Havells India share price hits 52-week high on Goldman Sachs ‘buy’ upgrade

Shares of Havells India Limited gained 4 percent to hit a 52-week high of Rs 1,482 in the morning trade on February 27 after Goldman Sachs upgraded the rating for the wires and cables manufacturer to a “buy” from “neutral” .

The global brokerage also increased the price target to Rs 1,660 from Rs 1,540, an upside of 17 percent from the previous session’s close.

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The brokerage views Havells’ cost-control initiatives positively, including the strategic move to shift outsourcing to its manufacturing facilities. The company’s continued investments in brands and human resources, even during a downturn, are seen as favourable.

Goldman Sachs anticipates that Havells will resume revenue growth in the teens beginning the March quarter, following two consecutive quarters of single-digit growth. The expected improvement in margin contribution from the Lloyd brand will enhance visibility on profitability, subsequently driving an increase in valuation.

In the December quarter, the company reported a 1.4 percent year-on-year (YoY) rise in net profit at Rs 287.9 crore, while the company’s revenue increased 6.8 percent to Rs 4,400.6 crore.

At 11:20 am, the stock was trading at Rs 1,424, up 2.2 percent from the previous close on the NSE. In the last three months, the stock has gained 12.5 percent.

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