Havells India: Q4FY14 Result Analysis

The topline and the bottomline of Havells India has seen a growth of 12% and 25% respectively during Q4FY14 as compared to the same quarter of previous year. The growth in all the segments has helped the company to post a total revenue of Rs 1310 crore during the last quarter of FY14 as compared to Rs 1169.6 crore during Q4FY13. The income from the cable segment, which contributes around 43% of the total revenue, has grown by 21% on yearly basis for the quarter ended 31 March, 2014. The growth in cable segment was driven by the 27% growth in industrial cable and 14% growth in flexible cable in Q4FY14 as compared to Q4FY13. While the other segment such as switchgears (up by 24%), lighting & fixture (up by 15%) and electric consumer durable (up by 18%) have seen an upward trend for the quarter ended 31 March, 2014 as compared to the corresponding quarter of previous year. 

The company has posted an EBITDA of Rs 177.19 crore, reporting a jump of 18% on yearly basis in Q4FY14. The increase in foreign exchange earnings (up by 206% on YOY basis) and reduction in purchase of stock in trade (down by 35% on YoY basis) has helped the company to post a growth in EBITDA margin by 67 basis points on yearly basis. The margin grew but it was under pressure, this was due to increase in cost of raw material (up by 8%), employees cost (up by 33%) and other expenses (up by 20%) on yearly basis for the quarter ended 31 March, 2014.

Other than increase in topline, the increase in other income (up by 613% YoY basis) has helped the company to post a net profit of Rs 137 crore during Q4FY14 as against Rs 110 crore during Q4FY13. The net profit margin has improved by 107 basis points to 10.45% for the quarter ended 31 March, 2014 as compared to the corresponding quarter of previous year.

The company informed that, during the year the company has invested Rs 14.11 crore in joint venture named “Jiangsu Havells Sylvania Lighting company” with “Shanghai Yaming Lighting company” in China representing 50% of the total share of capital contribution. The company has also invested Rs 19.12 crore in its wholly owned subsidiary Havells Holdings.

The company has recommended a total dividend of Rs 15 per share for the fiscal year 2014. The scrip of the company is trading at a price to earnings (P/E) of 24.5x. The scrip opened at Rs 991.35 and closed at Rs 941.8 on BSE today, down by 2.46% from its previous close.