ALSO READSensex gains 348 pts, Nifty ends at 10,096; RIL up 4% ahead of Q2 earnings Markets pare entire gains; Sensex down 90 points, Nifty ends below 10,000 Nifty ends at record high on negative market breadth, Sensex up 250 points Markets end at record highs; Nifty closes above 10,200 for first time ever Sensex, Nifty end flat as investors on edge ahead of Q2 earnings season
Net profit of the company during the quarter under review grew 9% to Rs 159 crore against Rs 146 crore in the corresponding quarter of previous fiscal.
“The transition to Goods and Service Tax (GST) regime which led to the decline in primary off take starting May 2017, continued its impact on the business during the quarter,” Havells India said in a press release.
We believe that GST would render long term benefits though currently it is disruptive in impact. We are experiencing slowdown in demand due to perceived higher pricing of electrical products and slower primary re-stocking post GST de-stocking in June, it added.
Analysts at IIFL Institutional Equities, trim Havells’ FY19/20ii EPS by 6/4%, to factor near term weakness in demand from housing sector and GST impact.
“Havells India had sacrificed margins to gain market share during demon (2HFY17). However, a reversal in the approach post-GST should help profitability to recover, despite lower sales. Though Lloyds’ margins were optically impressive in 2QFY18, Havells India does not expect the gains to sustain for FY18,” the brokerage firm said in company update.
At 11:48 am, the stock was down 5% at Rs 513 on the BSE, as compared to 0.24% rise in the S&P BSE Sensex. A combined 2.65 million shares changed hands on the counter on the BSE and NSE so far.
However, in past three months, the stock had outperformed the market and gained 17% against 1.5% rise in the benchmark index till Monday.