PINC Research is bullish on Havells India. It has maintained ‘Buy’ rating on the company with a 12-month price target of Rs 650.

According to PINC, interested investors can purchase the stock on declines with a strict stop loss of Rs 535.

Today (May 27), the company’s shares opened at Rs 485, as against its last closure at Rs 476.80 on Friday (May 23), on the Bombay Stock Exchange (BSE). Current EPS and P/E ratio stood at 24.78 and 19.44 respectively. The share price has seen a 52-week high of Rs 749.9 and a low of Rs 376 on BSE.

The stock will achieve the target price as the company has aggressive growth plans and strong operating capabilities.

Havells India, a USD 1.2 billion company and one of the largest electrical companies, has posted a phenomenal jump of 40.51% in standalone net profit for the year ended March 2008.

The company’s net profit during the year surged 40.51% to Rs 1,435.40 million from Rs 1,021.53 million in the previous year.

Net sales for the year rose 32.81% to Rs 20,548.60 million, while total income during the year rose 33.28% to Rs 20,694 million, when compared with the prior yea. The company posted earnings of Rs 26 a share during the year, registering 36.84% growth over last year.

During the year, the company reported a fall in operating margin of 8.95 basis points to 9.02% on higher input cost. Interest cost increased 27.90% to Rs 206.50 million, while depreciation cost rose 34.16% to Rs 130.70 million over previous year.

The board of directors has recommended dividend of 50% i.e. Rs 2.50 a share of Rs 5 each for the financial year 2007-08.

The company, on March 31, announced that it would invest Rs 4 billion for increasing its capacity and venturing into a new segment.

The company is entering the new segment of manufacturing electrical-motors and is increasing its capacities in lighting and cables segment. It has already spent Rs 2 billion in current fiscal, of the total budget of Rs 4 billion.

The electrical goods manufacturer is setting up a green-field plant in Rajasthan to manufacture electrical motors ranging from .25 horse power to 500 horse power. The company has already spent Rs 1.50 billion in the plant and will invest Rs 500 million more in it.