Havells India down 7% after company misses June quarter estimates

Motilal Oswal maintained its neutral rating on Havells India post-June quarter results with a target price of Rs 800.

Havells India Ltd fell by about 5 percent on Monday. The electrical equipment manufacturer had on July 27 reported a 16.3 percent year-on-year (YoY) decline in June quarter consolidated profit on muted growth in key segments such as cables, lighting, and switchgear.


The company's profit fell to Rs 177.09 crore over the June quarter, down from Rs 211.2 crore reported for the year-ago period.

This year, the stock has underperformed benchmark indices so far. It is up nearly 2 percent in 2019, while on a yearly basis, the stock has risen a little over 14 percent.

Consolidated revenue grew by 4.5 percent YoY to Rs 2,717 crore for the June quarter, with its electrical consumer durables business showing a double-digit growth of 24 percent YoY.

The rest of its segments showed tepid growth. The company's switchgear business revenue rose half a percent, cables 3.8 percent and lighting and fixtures grew by 5 percent, contributing 69 percent of the total revenue for Q1.

Motilal Oswal maintained its neutral rating on Havells India post-June quarter results, with a target price of Rs 800.

"The domestic brokerage firm believes that the core portfolio performance may have been weak due to the liquidity crunch, elections in April-May, and perhaps, some spillover of the B2B business in the latter part of the year," a report said.

That said, the commentary and strategy on the Lloyd business will be eagerly looked at. With the AC season behind, inventory position in the Lloyd business, channel revamp and readiness to serve the market from domestic production in the new season will be the key, it said.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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