Motilal Oswal - MOSL: Morning India (14/May/18): 1. EcoScope; 2. JLR (Automobile); 3. Sun TV Network; 4. Havells India; 5. P G Hygiene; 6. GlaxoSmith C H L; 7. Canara Bank; 8. Mphasis

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Motilal Oswal

Team Research

MOSL: Morning India (14/May/18): 1. EcoScope; 2. JLR (Automobile); 3. Sun TV Network; 4. Havells India; 5. P & G Hygiene; 6. GlaxoSmith C H L; 7. Canara Bank; 8. Mphasis

MOrning India (14/May/18): 1. EcoScope; 2. JLR (Automobile); 3. Sun TV Network; 4. Havells India; 5. P & G Hygiene; 6. GlaxoSmith C H L; 7. Canara Bank; 8. Mphasis

Today’s top research idea

Havells India: Operating performance ahead of expectations

Healthy overall performance for the quarter: Revenue grew 48% YoY to INR25.3b (est. of INR24.8b) in 4QFY18 supported by strong performance of the core business (+18% YoY, adj. for excise impact on exempted zones) and equally robust performance from newly acquired Lloyd electrical business (INR5.8b for 4QFY18). Operating profit of INR3.6b (+55.8% YoY) was ahead of our estimate of INR3.1b, led by above-estimated performance in Lighting (contribution margin of 31% vs 28% in 4QFY17) and Lloyd Electrical (contribution margin of 22% in 4QFY18). Adj. PAT of INR2.3b (+37% YoY) was above our estimate of INR2.1b. For FY18, revenue stood at INR81.4b (+33% YoY), operating profit at INR10.5b (+27% YoY) and PAT at INR7.0b (+17% YoY).
We like HAVL given (a) successful development of brand, distribution and product portfolio, (b) demonstrated track record of accelerating growth through new launches, (c) healthy dividend payout and (d) robust return ratios and maintain our Buy rating and TP to INR630 with exit multiple of 37x Mar'20E EPS of INR17.1.

Piping hot news

India’s IIP growth falls to five-month low of 4.4% in March

The recovery in India’s industrial production faltered in March after manufacturing registering robust growth for four consecutive months, official data showed on Friday, casting doubts on the strength of upturn in the Indian economy.

14/05/2018 36 EN

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MOSL: Morning India (14/May/18): 1. EcoScope; 2. JLR (Automobile); 3. Sun TV Network; 4. Havells India; 5. P & G Hygiene; 6. GlaxoSmith C H L; 7. Canara Bank; 8. Mphasis

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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