Author: Sarika Patil

Weekly News Summary

23rd May 2025

Market data as on 23rd May 2025

The US markets ended lower on Friday after President Donald Trump threatened to impose 50 percent tariffs on imports from the European Union beginning June 1st. Trump claimed that the EU has been very difficult to deal with and said trade talks with the bloc are going nowhere

Trump also threatened to impose a 25 percent tariff on Apple (AAPL) iPhones that are not manufactured in the U.S. Shares of Apple tumbled by 3.0 percent following the news. Trump's threats led to renewed to trade concerns, which had waned considerably in recent weeks after the U.S. reached trade deals with the U.K. and China.
On the economic data front, the Commerce Department released a report showing new home sales in the U.S. in the month of April spiked compared to a significantly downwardly revised level in March. The report said new home sales soared by 10.9 percent to an annual rate of 743,000 in April after jumping by 2.6 percent to a downwardly revised rate of 670,000 in March. Street had expected new home sales to tumble by 4.4 percent to a rate of 692,000 from the 724,000 originally reported for the previous month.
Existing home sales fell by 0.5 percent to an annual rate of 4.00 million in April after plunging by 5.9 percent to a rate of 4.02 million in March.
Initial jobless claims edged down to 227,000, a decrease of 2,000 from the previous week's unrevised level of 229,000. Street had expected jobless claims to inch up to 230,000.
U.S. House of Representatives passed a sweeping tax and spending bill that would enact much of President Donald Trump's policy agenda and saddle the country with trillions of dollars more in debt.
Twenty-year bond auction attracts below average demand: The Treasury Department announced the results of this month's auction of $16 billion worth of twenty-year bonds, revealing the sale attracted below average demand
U.S. house passes Trump's sweeping tax-cut bill: U.S. House of Representatives passed a sweeping tax and spending bill that would enact much of President Donald Trump's policy agenda and saddle the country with trillions of dollars more in debt.

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1

Crude Oil
Crude oil futures settled higher on Friday after moving lower for three consecutive sessions. The rebound on the day came despite renewed trade concerns after President Donald Trump threatened to impose 50 percent tariffs on imports from the European Union beginning June 1st. However, both contracts ended lower for week as OPEC+ which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, is holding meetings next week expected to yield another output increase of 411,000 barrels per day for July.
the OPEC+ members are discussing making a third consecutive oil production surge in July by 411,000 barrels a day. Oil prices were also impacted by concerns about Washington's ballooning deficit and upcoming U.S.-Iran negotiations and the potential easing of sanctions.

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2

Global News
Eurozone private sector shrinks for first time in 5 months: The flash purchasing managers' survey compiled by S&P Global showed that the flash HCOB composite output index fell to 49.5 in May from 50.4 in April.
French manufacturing sentiment weakens in May: The survey data from the statistical office INSEE showed that the manufacturing sentiment index dropped to 97 in May from 100 in April.
UK private sector logs marginal contraction: The flash survey data from S&P Global revealed that the flash composite output index rose to 49.4 in May from 48.5 in April.
Eurozone current account surplus at 9-month high: The data from the European Central Bank showed that the current account surplus rose to EUR 51 billion in March from EUR 41 billion in February.
Eurozone construction output rises slightly: The first estimates from Eurostat revealed that production in construction climbed 0.1 percent on a monthly basis in March, reversing a 1.2 percent fall in February.
Japan’s core inflation climbs to 3.5% in April: Japan’s core consumer prices were up 3.5% on year, exceeding expectations for an increase of 3.4% and up from 3.2% a month earlier.
Japan’s machinery orders rise in March: Japan’s core machinery orders rose 13.0% in March from the previous month. On a year-on-year basis, core orders grew 8.4 per cent
Japan’s export growth continues to decelerate for second consecutive month: Japan’s export growth continued to decelerate for the second consecutive month as the country grappled with the fallout from tariffs imposed by U.S. President Donald Trump.
South Korea's producer prices fall for first time in six months: South Korea’s producer price index (PPI) fell 0.1 percent in April from the previous month, marking the first decline since October 2024.
China cuts benchmark lending rates: The People's Bank of China cut benchmark lending rates for the first time since October. PBoC slashed its 1-year loan prime rate to 3% from 3.1%, while the five-year LPR was lowered by 10 basis points to 3.5%.

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3

India
Market data as on 23rd May 2025
India to surpass China in oil demand growth over next decade: Moody's Ratings has said that China drove global oil demand growth over the last decade, but now India is poised to take the lead in demand growth over the next decade.
Rupee recovers sharply against US dollar: Indian rupee snapped its three-day losing streak and settled for the day higher against the US dollar, on a sharp fall in the dollar index and surge in domestic equities, amid rise in risk appetite for riskier assets.
Piyush Goyal meets US Secretary for mutually beneficial India-US trade agreement: Traders took some encouragement as Union Minister of Commerce and Industry Piyush Goyal held a meeting with Howard Lutnick, the United States Secretary of Commerce, to discuss the prospects of a mutually beneficial trade agreement between the two nations.
'Omanisation' last key issue in conclusion of India-Oman FTA talks: Some support came with a report stating that the negotiations for the proposed India-Oman free trade agreement (FTA) are nearing conclusion with both sides discussing the last issue of the Gulf country's labour-related 'Omanisation' policy, as New Delhi wants the current regime to remain unchanged for its workers.
UK to accord non-discriminatory treatment to Indian firms: Traders took note of report that UK for the first time has agreed to accord non-discriminatory treatment to Indian companies in its public procurement system under the free trade agreement (FTA) between the two countries.

Indian equity benchmarks staged a strong recovery on Friday, with both the Nifty and Sensex closing near day’s high points, driven by positive global cues and robust buying in IT and FMCG stocks. Markets made a positive start and extended their gains throughout the session, amid heavy buying in blue-chip stocks. Additionally, the easing of U.S. Treasury yields, further boosted investors’ sentiments.

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4

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