India’s leading fast-moving electrical goods company, Havells India posted its September quarter (Q2FY22) results on Wednesday, 20 October 2021.
The company’s standalone revenues (topline) stood at ₹3,221 crore, up 31% year-on-year. Due to increasing commodity prices, the company’s operating margins went down to 13.7%, as against 17.2% in the same quarter last year. Its standalone net profit also showed a negative growth of 7% year-on-year and stood at ₹302 crore.
One-third of Havells India’s revenues come from the Cables segment, which grew 46% year-on-year. Despite the strong revenue growth, margins were impacted on account of high commodity prices.
Similarly, the Lighting & Fixtures segment, which is one of its high-margin businesses, grew 34% year-on-year.
Owing to a highly competitive environment, the company’s subsidiary Lloyd couldn't increase the prices of its products. Further, overhead margins were impacted on account of lower production.
In spite of the increase in commodity prices, which kept the pressure on company’s margins, all the verticals of Havells showed a strong performance in the current quarter.
According to the company, the outlook for demand looks strong and margins can improve going forward.
In the current financial year, the company's share price has risen by 33%. On the other hand, the Nifty50 index has risen by almost 24%, which shows that Havells India has outperformed the Nifty50.
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