- 20 Jan 2023
- ICICIdirect Research
HAVELLS' Q3FY23 PERFORMANCE MOSTLY IN LINE WITH OUR ESTIMATES
HAVELLS - 1569 Change: 2.60 (0.17 %)News: Havells reported revenue growth of ~13% YoY to Rs 4119.7 crore led by strong growth in cables and Lloyd segment. On a three-year basis, revenue increased at a CAGR of 22%. Gross margin improved 72 bps YoY (up 212 bps QoQ) to 33% as a result of stabilising raw material prices. However, as a result of increased employee and other expenses, EBITDA margin declined 177 bps YoY (up 246 bps QoQ) to 10.3%, which is in line with our estimates. PAT came in at ~Rs 283.9 crore, down 7.2% YoY due to lower EBITDA
Views: We believe Havells reported an encouraging three-year revenue CAGR of 22% led by cables and Lloyd segment. Revenue growth in Q3FY23 was mainly volume driven. The ECD segment saw a lower revenue growth due to slower offtake in fans amid transition to new BEE norms. Switchgears and lighting segment also faced lower revenue growth due to subdued retail demand. On the margins front, there was a recovery in margins in the cable segment as a result of liquidation of high-cost inventory and stabilising raw material prices. Lloyd segment margins continue to remain affected due to high-cost inventory in the system
Impact: Positive