Havells India has been a major wealth creator for equity investors in the last 10 years. The stock has risen from around Rs 30 in July 2009 to Rs 665 currently, up over 2100 percent in the last 10 years.
So, an investment of Rs 1 lakh in 2009 would be worth Rs 22 lakhs today.
The stock has gained 3 percent in the last one year but has fallen more than 6 percent in 2019. The stock hit an all-time high of Rs 807 on June 28, 2019, and an all-time low of Rs 0.17 on April 17, 1997.
Compared to its peers, the company has proved to be a multi-bagger and the top gainer in the industry. Siemens India generated 140 percent returns in the last 10 years, while BHEL fell 80 percent during the same period. Meanwhile, ABB India and Bharat Electronics were up around 100 percent and 120 percent, respectively.
Havells India has shown volume growth in the last four financial years despite challenging circumstances. Sales rose to Rs 5,378 crore for FY16, 6,135 in FY17, 8,139 in FY18 and 10,058 in FY19.
Havells India reported a 16.3 percent year-on-year (YoY) decline in June quarter consolidated profit on muted growth in key segments like cables, lighting, and switchgear. Its profit fell to Rs 177.09 crore over the June quarter, down from Rs 211.2 crore reported for the year-ago period.
However, consolidated revenue grew 4.5 percent to Rs 2,717 crore in Q1 with electrical business showing a double-digit growth of 24 percent YoY.
Post Q1, Reliance Securities maintained 'neutral' rating on the stock and said that it sees Havells as one of the pure plays on likely uptick in discretionary spend over the medium-term.
"We continue to like the business model of Havells, which is largely distribution-centric. With Lloyds in the portfolio, we believe the company will continue to go for increasing its share in household spending. Looking ahead, it will continue to expand its geographic reach as well as product offerings," the brokerage said in a report.
Meanwhile, Phillip Capital downgraded the stock to 'sell'. "In Q1, growth was majorly impacted by the slowdown in real estate, liquidity squeeze, delays in projects (post-elections) and lower off-take from Llyod. Lower volume growth, product mix, higher competitive intensity, and higher promotional spends impacted margin," it explained.
: CNBCTV18.com advises users to check with certified experts before taking any investment decisions