Havells India released its earnings for the first quarter of FY24 and witnessed sluggish consumer demand, along with unseasonal rains impacting sales of cooling products.

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Lloyd Consumer, with 27 revenue contribution to Havells India, saw its revenues jump 20 percent year on year to Rs 1,311 crore. However, the net loss widened to Rs 62 crore in Q1-FY24 versus Rs 56 crore in Q1-FY22 and Rs 23 crore in Q4-FY23.

The company said, Lloyd's volume growth was same as value growth and that the company shall continue investing in Lloyd as lower capex requirement and better profitability in Lloyd should result in better return on capital employed. Havells acquired the Lloyd brand in 2017 and entered the large- appliance segment.

Anil Rai Gupta, Chairman and Managing Director at Havells India said "we are going out of the steep discounts phase to build a brand for Lloyd". He further added that Lloyd is witnessing market share gains.

Havells India's total revenues rose 14 percent to Rs 4,834 crore versus Rs 4,244 crore in the same quarter of last year. Earnings before interest, tax, depreciation and amortisation (EBITDA) is 11 percent higher at Rs 403 crore versus Rs 362 crore year on year. EBITDA margins are flat at 8.3 percent.

The cables segment with 30 percent revenue contribution to company, witnessed 24 percent jump in sales and 400 bps improvement in margins. The lighting segment with 7 percent revenue contribution saw flat sales during the quarter at Rs 371 crore and margins declined to 14 percent from 16.4 percent same quarter last year.

HDFC Securities expects Havells to have a strong performance in the second half of FY24, given sustained tailwinds from the B2B portfolio and the return of B2C demand on softening inflation. The brokerage cuts FY24 and FY25 earnings by 4 percent and 1 percent respectively to reflect weak margin

performance, which is largely reflected in Lloyd.

Shares of Havells India are trading 3 percent lower on NSE on July 21.

First Published:Jul 21, 2023 2:06 PM IST