Author: Sarika Patil

Weekly News Summary

16th May 2025

Market data as on 16th May 2025

The US markets ended higher on Friday as traders have continued to express optimism over US and its trade partners reaching deals following the US-China trade deal temporarily slashing steep tariffs on each other's goods.

Moody’s Ratings downgraded the U.S. sovereign credit rating from Aaa to Aa1, citing rising fiscal deficits and escalating debt levels. This action followed the House Budget Committee’s approval of a $3.8 trillion tax cut package, intensifying concerns over fiscal sustainability. The downgrade led to a sell-off in U.S. assets
The U.S. reduced tariffs on most imports to 30%, including a 20% tariff related to the battle against fentanyl. China lowered tariffs to 10% on most U.S. goods and eased some non-tariff trade restrictions. This temporary truce boosted market sentiment, particularly in tech-oriented sectors. US-China trade deal faded after the United States and China agreed to drastically reduce the massive tariffs on each other's goods for 90 days, following negotiations over the weekend in Switzerland. Meanwhile investors turned their focus to a key US inflation data due later in the day.
inflation data eased concerns about President Donald Trump's new tariffs on US trade partners leading to higher prices. The report released by the Labor Department showed consumer prices in the US rose by slightly less than expected in the month of April. The Labor Department said its consumer price index inched up by 0.2 percent in April after edging down by 0.1 percent in March, while the street had expected consumer prices to rise by 0.3 percent. Further, the report also said the annual rate of growth by consumer prices slowed to 2.3 percent in April from 2.4 percent in March, while the annual rate of growth by core consumer prices was unchanged at 2.8 percent
trade deals between the US and China and the UK have helped ease concerns about President Donald Trump's trade policies, uncertainty about the eventual outcome continues to hang over the markets. Meanwhile, Traders also were reluctant to make more significant moves ahead of the release of a slew of US economic data on Thursday, including producer prices, retail sales and industrial production. Further, investors maintained risk adverse approach ahead of Federal Reserve Chair Jerome Powell’s speech

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Crude Oil
crude oil futures continued to benefit from optimism about the outlook for demand after the US and China reached a trade deal that drastically reduces the massive tariffs on each other's goods. The US will retain tariffs imposed in response to the fentanyl national emergency, resulting in an effective tariff rate on Chinese goods of 30 percent. Meanwhile, traders largely shrugged off President Donald Trump announcement after he announced that the U.S. will remove all sanctions on Syria.
President Donald Trump indicated the US is very close to reaching a nuclear deal with Iran. Trump's comments come after a top adviser to Iranian Supreme Leader Ayatollah Ali Khamenei indicated that the Iran is ready to sign a nuclear deal with certain conditions with in exchange for lifting economic sanctions. Besides, concerns about global oil demand raised by the International Energy Agency (IEA) in its Oil Market Report for May also dampened market sentiment. The IEA said global oil demand growth is projected to slow for the remainder of the year as economic headwinds and record EV sales curb use.

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Global News
European markets were trading in green, while Asian markets ending in green as the US and China both reported substantial progress after two days of talks in Switzerland aimed at de-escalating a trade war.
European defense stocks rallied as EU nations pledged significant increases in military spending. Notably, Germany committed to raising defense expenditure to 2.5% of GDP, and the UK announced a £1.6 billion fund for missile systems. Companies like Rheinmetall, BAE Systems, and Saab saw substantial stock gains .
The UK economy grew by 0.7% in Q1 2025, the fastest among G7 nations, driven by services and production sectors. However, rising mortgage defaults and financial stress among households tempered investor optimism.
China reported a 6% rise in industrial output and a 4% increase in retail sales for the first two months of 2025. Despite this, concerns over the property market persisted, with home prices falling and real estate investment down nearly 10% year-over-year
Indonesia's Jakarta Composite Index plunged over 7% in a single session, triggering a trading halt. The decline was attributed to political uncertainties, fiscal policy concerns, and proposed military reforms, leading to significant foreign investor outflows
A 90-day tariff reduction agreement between the U.S. and China provided temporary relief to global markets. However, analysts cautioned that underlying trade tensions and structural economic issues remain unresolved.
European markets were trading higher as investors continued to cheer the recent tariff agreement between U.S. and China, and news about a positive progress in talks between the EU bloc and U.S. for lowering the tariffs from earlier proposed levels. Asian markets ended mixed on Friday as Japanese GDP data disappointed and investors awaited clarity on how the global economy would be impacted by U.S. tariffs on its trading partners.

