Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

<ul>
<li>We believe <a href="https://www.smartkarma.com/entities/havells-india-ltd" target="_blank" data-smartkarma-citation="entities:9158:1" rel="noopener">Havells India (HAVL IN)</a> has chosen the route of instant gratification by not increasing prices and gaining market share for Lloyd this AC Season. </li>
<li>After-Sales Service and aspirational value for the Lloyd brand is poor, there is no brand loyalty in the segments Lloyd operates in and is price sensitive. </li>
<li>Increased prices and course correction by  <a href="https://www.smartkarma.com/entities/voltas-ltd" target="_blank" data-smartkarma-citation="entities:19924:1" rel="noopener">Voltas Ltd (VOLT IN)</a> could result in HAVL giving up some of its recent market share gains building a stronger Bear case for HAVL. </li>
</ul>


We believe Havells India (HAVL IN) has chosen the route of instant gratification by not increasing prices and gaining market share for Lloyd this AC Season. 
After-Sales Service and aspirational value for the Lloyd brand is poor, there is no brand loyalty in the segments Lloyd operates in and is price sensitive. 
Increased prices and course correction by  Voltas Ltd (VOLT IN) could result in HAVL giving up some of its recent market share gains building a stronger Bear case for HAVL. 


Havells India (HAVL IN) | Instant Gratification?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/voltas-ltd" target="_blank" data-smartkarma-citation="entities:19924:1" rel="noopener">Voltas Ltd (VOLT IN)</a> had a brutal Q4FY24 especially for its UPC segment where it lost market share to rival <a href="https://www.smartkarma.com/entities/havells-india-ltd" target="_blank" data-smartkarma-citation="entities:9158:1" rel="noopener">Havells India (HAVL IN)</a>.  </li>
<li>There is a possibility of regaining some of the lost market share with some pricing interventions and high brand equity, however, it will be at cost of margins. </li>
<li>The sector view remains bearish, however, relative to HAVL, the downside would be limited with market share gains in Air-Conditioners (ACs) as key monitorable. </li>
</ul>



Voltas Ltd (VOLT IN) had a brutal Q4FY24 especially for its UPC segment where it lost market share to rival Havells India (HAVL IN).  
There is a possibility of regaining some of the lost market share with some pricing interventions and high brand equity, however, it will be at cost of margins. 
The sector view remains bearish, however, relative to HAVL, the downside would be limited with market share gains in Air-Conditioners (ACs) as key monitorable. 


Voltas Ltd (VOLT IN) | Expected to Fight Back

<ul>
<li>The overall Air Condition (AC) season has been good, with volumes up by more than +20% compared to the last two years.</li>
<li>
<a href="https://www.smartkarma.com/entities/daikin-industries-ltd" target="_blank" data-smartkarma-citation="entities:16696:1" rel="noopener">Daikin Industries (6367 JP)</a> &amp; <a href="https://www.smartkarma.com/entities/voltas-ltd" target="_blank" data-smartkarma-citation="entities:19924:1" rel="noopener">Voltas Ltd (VOLT IN)</a> have performed below expectations with stiff pricing and poor dealer support. </li>
<li>
<a href="https://www.smartkarma.com/entities/havells-india-ltd" target="_blank" data-smartkarma-citation="entities:9158:1" rel="noopener">Havells India (HAVL IN)</a> (Lloyd) market share gain is on the back of lower prices. The focus has moved from premiumizing brand &amp; expanding margins to gaining market share. </li>
</ul>


The overall Air Condition (AC) season has been good, with volumes up by more than +20% compared to the last two years.

Daikin Industries (6367 JP) &amp; Voltas Ltd (VOLT IN) have performed below expectations with stiff pricing and poor dealer support. 

Havells India (HAVL IN) (Lloyd) market share gain is on the back of lower prices. The focus has moved from premiumizing brand &amp; expanding margins to gaining market share. 


India Channel Insight #36 | Daikin, Havells, Voltas

Thematic (Sector/Industry)

<ul>
<li>This insight provides select Industry-wise highlights from the 59 checks, across 5 sectors and 14 industries that we did in Q4 (Jan 2022 to March 2022).</li>
<li>The objective of the checks is to understand the underlying business narrative not to forecast the coming quarter and hence the limited sample sizes. </li>
<li>These checks are used as a tool to identify areas of discrepancy between management commentary and ground reality that could be the subject of future deeper dives. </li>
</ul>


This insight provides select Industry-wise highlights from the 59 checks, across 5 sectors and 14 industries that we did in Q4 (Jan 2022 to March 2022).
The objective of the checks is to understand the underlying business narrative not to forecast the coming quarter and hence the limited sample sizes. 
These checks are used as a tool to identify areas of discrepancy between management commentary and ground reality that could be the subject of future deeper dives. 


India Channel Insight | Q4 Report Card | 59 Checks Across 5 Sectors

<ul>
<li>We interact with channels of <a href="https://www.smartkarma.com/entities/mahindra-mahindra-ltd" target="_blank" data-smartkarma-citation="entities:16441:1" rel="noopener">Mahindra &amp; Mahindra (MM IN)</a> , <a href="https://www.smartkarma.com/entities/bajaj-electricals-ltd" target="_blank" data-smartkarma-citation="entities:9615:1" rel="noopener">Bajaj Electricals (BJE IN)</a> &amp; <a href="https://www.smartkarma.com/entities/havells-india-ltd" target="_blank" data-smartkarma-citation="entities:9158:1" rel="noopener">Havells India (HAVL IN)</a> with an objective to understand sources of stress in rural India. </li>
<li>Price increases, lack of savings and irregular rural cash flows are taking a toll on Tractor Sales. </li>
<li>In durables, there are no signs of recovery, with lower prices being the only catalyst that would bring back volumes. </li>
</ul>


We interact with channels of Mahindra &amp; Mahindra (MM IN) , Bajaj Electricals (BJE IN) &amp; Havells India (HAVL IN) with an objective to understand sources of stress in rural India. 
Price increases, lack of savings and irregular rural cash flows are taking a toll on Tractor Sales. 
In durables, there are no signs of recovery, with lower prices being the only catalyst that would bring back volumes. 


Channel Insight #26 | M&M (Tractors), Bajaj Electricals (Murphy Richards), Havells

India

Havells India Limited manufactures electrical products. The Company's products include building circuit protection equipment, industrial switchgears, energy meters, cables & wires, modular switches, fans and lighting products.

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Havells India (HAVL IN)