Havells India zooms 12% on strong December quarter earnings; brokerages remain mixed

Updated : January 21, 2021 01:13 PM IST

The firm's consolidated net profit rose 74.52 percent To Rs 350 crore in Q3 against Rs 200 crore in the year-ago period.

Havells' total expenses were at Rs 2,744.72 crore as against Rs 2,064.24 crore, up 32.96 percent.

Shares of Havells India surged 12 percent to hit its 52-week high on Thursday after the stock posted better than expected earnings for the December quarter. The firm's consolidated net profit rose 74.52 percent To Rs 350 crore in Q3 against Rs 200 crore in the year-ago period.

Its revenue from operations was also up 39.67 percent to Rs 3,175.20 crore during the period under review as against Rs 2,273.29 crore in the corresponding period last fiscal, the company said. Havells' total expenses were at Rs 2,744.72 crore as against Rs 2,064.24 crore, up 32.96 percent.

The stock rose as much as 12.1 percent to its 52-week high of Rs 1,144 per share on BSE.

The management said the encouraging business performance with secular growth across divisions and regions was led by improvement in consumer sentiment, festive season and reduction in Covid-19 cases and increased penetration in smaller towns and a higher rural reach. The supply chain disruption faced by suppliers with high import dependence has further supported market share gains, it added.

However, brokerages were mixed on the stock despite strong earnings. While UBS had a 'neutral' call on the stock, CLSA retained a 'sell' rating.

As per UBS, the strong growth is sustaining on the back of market share gains. It added that the risk-reward is balanced, which keeps them neutral on the stock. The brokerage further noted that the stock price has surged over 120 percent from March lows on the back of a strong demand scenario and market share gains.

Meanwhile, CLSA said, "Havells reported a strong 3Q beat, with sales, Ebitda and earnings growth of 39 percent, 89 percent, and 75 percent, respectively. The company has continued its market share gain journey, with strong 40 percent growth of its consumer and residence portfolio and a recovery in its industrial and infrastructure portfolio (mid-teen growth). Controlled media spending, cost optimisation and operating leverage aided 410 bps of margin expansion to 16 percent."

Meanwhile, the company's board of directors has declared an interim dividend of Rs 3 per equity share of Re 1 each i.e. at 300 percent on the equity share capital of the company. The company has fixed January 29, 2021, as the record date for ascertaining the eligibility of shareholders for payment of interim dividend.

Published : January 21, 2021 01:13 PM IST

Havells India zooms 12% on strong December quarter earnings; brokerages remain mixed

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