News: Havells reported revenue growth of 15% YoY (vs. I-direct estimate: +9%) to Rs.3652 crore. EBITDA margin came in lower by ~400 bps YoY to 12.1% (Vs I-direct estimate: 14%) mainly due to higher raw material costs. As a result PAT declined by 12% YoY at Rs.306 crore.
Views: Havells’ topline growth of 15% in Q3FY22 (two year CAGR of 27%) is encouraging. We believe, this would be largely driven by volume growth. However, delay in price hikes and restoration of advertisement expenditure dragged the overall EBITDA margin. We believe, industry wide price hikes (to the tune of 15%) would help recovery in the EBITDA margin going forward and revival in the real estate sector will be the catalyst for growth. We await management commentary on likely impact of price hikes on near term demand.
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