Havells India: Switch It On

DSIJ Intelligence / 23 Jan 2013

Havells India came out with better results for the third quarter of the present fiscal.

Remember the Jingle “Shock Laga Laga Laga Shock Laga” it was from the commercial of Havells. But to investors rejoice the company has not shocked the investors with its results. But as per its mission, it has not given any shock in Q3FY13 results. Havells India came out with better results for the third quarter of the present fiscal. The topline grew by 18% on a YoY basis for Q3FY13 to stand at Rs 1058 crore as against Rs 896 crore for Q3FY12. The bottomline witnessed a growth of 20% on a YoY basis to stand at Rs 95 crore as against Rs 79 crore for Q3FY12. The icing on the cake apart from the better results, the company has also declared a dividend of Rs 6.50 per share.

Particulars (Rs/Cr)Q3FY13Q3FY12Change %
Revenue 1,058 896 18%
Operating Profit (EBIDTA) 140 126 11%
Profit before tax 117 97 21%
Profit after tax 95 79 20%
The EBITDA margins witnessed some pressure, which went down by 82 basis points on a YoY basis and the net profit margins witnessed an improvement of 16 basis points on a YoY basis. The advertisements spend for water heater & appliances were high during current quarter. The expenditure stood at 3.5% in current quarter as compared to 2.9% in Q3FY12. Depreciation went up to Rs 14.6 crore for Q3FY12 as against Rs 10.4 crore for Q3FY12. The interest cost went down to Rs 5.8 crore for Q3FY12 as against Rs 7.5 crore for Q3FY12.

Let us take a look at the segment wise results:

Segment (Rs/Cr)Q3FY13Q3FY12Change %
Switchgear 269.7 226.1 19%
Cable 408.5 390.7 5%
Lighting & fixtures 177 144.8 22%
Electrical Cons. Durables 203.2 134.6 51%
Total 1058.4 896.2 18%

Segment (% Contribution to topline)Q3FY13Q3FY12
Switchgear 25 25
Cable 39 44
Lighting & fixtures 17 16
Electrical Cons. Durables 19 15
Total 100 100
On the segment-wise performance, it can be said that the company has witnessed some shift in the revenue mix on a YoY basis. The electrical consumer durables contributed 19% as against 15% on a YoY basis.

The cable division has grown by 5% during the quarter owing to the decline of 11% in industrial cable division on a YoY basis due to slower industrial and commercial activities.Continued growth momentum in electrical consumer durables due to growth in sales of fans by 30% and improved acceptance of newly launched domestic appliances.

The market has reacted positively to the results and the scrip which was trading down by more than 3% is now down only by 0.80%. We are of the view that the company is a player for a long term and if you are holding it then stick to it for longer term.

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