Havells India - Rural Distribution Initiatives To Be Key Growth Driver Next Decade: ICICI Securities

ICICI Securities Report

Rural markets are just 5-6% of Havells India Ltd.'s consumer sales. With improving availability of electricity, India’s rural markets offer huge growth tailwinds to Havells.

In order to tap the opportunity, the company commenced Rural Vistaar project four years ago. It has resulted in expansion of its rural coverage to 3,000 towns (44% compound annual growth rate over FY19-FY22) with populations of 10,000-50,000 and availability of its products through 40,000 outlets (49% CAGR over FY20-FY22).

It has also commenced the rollout of Utsav stores to towns with populations of less than 10,000. After a pilot of more than 50 Utsav stores in FY22, the company plans to roll out 1,000 such stores in FY23.

We believe it is also focusing more on its -for-money brand REO to cater to the rural markets. We believe the benefits of these investments will pave the way for strong growth in next decade and will be discounted cash flow-accretive.

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