PAT Prev Qtr | 317 Cr. |
| RSI | 46.8 | MACD | -35.1 | Volume | 4,19,924 | Avg Vol 1Wk | 9,86,561 |
| Low price | 1,250 ₹ | High price | 1,674 ₹ | PEG Ratio | 7.00 | Debt to equity | 0.03 |
| 52w Index | 21.2 % | Qtr Profit Var | 18.4 % | EPS | 23.8 ₹ | Industry PE | 25.9 |
📊 Analysis: Havells demonstrates strong operational efficiency with ROCE (25.6%) and ROE (19.0%), supported by a debt-light balance sheet (0.03). However, valuations are stretched with a P/E of 55.1 compared to industry average of 25.9, and a high PEG ratio (7.00) indicating expensive growth. Dividend yield (0.74%) is modest. Current price (₹1,340) is below both 50 DMA (₹1,391) and 200 DMA (₹1,484), reflecting weak momentum. RSI (46.8) suggests neutral conditions, while MACD (-35.1) indicates bearish sentiment. The ideal entry zone lies between ₹1,250–₹1,300 for long-term investors. If already holding, maintain positions for 3–4 years, leveraging strong fundamentals, but consider partial profit booking near ₹1,600–₹1,650 resistance levels.
✅ Positive
- Strong ROCE (25.6%) and ROE (19.0%) reflect efficient capital use.
- Debt-to-equity ratio (0.03) ensures financial stability.
- Quarterly PAT growth (₹335 Cr vs ₹317 Cr) shows earnings momentum (+18.4%).
- DII holdings increased (+1.18%), reflecting domestic institutional confidence.
⚠️ Limitation
- High P/E (55.1) compared to industry average (25.9).
- PEG ratio (7.00) signals overvaluation relative to growth.
- Dividend yield (0.74%) is modest despite strong profitability.
📉 Company Negative News
- Decline in FII stake (-1.32%), showing reduced foreign investor interest.
- Stock trading below 200 DMA (₹1,484), reflecting weak long-term momentum.
📈 Company Positive News
- EPS at ₹23.8 supports steady earnings base.
- Strong quarterly profit growth highlights operational resilience.
- Debt-light structure enhances long-term sustainability.
🏭 Industry
- Consumer electricals industry benefits from rising urbanization and infrastructure growth.
- Industry PE (25.9) is much lower than Havells, suggesting peers may offer better valuations.
🔎 Conclusion
Havells is a fundamentally strong company with efficient operations and low debt, making it a decent long-term candidate. However, valuations are stretched, so ideal entry is around ₹1,250–₹1,300. Existing holders should maintain positions for 3–4 years, leveraging growth and stability, while booking profits near ₹1,600–₹1,650 resistance levels.
Would you like me to extend this with a peer benchmarking overlay (Crompton Greaves, V-Guard, Bajaj Electricals) so you can compare Havells’ valuation and profitability against its closest consumer electrical peers?