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Havells
- 1. Engineering and capital goods industry Group no.: 12 Rohan Goswami 75 Parth Gosalia 74 Amit Gulve 76
- 2. Company Profile • Electrical equipment company founded in 1958 • Dealer network – 10,000+ • 13 Manufacturing plants • 50+ countries
- 3. Products
- 4. • Committed to high standards of corporate governance, rated CGR 2+ by CARE. • Well experienced and diversified professional Board. • Promoters- single business focus. • Transparent and detailed communication to shareholders Corporate Governance
- 5. Competitors
- 6. Particulars 2016 2017 2018 2019 2020 EBITDA Margin 14.10% 13.40% 12.90% 11.80% 10.90% RoCE 27% 26% 29% 30% 25% RoE 19% 19% 20% 21% 18% EPS 8.16 9.55 11.21 12.59 11.71 Dividend Payout 44% 44% 43% 43% 41% Net Revenue (Rs. Cr.) ₹ 5,378.00 ₹ 6,135.00 ₹ 8,139.00 ₹ 10,068.00 ₹ 9,429.00 PBT ₹ 707.00 ₹ 827.00 ₹ 1,003.00 ₹ 1,146.00 ₹ 902.00 Financials
- 7. Particulars 2016 2017 2018 2019 2020 Current Ratio 2.28 2.04 1.47 1.51 1.5 Quick Ratio 1.26 1.44 0.81 0.75 0.69 Inventory Turnover Ratio 6.93 6.61 5.02 5.25 5.04 Liquidity Ratios
- 8. • WACC = 8.3% oBeta - 1yr NIFTY50 oRf - 3 month t-bills oRm - 3 year index return Beta & WACC Slope = 0.663568 Cov/Var = 0.663568 BETA 1 YR CAPM Ke = Rf+ Beta(Rm-Rf) Rf = 3 months t-bills = 3.25 + 0.66(11.57 - 3.25) Beta = SLOPE IN EXCEL(3 Years) = 8.365 Rm = 3 Yrs Nifty100 returns
- 9. 5 Year GDP 5 Year Revenue CAGR Industry Growth Assign weights Weighted Average Growth Rate Growth Rate Growth % Weightage Weighted avg Economy 6.81% 0.6 0.04086 Industry 5.00% 0.15 0.0075 Company 12.00% 0.25 0.03 GROWTH 7.84% • Spending on consumer electric depends on disposable income • Technological Environment • Company’s market • Havells domestic revenue – 79.64% • Havells export revenue – 20.36% • Industry experts & annual report – 5% industry growth
- 10. (FCFFn+1) 2020 2021E 2022E 2023E 2024E EBIT 924 996.4046 1074.483 1158.679 1249.474 Less: Tax @ 25% 231 249.1012 268.6207 289.6698 312.3684 NOPAT 693 747.3035 805.8622 869.0095 937.1051 Add: Depreciation 217 234.0041 252.3407 272.1141 293.437 Less: Capex 360.93 389.2125 419.7112 452.5997 488.0654 Less: Change in WC 399.2 430.4813 464.2138 500.5896 539.8158 FCFF 149.87 161.6138 174.2779 187.9343 202.6608 PVF @ 8.3% 1 0.923361 0.852596 0.787254 0.726919 PV 149.87 149.2279 148.5885 147.9519 147.318 DCF Model
- 11. Terminal Value Terminal Value = 𝐹𝐶𝐹𝐹𝑛+1 (𝑟−𝑔) = 156.75 (0.083−0.0784) = 34075.31 cr. • Value of Equity – Rs. 34225.18 cr. • No. of shares – 62.5 cr. • Value per share – 547.60
- 12. MARKET CAP P/E ROE ROCE DEBT TO EQUITY SALES SALES% Havells 45,589 71.24 17.47% 21.45 0.64 9429 49.27 Crompton GEC 18,694 40.03 43.19% 35.42 0.87 4520 23.62 Polycab Wires 13,960 52.9 22.89% 26.99 0.55 2129 11.13 V-Guard Industries 7,304 18.52 20.49% 26.12 0.46 2496 13.04 Orient Electric 4,311 129.69 24.33% 32.65 1.67 563 2.94 Comparative Peer Analysis
- 13. P/S P/B EV/EBITDA Havells 5.44 10.69 47.59 Crompton Greaves Consumer Electricals 4.77 11.29 28.91 V-Guard Industries 3.31 7.76 34.94 Polycab Wires 1.90 3.40 12.73 Orient Electric 2.55 12.21 39.93 Valuation Ratios
- 14. 26-Oct-2018 26-Oct-2019 26-Oct-2020 Havells 49.20 54.91 71.24 Electrical Equipment 16.08 19.10 24.22 Comps Set (Median) 17.99 21.91 28.99
- 15. • Havells Q2 net profit up by 82% yoy to rs 326.4 crore. • Lloyd enters refrigerator segment, move to help diversify revenue mix. • Havells reaches new 52 week high of Rs. 731. Company News
- 16. THANK YOU