Havells, a leading electrical equipment and home appliances company in India, reported a net profit of ₹353 crore for the second quarter of the current financial year. This marks an 11% increase compared to ₹317 crore in the same period last year. The company’s revenue from operations rose by 35%, reaching ₹6,417 crore compared to ₹4,767 crore in the corresponding quarter of the previous year.
- Net profit increased by 11% to ₹353 crore in Q2.
- Revenue from operations grew 35% to ₹6,417 crore.
- EBITDA rose 30% to ₹576 crore, with a slight margin contraction.
- Switchgears and cables segments showed strong growth.
- Consumption remained steady despite high inflation.
What contributed to Havells’ revenue growth in Q2?
Havells saw significant growth across its business segments. Revenue from the switchgears business increased by 31% to ₹782 crore. The cable business experienced a 48% rise, reaching ₹2,999 crore. The lighting segment’s revenue grew by 7% to ₹449 crore, while electrical consumer durables brought in ₹1,072 crore. Lloyd, a subsidiary, contributed ₹614.50 crore, marking a 28% increase.
How did Havells perform in terms of operating profit?
The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 30% to ₹576 crore. However, the EBITDA margin slightly contracted by 30 basis points to 8.98%. This indicates that while the company earned more operating profit, the margin relative to revenue was a bit lower compared to the previous year.
What factors influenced Havells’ segment margins?
Havells reported that the cables segment faced margin pressure due to volatility in aluminium prices during the first half of the financial year. Despite this, the contribution margin for cables remained at 15%, which aligns with the long-term average. The rest of the portfolio’s contribution margins stayed stable year over year. Renewables margins improved thanks to a better product mix. However, lighting margins softened because of certain project orders, and Lloyd’s margins were subdued due to raw material inflation and under-absorption.
How did market conditions affect Havells’ performance?
According to the company’s investor presentation, consumption remained steady even with high inflation during the second quarter. The strong growth in switchgears was supported by a pickup in domestic demand and recovery in exports after disruptions in the first quarter. The cables segment benefited from commodity-linked price increases and a shift toward higher-sized cables. Lighting saw a pickup as prices stabilized.
What was the market reaction to Havells’ earnings announcement?
Following the earnings announcement, Havells’ shares rose by 1.76%, reaching an intraday high of ₹1,090. This positive market response reflects investor confidence in the company’s financial performance and growth prospects.
Overall, Havells demonstrated strong financial results in the second quarter, with notable growth in revenue and profit. The company managed to maintain steady consumption levels despite inflationary challenges and showed resilience across its key business segments.
