Margins have been under pressure with elevated commodity costs for Havells | Q3 FY22 Conference Call Highlights

2 min read
  • Sales grew 13% on QoQ and 15% YoY basis while net profit grew 1% on QoQ basis while -13% on YoY basis.
  • Operating margins at 12% this quarter while it was 13.7% in the last quarter, primarily affected by inflation.
  • 15% revenue growth over last year with a 27% CAGR over 2 years
  • Contribution margin for switchgears (39.8%), cable (14.1%), lighting and fixture (33.8%), Electrical consumer durable (ECD) is (22.3%) and Others (18.7%).
  • Festive demand was encouraging, however demand tapered in later part of Q3, owing to high inflation and then omicron scare
  • Margins have been under pressure with elevated commodity costs and partial transition in pricing especially in consumer durables
  • Advertising and promotion, as planned, reverted to normalized levels against last year
  • Switchgear benefiting from new construction and range expansion
  • Higher commodity prices contributed growth in Cable & Wires
  • Consumer Lighting, a healthy mix of volume and value growth
  • Appliances led the growth in ECD with strong festive demand
  • Industrial and Infrastructure showing signs of revival
  • Lloyd was adversely impacted owning to low season and price hikes being deferred due to competitive intensity
  • Capex planned for FY22 is 250-275 Crore.
  • Crabtree brand deals with the architectural demand. Sales have been around Rs 250- 300 Cr.
  • Standard brand deals with the contractor segment. Here the sales are Rs 600- 700 Cr. In the next 2 years planning to do Rs 1000 Cr sales.
  • Consumer Durable- Lloyd segment will take 2 to 3 years to stabilise. Current market share in this segment is near 10% which was 8% when the company acquired the Lloyd brand.

Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell stocks or MF.

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