InvestorQ : What explains the sharp rise in the profits of Havells for the third quarter?
indhumathi Sayani made post

What explains the sharp rise in the profits of Havells for the third quarter?

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2 months ago
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After a few uneventful quarters, Havells was back in business in the Dec-20 quarter. Its Q3 PAT was sharply up 74.5% yoy at Rs.350 crore even as Havells reported 39.67% growth in sales revenues at Rs.3175 crore. Interestingly, there was growth across switch gears, lighting products, cables and electric consumer durables. Even the Lloyd consumer business division did a lot better.

Operating profits were up 108% at Rs.446 crore on the strength of higher revenues with lower advertisement costs. Consequently, operating margin expanded from 9.43% in the Dec-19 quarter to 14.04% in Dec-20 quarter. At the same time, the PAT margins also expanded from 8.83% to 11.03% on a yoy basis. Clearly, the financial traction was back as pent-up consumer demand picked up.

The company saw demand traction due to a construction and infrastructure action picking up. As a result, its largest unit of cables and electrical consumer durables saw strong growth on yoy basis as did switchgears and lighting fixtures. The Lloyd white goods business had been a big drag but even that managed a smart turn around in the quarter.

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