Earnings Review
High input cost drags Havells Oct-Dec PAT down 1.8% YoY
This story was originally published at 20:08 IST on 16 January 2025
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--Havells Oct-Dec net profit INR 2.83 bln
--Analysts saw Havells Oct-Dec net profit INR 3.47 bln
--Havells Oct-Dec net profit INR 2.83 bln vs INR 2.88 bln year ago
--Havells Oct-Dec revenue INR 48.43 bln vs INR 44.01 bln year ago
--Havells to pay INR 4 per share interim dividend
--Havells Apr-Dec net profit INR 9.67 bln vs INR 8.24 bln year ago
--Havells Apr-Dec revenue INR 152.14 bln vs INR 131.16 bln year ago
--Havells Oct-Dec cable sales INR 16.88 bln vs INR 15.73 bln year ago
--Havells Oct-Dec electrical durables sales INR 11.04 bln vs INR 9.61 bln
--Havells Oct-Dec Lloyd consumer sales INR 7.42 bln vs INR 6.47 bln year ago
--Havels Oct-Dec EBITDA INR 4.32 bln vs INR 4.33 bln year ago
--Havells Oct-Dec EBITDA margin 8.8% vs 9.8% year ago
--Havells: Commodity fluctuations impacted growth in wire segment
--Havells: Soft copper prices led to channel destocking in wires Oct-Dec
--Havells: Growth in domestic switchgear led by real estate, project segments
--Havells: Growth in industrial switchgear remained soft in Oct-Dec
--Havells: Lighting ops sales impacted due to LED price deflation
By Sunil Raghu
AHMEDABAD – Fluctuating commodity prices and rising input costs in Oct-Dec seems to given a reality check to the optimism shown by Havells India Ltd's management at the beginning of the quarter.
The electrical consumer durables, switchgear, cables and room air-conditioner business owner, who announced its Oct-Dec earnings today, said that the consumer demand trend was improving, aided by the festival season, even as infrastructure and industrial demand remained robust. While it said the right words, it missed the expected double-digit growth in its net profit and top-line, the street had expected.
Havells reported a net profit of INR 2.83 billion for Oct-Dec, down 1.8% on year from INR 2.88 billion. The analysts had estimated the net profit at INR 3.5 billion. Havells earned a revenue of INR 48.4 billion in Oct-Dec, a rise of 11% on year, but missed the street's expectation of INR 50.1 billion.
The other income of the company for the December quarter was INR 640.3 million, up 14.5% on year.
Total expenses of the company rose 12.3% on year to INR 45.6 billion in the December quarter. This was led by the cost of raw materials and components at INR 29.7 billion, up 20.8%. The purchase of traded goods increased nearly 21.9% on year to INR 7.2 billion. The advertisement and sales promotions expenses rose by 0.8% from a year ago to INR 1.8 billion. The company's finance costs during the quarter fell 7.9% on year to INR 93.9 million, while its tax costs were down 3.4% on year at INR 993.8 million.
The revenue of the company for Apr-Dec was INR 152.14 billion, up 16% on year. The net profit for the period was INR 9.7 billion, up 17.4%.
On Oct. 17, Anil Rai Gupta, the chairman and managing director of the company, in an analyst call post Jul-Sept earnings had said the December quarter had begun on a "positive note" ahead of the Diwali festival. "Spend and sales have started on a good note," he had said then.
However, now the company appeared a little circumspect. Announcing its Oct-Dec earnings, the company said that while commodity fluctuations had impacted its growth in the wire segment and resulted in moderate overall revenue growth, soft copper prices had led to channel destocking in wires. The growth in industrial switchgear remained soft during the quarter, while lighting operational sales were impacted due to LED price deflation.
Driven by improvement in consumer demand, the company saw a decent overall growth across segments. The company's revenue growth was led by sales from its cables and wires division. The company's electricals and consumer durables division reported a revenue of INR 11 billion, up 15% on year. The company also reported a 10.8% growth in its switchgear segment revenue, which rose to INR 5.8 billion.
Lloyd, the consumer durables brand of Havells, which sells air conditioners, washing machines, light-emitting diode televisions, and refrigerators, reported a net loss of INR 309.6 million for the quarter. However, the revenue from operations of the brand was INR 7.4 billion for the quarter, up 13.1% on year.
In the December quarter, Havells' earnings before interest, taxes, depreciation, and amortisation, or EBITDA, fell marginally by 0.2% on year to INR 4.3 billion, below analysts' estimates of INR 4.8 billion. Its EBITDA margin was 8.8%, lower than 9.8% in the December quarter year ago.
On Thursday, shares of Havells closed at INR 1,558.25 on the National Stock Exchange, up 2.05%. End
Edited by Akul Nishant Akhoury
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