Havells India Q2 Results: Profit Up Nearly 8% But Misses Estimates

Havells India Ltd.'s profit rose during the three-months ended Sept. 30, 2024, but fell short of analysts' estimates. The electrical equipment maker's bottom line rose 7.5% year-on-year to Rs 268 crore during the second quarter, according to an exchange filing on Thursday. That compares with the Rs 335-crore consensus estimate of analysts polled by Bloomberg.

Revenue from operations rose 16% on a yearly basis to Rs 4,539 crore during the period.

Margins were impacted as the purchase of traded goods surged by 55%, while inventories rose 60% and employee expenses climbed 21%, adding pressure to costs. However, a 77% increase in other income provided some offset, partially cushioning the overall margin decline.

• Revenue up 16.4% to Rs 4,539 crore. (Bloomberg estimate: Rs 4,424 crore).

• Ebitda up 0.5% to Rs 375 crore (Bloomberg estimate: Rs 465 crore).

• Margin at 8.3% versus 9.6% (Bloomberg estimate: 10.50 %).

• Net Profit up 7.5% to Rs 268 crore (Bloomberg estimate: Rs 335 crore).

High volatility in commodity prices impacted contribution margins, particularly in cable segment. Festive season shift led to advancement of A&P spends to the second quarter. There was decent growth in switches and domestic switchgear. However, industrial switchgear growth was impacted by higher base due to large institutional orders last year.

Strong volume growth in the cable segment was predominantly driven by wire, which was also aided by spillover from the first quarter destocking. Robust volume growth sustained in lighting, with the pricing gradually stabilising. There was broad-based performance in ECD as festive season-led demand pickup supported fans, SDA and water heater growth.

Emerging categories in ‘others’ segment continue to improve scale. There was healthy performance by Lloyd in a non-seasonal quarter.