Havells India - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 1073 MCap: Rs. 67,149 crore)

Havells India reported a strong performance in Q4FY21 largely on a favourable base and structural shift & market share gains in favour of organised sector.

Q4FY21 Earnings Summary

- Havells revenues came in at ~Rs. 3331 crore up by ~50% YoY (largely in line with our estimate of Rs. 3288 crore) led by strong performance all product segments

- Electrical consumer durable and Lloyd business revenues grew by 71% and 29% YoY to Rs. 712 crore and Rs. 591 crore (largely in line with our estimate of Rs. 694 crore and Rs. 594 crore respectively)

- On the industrial product categories, revival in government and private capex drove revenue for cable and switchgear segments up by 51% and 53% to Rs. 1029 crore and Rs. 463 crore respectively

- The EBITDA margin came in higher by ~400 bps YoY to 15% and also ahead of our expectation of 13%. This was largely due to 120 bps higher gross margins during the period. This along with saving in employee and other costs by ~120 bps and 180 bps YoY respectively aids in margin expansion during Q4FY21

- The PAT came in at Rs. ~302 crore (Vs I-direct estimate: ~Rs. 262 crore) up by 70% YoY led by sales growth, strong margins and higher other income (up by 91% YoY to Rs. 37 crore)

Strong demand of industrial products, market share gains and increased penetration of consumer products in smaller towns helped Havells to record a strong set of numbers in Q4FY21. The gross margin expansion in Q4FY21 surprised us given a high raw material inflation during Q4FY21. For FY21, company reported revenue growth of 11% YoY to Rs. 10,428 crore despite sales losses in Q1FY21. The PAT came in higher by 42% YoY to Rs. 1040 crore led by ~400 bps expansion in EBITDA margin. Further company maintained its strong balance sheet position with Rs. 1438 crore net cash in the book in FY21. It also announced dividend of Rs. 3.5/share for FY21. We await management commentary on sustainability of the recovery in the Industrial business and outlook of consumer business going forward. While we maintain our positive stance on the stock the detailed Q4FY21 result update will be released post con-call.

Shares of HAVELLS INDIA LTD. was last trading in BSE at Rs.1072.65 as compared to the previous close of Rs. 1073.65. The total number of shares traded during the day was 92709 in over 3767 trades.

The stock hit an intraday high of Rs. 1087.95 and intraday low of 1065. The net turnover during the day was Rs. 99734686.

Source : Equity Bulls

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