 "Havells India gains 3% on hopes of improvement in operational performance")
Shares of Havells India rose as much as 3.4 per cent to Rs 710.50 on the BSE on Friday on expectation of margin improvement in the July-September quarter (Q2FY21). The stock of the consumer durable company is trading close to its 52-week high level of Rs 717, touched on November 8, 2019.
In the past five days, the stock has rallied 7 per cent, after the company said it has decided to shift its switchgears production capacity from Guwahati location to its existing facilities at Baddi location in order to have benefits of synergy. Last month, on September 24, a leading fast‐moving electrical goods (FMEG) company -- Lloyd -- announced its entry into the refrigerator segment under its consumer durable brand. The refrigerators will be available in capacities ranging from 190 litres to 587 litres, and at an introductory offer price range from Rs 10,000 to Rs 84,990, it said.
For the July-September quarter (Q2FY21), Havells India’s electrical consumer durables (ECD) and Lloyd, which are largely B2Ccategories, should see 11.6 per cent and 20.2 per cent growth, respectively. Growth in ECD should be on the back of fans, water heaters and kitchen and appliances, while favorable base should elevate growth in Lloyd, Emkay Global Financial Services said in sector update.
Segments with elements of B2B such as switchgears, cables and wires and lighting and fixtures should see softness. Gross margin is expected to contract 211bps on a change in revenue mix, while lower employee, A&P and other operating expenses are expected to improve EBITDA at 12.1 per cent in Q2FY21, against 8.8 per cent in Q1FY21 and 10.5 per cent in Q2FY20, it said.
The ECD segment is likely to turn in growth (5 per cent YoY estimate) as demand momentum of June is likely to have sustained. Superior performance of LED TVs (industry-wide) is likely to aid growth for Lloyd (5 per cent estimate). For other segments, demand is likely to remain tepid with an estimate of 3-15 per cent YoY drop. In margins, Lloyd is likely to turn positive (-2.3 per cent YoY), whereas other segments are expected to dip owing demand headwinds, Edelweiss Securities said in Q2FY21 preview.
In the past five days, the stock has rallied 7 per cent, after the company said it has decided to shift its switchgears production capacity from Guwahati location to its existing facilities at Baddi location in order to have benefits of synergy. Last month, on September 24, a leading fast‐moving electrical goods (FMEG) company -- Lloyd -- announced its entry into the refrigerator segment under its consumer durable brand. The refrigerators will be available in capacities ranging from 190 litres to 587 litres, and at an introductory offer price range from Rs 10,000 to Rs 84,990, it said.
For the July-September quarter (Q2FY21), Havells India’s electrical consumer durables (ECD) and Lloyd, which are largely B2Ccategories, should see 11.6 per cent and 20.2 per cent growth, respectively. Growth in ECD should be on the back of fans, water heaters and kitchen and appliances, while favorable base should elevate growth in Lloyd, Emkay Global Financial Services said in sector update.
Segments with elements of B2B such as switchgears, cables and wires and lighting and fixtures should see softness. Gross margin is expected to contract 211bps on a change in revenue mix, while lower employee, A&P and other operating expenses are expected to improve EBITDA at 12.1 per cent in Q2FY21, against 8.8 per cent in Q1FY21 and 10.5 per cent in Q2FY20, it said.
The ECD segment is likely to turn in growth (5 per cent YoY estimate) as demand momentum of June is likely to have sustained. Superior performance of LED TVs (industry-wide) is likely to aid growth for Lloyd (5 per cent estimate). For other segments, demand is likely to remain tepid with an estimate of 3-15 per cent YoY drop. In margins, Lloyd is likely to turn positive (-2.3 per cent YoY), whereas other segments are expected to dip owing demand headwinds, Edelweiss Securities said in Q2FY21 preview.
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%