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ICICI Direct Report
Strong demand for room AC and switchgear drives Havells India Ltd.'s revenue in Q4.
Revenue up ~10% YoY to ~Rs 4850 crore led by ~32% and ~27% revenue growth in Lloyd and switchgear segment, respectively.
Havells Indiaá gross margin increased 115 basis points YoY to ~31% supported by lower raw material cost and change in product mix. However, higher advertising and promotion spends (up by 59% YoY) dragged Ebitda margin down by 85 bps YoY to ~11%.
Profit after tax marginally up by ~3% YoY to ~Rs 362 crore tracking revenue growth.
Key triggers for future price performance:
Total ~1 crore new houses under Pradhan Mantri Awas Yojana, urbanisation and rising aspiration level will give a significant boost to demand for home appliances.
Revival in the Lloyd business through new launches and improvement in segment margin.
It aims to increase its town penetration from current 1150 to 2000 and retail touch points from 1.6 lakh to 2.5 lakh over the next five years.
Model revenue, earnings compound annual growth rate of ~13% and 31%, respectively, in FY23-25E.
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