Havells India , a leading electrical equipment manufacturer, has reported a mixed performance in its latest quarterly results, with revenue growth falling short of expectations but net profit surpassing estimates.

Financial Highlights

Havells India has delivered a strong performance in terms of profitability, with its net profit rising to ₹319.00 crore, marking a significant 19.00% increase from ₹268.00 crore in the same quarter last year. This result exceeded analyst estimates of ₹305.00 crore, showcasing the company's ability to outperform market expectations in terms of bottom-line growth.

Revenue Growth and Market Position

The company's revenue grew to ₹4,779.00 crore, up from ₹4,539.00 crore in the corresponding quarter of the previous year, representing a 5.30% increase. However, this growth fell short of analyst estimates by 2% and consensus estimates by 1%. The revenue miss was primarily attributed to a steeper-than-expected decline in summer products, with the ECD (Electrical Consumer Durables) segment dropping 1.8% YoY and Lloyd declining 18.5% YoY.

Segment Performance

Despite the challenges in consumer-oriented segments, Havells India saw positive momentum in its B2B infrastructure products:

• Switchgears grew by 8.0% YoY
• Cables and wires expanded by 12.4% YoY

These segments helped offset some of the weakness in consumer products.

Operational Efficiency

Havells India's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) saw a substantial increase, rising to ₹438.00 crore from ₹375.00 crore in the year-ago period. This 16.80% growth in EBITDA demonstrates the company's improved operational efficiency and cost management strategies. However, it's worth noting that the EBITDA figure fell slightly short of the estimated ₹455.00 crore.

Margin Improvement

The EBITDA margin showed notable improvement, increasing to 9.17% from 8.26% in the same quarter last year. This 91 basis points expansion in margin reflects the company's ability to enhance profitability despite challenging market conditions. However, the margin remained below the estimated 9.50%, suggesting there may still be room for further optimization.

Analyst Outlook

Yes Securities has maintained its 'Add' rating on Havells India stock. The brokerage firm expects normalcy to return from Q4 onwards, indicating potential improvement in the company's performance in the coming quarters.

Conclusion

Havells India's Q2 results present a mixed picture, with strong profit growth but revenue falling short of expectations. The company's ability to grow its B2B segments and improve profitability demonstrates its resilience in a challenging market environment. While the consumer segments faced headwinds, the overall performance and positive analyst outlook suggest that Havells India remains well-positioned in the electrical equipment sector.

Investors and market watchers may view these results with cautious optimism, considering the company's ability to deliver profit growth despite revenue challenges. The expectation of normalcy returning in Q4 provides a potential catalyst for future growth.

Havells India Limited , a leading electrical equipment manufacturer, has reported a mixed set of financial results for the second quarter. The company saw an increase in both profit and revenue, as per the unaudited consolidated financial results.

Key Financial Highlights

Revenue Performance

Havells India reported a consolidated net revenue of Rs. 4,767.00 crores for Q2, marking a 5.2% increase from the same quarter last year. This growth was observed across most of its business segments, with the cables segment showing particularly strong performance.

Profitability

The company's net profit for the quarter stood at Rs. 317.00 crores, up by 16.5% compared to the previous year. EBITDA also showed significant improvement, rising by 16.3% to Rs. 442.00 crores. The EBITDA margin improved to 9.3% from 8.4% in the previous year.

Segment Performance

Havells India's performance across various segments for Q2 was mixed:

• Cables: Showed strong performance with 12.4% revenue growth and improved margins.
• Lloyd Consumer: Faced challenges with an 18.5% revenue decline due to weak summer demand and higher channel inventory.
• Electrical Consumer Durables: Declined by 1.8%, primarily due to weakness in fans and air coolers.

Other Notable Points

1. The company's other income included Rs. 45.27 crores from asset sales following the relocation of the switchgear business.

2. For the half-year period, net revenue declined 1.2% to Rs. 10,204.00 crores with net profit down 2% to Rs. 670.00 crores.

3. Havells India maintained cash and cash equivalents of Rs. 1,449.00 crores.

4. The company invested Rs. 600.00 crores in acquiring a stake in Goldi Solar during the quarter, a strategic move to accelerate growth in the renewable energy sector.

Performance Overview

The results suggest that Havells India has managed to improve its profitability despite challenges in certain segments, particularly in the Lloyd Consumer division. The company's strong performance in the cables segment and improved EBITDA margins indicate resilience in its core business.

The strategic investment in Goldi Solar and the company's ability to maintain a strong cash position demonstrate a focus on long-term growth and financial stability.