Havells India share price slips 10% on the back of weak margins and profit during Q2FY22

On the back of weak margins and net profit during the second quarter of the financial year 2021-22 (Q2FY22), the shares of the consumer electronics company — Havells India slipped 10 per cent to hit a day’s low level of Rs 1264.85 per share on the BSE intraday trade on Thursday.  

EBITDA (earnings before interest, tax, depreciation and amortisation) margin of Havells India dipped 338 basis points (bps) year-on-year (YoY) to 13.8 per cent, on the back of higher raw material costs. Similarly, the company’s net profit also tumbled by 7 per cent YoY at Rs 302 crore in Q2FY22. 

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The consumer electronics company said that the contribution margins have been sustained on a quarter-on-quarter (QoQ) basis though cost pressure remains significantly high.  

"Continued volatility in commodity prices impacted cable margins. Adequate price increase in Lloyd has been challenging due to the hyper competitive environment. Margins were further impacted by under absorption of overheads due to lower production," the company said. 

The mid-cap company, however, reported a strong 31 per cent YoY revenue growth at Rs 3,221 crore, amid healthy performance from the cable, switchgear, electrical consumer durable segments. While itreported total expenses at Rs 2,866.54 crore, up 35.60 per cent during Q2FY22 as against Rs 2,113.92 crore in Q2FY21. 

At around 02:33 pm, the stock has been trading around 9 per cent lower at Rs 1,281 per share on the BSE, as compared to a 0.78 per cent decline in the S&P BSE Sensex. Despite today’s fall, the stock has rallied 82 per cent in the past one year against a 50 per cent surge in the benchmark index. 

The counter had touched a 52-week high of Rs 1,503.70 per share on October 18,2021 and a 52-week low of Rs 700.15 per share almost a year ago on October 20, 2020.