Havells' revenue grew ~14% YoY to Rs 3668.9 crore in Q2FY23 led by cables segment and Lloyd business. EBITDA margin declined 595 bps YoY to 7.8% due to fall in gross margin by ~337 bps. PAT came in at Rs 186.9 crore, down by 38% YoY.
We believe Havells has reported an encouraging 18% revenue CAGR over the past three years. However, gross margin was impacted by the high cost of inventories and the passing on of lower commodity prices at the same time. EBIT level margins were particularly impacted for the cables segment and Lloyd business as a result. Due to destocking in fans as a result of compliance with BEE norms, ECD revenues were also impacted. We await commentary from management for future margin guidance.
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