Havells India’s standalone Q4FY18 sales increased by 48% yoy to Rs2,534.9cr from Rs1,710.2cr (adjusted for excise duty) in Q4FY17. Operating profit grew by 55.8% to Rs357.7cr from Rs229.6cr in Q4FY17, while EBITDA margin improved from 13.4% in Q4FY17 to 14.1% in Q4FY18. Net profit during the quarter increased by 138.4% yoy to Rs225.8cr vs. Rs94.7cr in Q4FY17.
• Excluding exceptional losses, net profit grew by 37% yoy to Rs234.8cr vs. 171.5cr in corresponding quarter of the previous year.
• Increase in sales was driven by 20% yoy growth in lighting and fixture segment to Rs322.7cr and 19.5% yoy growth in electric consumer durables (ECG) to Rs464.6cr. The growth in ECG was led by market share gains in fans (18% yoy in FY18), water heaters (10% yoy in FY18) as well as traction in appliances.
• Cables sales grew 13% yoy to Rs678cr, led by 6% volume growth and 7% value growth with improvement in both underground cables and domestic wires. The Q4FY17 sales figures are adjusted for excise duty.
• Sales from Lloyd consumer was Rs584cr during the quarter, while EBIT margin came in at 22%.
• There was a healthy growth in EBIT margin across all segments particularly in cables (17.1% in Q4FY18 vs 12.9% in Q4FY17) driven by the continuous efforts to market it as a branded product. Lighting and fixture (27.3% in Q4FY18 vs. 30.9% in Q4FY17) segment’s margin expansion was on account of year-end adjustments (e.g. warranty provisions written back). According to the company, in Lighting and fixture, FY18 EBIT margin of 29% is more sustainable.
• The company’s other expenses and employee cost declined as a proportion to sales, which led to increase in EBITDA and margin.
• Advertisement cost increased by 158.9% yoy to Rs104.6cr. This maybe on account of marketing expenses incurred for Lloyd ACs during peak season.
• Its cash balance was ~Rs1,530cr at FY18 end. Havells has planned a capex of Rs500cr in FY19, primarily for AC facility (Rs300cr), with a capacity of 600,000 units per year. The facility is expected to be completed in the next 12 months.
• The company has declared a dividend of Rs4 per share for FY18.
Havells India Ltd is currently trading at Rs. 548.80, up by 10.05 points or 1.87% from its previous closing of Rs. 538.75 on the BSE.
The scrip opened at Rs. 546 and has touched a high and low of Rs. 560 and Rs. 540.10 respectively. So far 44,40,570 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 100 DMA.
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