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Havells India Q2 Review - Demand Resilient; Margins Likely To Sustain: Centrum Broking

Havells India Q2 Review - Demand Resilient; Margins Likely To Sustain: Centrum Broking

Workers assemble component for E-Lite LED 18 W Pride Plus lights on the production line of the light-emitting diode (LED) fixture assembly unit at the Havells India Ltd. (Photographer: Udit Kulshrestha/Bloomberg)
Workers assemble component for E-Lite LED 18 W Pride Plus lights on the production line of the light-emitting diode (LED) fixture assembly unit at the Havells India Ltd. (Photographer: Udit Kulshrestha/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Centrum Broking Report

Havells India reported healthy topline growth of 31% YoY at Rs 3,220 crore, 9%/10% above our/consensus estimates.

Cables outperformed, with sales rising 46% YoY to Rs 1,140 crore (20% volume and 80% value growth). Lighting grew 34% YoY to Rs 350 crore with volume growth surpassing value growth.

ECD, switchgears and Lloyd sales grew in 20-26% YoY range (50% volume and 50% price growth).

Gross margin declined 140 basis points QoQ to 34.3% due to commodity cost inflation. EBITDA margin fell 340 bps YoY to 13.8%, 30 bps/80 bps below our/consensus estimates.

Lower other income at Rs 33.3 crore (down 58% YoY due to a high base) led to 7% YoY fall in profit after tax to Rs 300 crore.

Havells expects healthy growth momentum in H2 FY22 due to festive season and demand pick-up from industrial, infrastructure and real estate sectors (unlike pent-up demand led growth last year). It aims to sustain margins despite input cost challenges due to better demand and price hikes.

Click on the attachment to read the full report:

Havells India Ltd - Q2FY22 Result Update - Centrum 21102021.pdf

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