Is It Time To Consider Buying Havells India Limited (NSE: HAVELLS)?
Havells India Limited (NSE: HAVELLS), is not the biggest company in the market, but it has seen significant share price movement in recent months on the NSEI, reaching highs of ₹ 1.176 and falling to the most low of ₹ 986. Certain movements in the price of stocks can give investors a better opportunity to enter the stock and possibly buy at a lower price. One question to be answered is whether Havells India’s current price of ₹ 1,018 reflects the true value of the mid-cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at the outlook and value of Havells India based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Havells India
What is Havells India worth?
Havells India appears to be expensive under my multiple pricing model, which compares the company’s price / earnings ratio and the industry average. In this case, I used the price-to-earnings (PE) ratio since there isn’t enough information to reliably forecast the stock’s cash flow. I find Havells India’s 61.04x ratio to be above its 22.22x average, suggesting that the stock is trading at a higher price relative to the electric industry. In addition, the Havells India share price also appears relatively stable compared to the rest of the market, as indicated by its low beta. If you think the stock price is likely to eventually hit levels close to its industry peers, a low beta might suggest it’s unlikely to do so anytime soon, and once. it is there, it can be difficult to fall back into an attractive buying range.
What kind of growth will Havells India generate?
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a large company with a solid outlook at a cheap price is always a good investment, so let’s take a look at the company’s future expectations as well. Profits are expected to increase by 35% over the next two years, the future looking bright for Havells India. It looks like higher cash flow is to be expected for the stock, which should translate into higher valuation for stocks.
What this means for you:
Are you a shareholder? HAVELLS ‘bullish future growth appears to have been factored into the current stock price, with stocks trading above industry price multiples. At this current price, shareholders may ask a different question: should I sell? If you think HAVELLS should trade below its current price, selling high and buying it back when its price drops to the industry PE ratio can be profitable. But before you make that decision, see if its fundamentals have changed.
Are you a potential investor? If you’ve been keeping your eye on HAVELLS for a while, it might not be the best time to get into the stock. The price has topped its industry peers, which means there is likely to be no more benefit from poor pricing. However, the positive outlook is encouraging for HAVELLS, which means it is worth delving deeper into other factors in order to take advantage of the next price drop.
Keep in mind that when it comes to analyzing a stock, it is worth noting the risks involved. For example, we discovered 1 warning sign that you should go through your eyes to have a better picture of Havells India.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take into account your goals or your financial situation. We aim to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative information. Simply Wall St has no position in the mentioned stocks.
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