Views on Hitachi Home and Life Ltd 2QFY2016 Results: Angel Broking

Views of Mr. Milan Desai (Research Analyst - Mid Caps, Angel Broking) on Hitachi Home and Life Ltd 2QFY2016 Results:

2QFY2016 numbers disappoint on all fronts

"For 2QFY2016, the company reported disappointing set of numbers. The top-line declined by 1.2% yoy to INR 251cr, far lower than our estimate of INR 320cr. The muted performance can be attributed to lower realizations which had impacted some players in the industry on the back of excess inventory buildup. Operating expenses as a percentage of sales grew by 7.4% on yoy basis. This was due to 387bp yoy increase in raw materials as a percentage of sales to 63.5% and 398bp yoy increase in other expenses as a percentage of sales. As a result, the company reported operating net loss of INR 5cr. On account of higher depreciation and lower other income, the company reported a net loss of INR 11cr against estimated net profit of INR 6cr.

Although Hitachi Home has strong parental support in terms of technological support and is expected to benefit from consolidation of its operations (to Gujarat), the valuations remain expensive. Hence we maintain our NEUTRAL view on the stock."

Shares of HITACHI HOME AND LIFE SOLUTIONS (INDIA) LTD. was last trading in BSE at Rs.1480.15 as compared to the previous close of Rs. 1481.1. The total number of shares traded during the day was 11709 in over 1689 trades.

The stock hit an intraday high of Rs. 1502.65 and intraday low of 1466.15. The net turnover during the day was Rs. 17345886.

Source : Equity Bulls

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