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India
Market data as on 16th May 2025
The United Nations (UN) has revised India's economic growth forecast for 2025, down to 6.3 per cent, and despite a projected moderation, the country remains one of the fastest-growing large economies, supported by resilient consumption and government spending
Foreign institutional investors (FIIs) were net buyers, investing Rs 5,392.94 crore in Indian equities on Thursday, according to exchange data.
Commerce Secretary Sunil Barthwal said that the negotiations for the proposed bilateral trade agreement between India and the US are progressing well. Barthwal said that an Indian team will be going to Washington for further discussions.
India's merchandise exports rose by 9.03 per cent to $38.49 billion in April 2025 as compared to $35.30 billion in same month last year, the highest in six months, driven by healthy growth in sectors such as electronics and engineering goods.
India has imposed an anti-dumping duty of up to $664 per tonne on imports of a certain type of solar glass from China and Vietnam for five years in a bid to protect domestic manufacturers from cheap imports from these two countries.
the Chamber of Trade and Industry (CTI) has appealed to over 700 business organisations in the national capital to halt all forms of trade with China and Turkey. China and Turkey have supported rival positions in the Indo-Pak conflict
Consumer Price Index (CPI), eased to 3.16 per cent in the month of April 2025. There was decline of 18 basis points in headline inflation of April 2025 in comparison to March 2025

Halting a two-day winning streak, Indian equity benchmarks traded lackluster throughout the day and finally ended marginally lower amid emergence of profit-taking after a sharp rally in the previous trading session. Markets were dragged lower due to selling in TECK, IT and Healthcare stocks and a largely weak trend in Asian markets.

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Source: Company data, Institutional Research	Company Snapshot / Havells India Ltd. (Havells) is the leading manufacturer of fast moving electrical goods and major power distribution equipment. The company is head quartered in Noida and having presence across geographies. Havells enjoys enviable market dominance across a wide spectrum of products, including Industrial & Domestic Circuit Protection Devices, Cables & Wires, Motors, Fans, Modular Switches, Home Appliances, Air Conditioners, Electric Water Heaters, Power Capacitors, CFL Lamps, and Luminaires for Domestic, Commercial and Industrial Applications. The company has very strong distribution network not only in India but also across the geographies. The company has 12 state-of-the-art manufacturing plants in India located at Haridwar, Baddi, Sahibabad, Faridabad, Assam, Alwar and Neemrana, manufacturing globally acclaimed products, synonymous with excellence and precision in the electrical industry. / Investment Rationale / Favorable market conditions and strong demand will help them to grow / Indian economy is improving with the higher momentum. It is one of the fastest growing economies in the world. This growth helps to create greater per capita income and also the stronger demand. With the increasing robustness of the market, there is huge opportunity for the electrical goods and consumption businesses. Total domestic market size of electrical segment is approximately Rs.45, 000crs. According to the company and the industry resources the electrical segment vertical likely to grow by 12% CAGR for next 5 years. The home appliances vertical is also having great demand for from the domestic market. The market size has increase with the higher momentum and will also likely in the upcoming future. Total market size of the home appliances is at Rs.70,000 Crs. And will likely to grow by 15% CAGR in the next 5 years. / Robust business structure gives edge over its peers / Havells owns some of the most prestigious brands like Havells, Lloyd, Crabtree, Standard and Promptec. Its network constitutes of 4000 professionals, over 7575 dealers and 40 branches in the country. Its products are available in 40 countries. The company has 12 state-of-the-art manufacturing plants in India located at Haridwar, Baddi, Sahibabad, Faridabad, Assam, Alwar and Neemrana, manufacturing globally acclaimed products, synonymous with excellence and precision in the electrical industry. Havells along with its brands have earned the distinction of being the preferred choice of electrical products for discerning individuals and industrial consumers both in India and abroad. Havells offers same quality products for both Indian and International markets. It is committed to keep powering the world with its state-of-the-art innovations and energy-efficient solutions. Currently over 90% of its product offerings are energy efficient and manufactured in-house. / Valuation / At the CMP of `661, Havells is trading at 50.4x, and 39.06x its FY19E, and FY20E EPS of `13.16 and `17.00. Compared to its peers; Havells is trading at a discount P/E multiple, although its margins are better than or comparable to peers. We initiate coverage on Havells India Ltd with a BUY rating and attach a multiple of 47.6 xs to Havells’ FY20E earnings (EPS) to arrive at the target price of `809, indicating a potential upside of 22%.

