Why we chose Havells?

We used equity screening on Bloomberg to find companies that met the following criteria:

  • Electrical equipment manufacturing sector
  • Country of domicile: India
  • Dividend payout ratio >= 10%
  • ROIC/WACC ratio > 1


This screening resulted in a list of 6 companies. We then narrowed down the list by looking at the following factors:

  • Market capitalization: By focusing on companies with large market capitalizations, we ensured that the chosen company would possess the liquidity and research coverage necessary for a comprehensive assessment.
  • Competitive landscape: A strong competitive position within the industry is crucial for long-term success. We sought companies that had established a dominant market presence and exhibited resilience against competitors.


Specific reasons for choosing Havells:

  • The Bloomberg shows that Havells has a dividend payout ratio of 43.8433%, which is higher than the average for the electrical equipment manufacturing sector. This means that Havells returns a significant portion of its profits to shareholders in the form of dividends.
  • Havells also has a ROIC/WACC ratio of 1.40, which is higher than 1. This means that Havells is generating a return on its capital that is greater than its cost of capital. This is a good sign for investors, as it means that the company is creating value for shareholders.
  • The company has a strong brand presence in India. It is one of the leading brands in the electrical equipment manufacturing industry in India.

In conclusion, Havells emerged as an ideal candidate for value creation story for shareholders. The company's unwavering profitability, strong brand presence, diversified product portfolio and dominant competitive position collectively paint a picture of a company well-positioned for long-term value generation.


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