Buy Large Cap Multibagger Stock For 34% Upside, Recommends ICICI Securities

ICICI Securities remains bullish on large cap stock, Havells India and assigned buy call with a target price of Rs 1550 apiece. Rural markets are just 5-6% of Havells Consumer sales.

According to the analyst, "with improving availability of electricity, India's rural markets offer huge growth tailwinds to Havells. In order to tap the opportunity, the company commenced Rural Vistaar project four years ago." If you buy Havells India at the current market price of Rs 1154 apiece, you can get 34% potential upside. Check key takeaways below:

1. Havells India Stock Performance & Return

The stock's last trading price is Rs 1154 apiece with 52-week high at Rs 1419 apiece and 52-week low at Rs 1037 apiece, respectively. The large cap company has a market capitalisation of Rs 72352 crore. It has given multibagger returns to investors with last 5-years return at 108%. In last 3-years, the stock has jumped 76% and declined a little over 14% in last 1-year.

2. Havells India Rural Vistaar Project

Rural markets generate 5-6% of its consumer revenues for Havells. Company rolled out its Rural Vistaar project four years ago to expand distribution and improve sales in rural areas. This project aims to reach 3,000 towns with populations between 10k-50k.

3. Expansion Of Distribution In Rural Markets

Havells is present in 3,000 towns through 40,000 outlets as of FY22 vs 1,000 towns through 3,000 outlets in FY19 and 18,000 outlets in FY20. We note the increase in rural outlets helped Havells immensely during the covid-impacted years of FY21 and FY22.

4. Valuation

According to ICICI Securities, "We model Havells to report a PAT CAGR of 21.4% and RoE to be upward of 17%, over FY22-FY24E. We remain positive on the company's business model due to strong moats and growth opportunities. Maintain BUY with a DCFbased target price of Rs1,550 (implied P/E 55x FY24E)."

5. About Havells India

Havells India Limited is a leading Fast Moving Electrical Goods (FMEG) Company and a major power distribution equipment manufacturer with a strong global presence. Havells enjoys enviable market dominance across a wide spectrum of products, including Industrial & Domestic Circuit Protection Devices, Cables & Wires, Motors, Fans, etc. The company pioneered the concept of exclusive brand showroom in the electrical industry with 'Havells Exclusive Brand Stores', according to its official website.

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.