Havells India misses Q2 profit view on lower demand, surging expenses

Voltas

17/10/2024 11:00

Oct 17 (Reuters) - Home appliances maker Havells India  HVEL.NS  reported a smaller-than-expected rise in
second-quarter profit on Thursday, due to lower demand for its air conditioners and fans on account of the monsoon
season and higher expenses. 
    Profit rose nearly 10% from a year earlier to 2.73 billion rupees ($32.5 million) for the three months ended Sept.
30, but fell short of analysts' expectations of 3.24 billion rupees, according to data compiled by LSEG.  
    Total expenses rose 18% year-on-year to 42.58 billion rupees.
    The company's revenue from operations rose 16% to 45.33 billion rupees in the quarter.
    For further earnings highlights, click  urn:newsml:reuters.com:*:nFWN3LT0CB
    
KEY CONTEXT
    The September quarter is seasonally the weakest as demand runs dry post-summer, analysts at HDFC Securities said in
a note this month, adding that weak consumer sentiment from inflationary pressures also negatively impacted demand.
    Copper and aluminium prices-key raw materials for cables and wires-saw high volatility in prices, which impacted
contribution margins and increased expenses in the second quarter, the company said.
    Havells India, the biggest among its peers by market capitalisation, is the first to report second-quarter results.
    
PEER COMPARISON 
    
                                    Valuation (next 12      Estimates (next 12         Analysts' sentiment          
                                          months)                months)                                        
                           RIC      PE    EV/EBI  Price/   Revenue      Profit     Mean     # of     Stock to     Div
                                           TDA    Sales   growth (%)  growth (%)  rating*  analyst    price      yield
                                                                                              s      target**     (%)
     Havells India       HVEL.NS   65.19  44.39    5.18     15.46       25.35      Hold      20        1.01       0.46
   Crompton Greaves      CROP.NS   39.99  26.90    2.70     12.80       29.35       Buy      32        0.87       0.71
 Consumer Electricals                                                                                           
        Voltas           VOLT.NS   60.22  46.36    2.79     17.86       69.88      Hold      33        1.18       0.29
       Blue Star         BLUS.NS   59.65  39.78     --      20.02       32.97       Buy      17        1.21       0.35
 
    
* The mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above
the PT
    
    
JULY-SEPTEMBER STOCK PERFORMANCE
    
    
-- All data from LSEG
    
-- $1 = 84.0280 Indian rupees

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JULY-SEPTEMBER STOCK PERFORMANCE    https://tmsnrt.rs/3U8Etan
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 (Reporting by Ashna Teresa Britto; Editing by Abinaya Vijayaraghavan)
 ((AshnaTeresa.Britto@thomsonreuters.com;))