Source: Company data, Institutional Research	Company Snapshot / Havells India Ltd. (Havells) is the leading manufacturer of fast moving electrical goods and major power distribution equipment. The company is head quartered in Noida and having presence across geographies. Havells enjoys enviable market dominance across a wide spectrum of products, including Industrial & Domestic Circuit Protection Devices, Cables & Wires, Motors, Fans, Modular Switches, Home Appliances, Air Conditioners, Electric Water Heaters, Power Capacitors, CFL Lamps, and Luminaires for Domestic, Commercial and Industrial Applications. The company has very strong distribution network not only in India but also across the geographies. The company has 12 state-of-the-art manufacturing plants in India located at Haridwar, Baddi, Sahibabad, Faridabad, Assam, Alwar and Neemrana, manufacturing globally acclaimed products, synonymous with excellence and precision in the electrical industry. / Investment Rationale / Favorable market conditions and strong demand will help them to grow / Indian economy is improving with the higher momentum. It is one of the fastest growing economies in the world. This growth helps to create greater per capita income and also the stronger demand. With the increasing robustness of the market, there is huge opportunity for the electrical goods and consumption businesses. Total domestic market size of electrical segment is approximately Rs.45, 000crs. According to the company and the industry resources the electrical segment vertical likely to grow by 12% CAGR for next 5 years. The home appliances vertical is also having great demand for from the domestic market. The market size has increase with the higher momentum and will also likely in the upcoming future. Total market size of the home appliances is at Rs.70,000 Crs. And will likely to grow by 15% CAGR in the next 5 years. / Robust business structure gives edge over its peers / Havells owns some of the most prestigious brands like Havells, Lloyd, Crabtree, Standard and Promptec. Its network constitutes of 4000 professionals, over 7575 dealers and 40 branches in the country. Its products are available in 40 countries. The company has 12 state-of-the-art manufacturing plants in India located at Haridwar, Baddi, Sahibabad, Faridabad, Assam, Alwar and Neemrana, manufacturing globally acclaimed products, synonymous with excellence and precision in the electrical industry. Havells along with its brands have earned the distinction of being the preferred choice of electrical products for discerning individuals and industrial consumers both in India and abroad. Havells offers same quality products for both Indian and International markets. It is committed to keep powering the world with its state-of-the-art innovations and energy-efficient solutions. Currently over 90% of its product offerings are energy efficient and manufactured in-house. / Valuation / At the CMP of `661, Havells is trading at 50.4x, and 39.06x its FY19E, and FY20E EPS of `13.16 and `17.00. Compared to its peers; Havells is trading at a discount P/E multiple, although its margins are better than or comparable to peers. We initiate coverage on Havells India Ltd with a BUY rating and attach a multiple of 47.6 xs to Havells’ FY20E earnings (EPS) to arrive at the target price of `809, indicating a potential upside of 22%.

CMP (`)	Target (`)
661	809

Potential Upside	Absolute Rating
22%	BUY

Market Info (as on September 06, 2018)
BSE Sensex	38,018
Nifty S&P	11,477

Stock Detail
BSE Group	A
BSE Code	517354
NSE Code	HAVELLS
Bloomberg Code	HAVL IN
Market Cap (`bn)	415.34
Free Float (%)	38%
52wk Hi/Lo	728.95 / 454.00
Avg. Daily Volume (NSE)	555,063
Face Value / Div. per share (`)	1.00 / 3.00
Shares Outstanding (mn)	625

Promoters	Public	Others
59.55	40.45	0.01

Financial Snapshot (`mn)
Y/E Mar	FY17	FY18	FY19E	FY20E
Net Sales	61,558	81,464	97,757	1,17,308
EBITDA	8,182	10,434	12,708	15,954
PAT	4,941	6,735	8,232	10,631
EPS	7.91	10.77	13.16	17.00
ROE (%)	15%	18%	20%	22%
ROCE (%)	20%	23%	25%	29%
P/E	58.1	66.5	54.4	42.1
EV/EBITDA	34.4	42.7	34.9	27.7

Share Price Performance

Rel. Perf.	1Mth	3 Mths	6Mths	1Yr
Havells (%)	3.04	25.2	30.6	34.1
Sensex (%)	(4.7)	2.1	5.1	25.0

CMP (`)	Target (`)
661	809

Potential Upside	Absolute Rating
22%	BUY

Market Info (as on September 06, 2018)
BSE Sensex	38,018
Nifty S&P	11,477

Stock Detail
BSE Group	A
BSE Code	517354
NSE Code	HAVELLS
Bloomberg Code	HAVL IN
Market Cap (`bn)	415.34
Free Float (%)	38%
52wk Hi/Lo	728.95 / 454.00
Avg. Daily Volume (NSE)	555,063
Face Value / Div. per share (`)	1.00 / 3.00
Shares Outstanding (mn)	625

Promoters	Public	Others
59.55	40.45	0.01

Financial Snapshot (`mn)
Y/E Mar	FY17	FY18	FY19E	FY20E
Net Sales	61,558	81,464	97,757	1,17,308
EBITDA	8,182	10,434	12,708	15,954
PAT	4,941	6,735	8,232	10,631
EPS	7.91	10.77	13.16	17.00
ROE (%)	15%	18%	20%	22%
ROCE (%)	20%	23%	25%	29%
P/E	58.1	66.5	54.4	42.1
EV/EBITDA	34.4	42.7	34.9	27.7

Share Price Performance

Rel. Perf.	1Mth	3 Mths	6Mths	1Yr
Havells (%)	3.04	25.2	30.6	34.1
Sensex (%)	(4.7)	2.1	5.1	25.0