Havells India's Q2 Net Profit Surges by 33% to ₹249 Cr

Havells India share price dropped over 2% to reach ₹1,330 in early trade on October 20, after its financial results for the second quarter of 2024. Havells India reported a notable 33% year-on-year (YoY) increase in net profit, reaching ₹249.08 crore for the second quarter. In the same period the previous year, the company had posted a net profit of ₹187.01 crore. In terms of revenue, the appliance maker declared a 6% YoY rise in consolidated revenue from operations, amounting to ₹3,900 crore. This marked an increase from ₹3,679 crore during the same period the prior year. Revenue from specific segments within the company also exhibited varied performance:

•    The switchgear segment reported a strong 9% YoY growth, totaling ₹532 crore, largely driven by infrastructure and construction projects.

•    Revenue from cables posted an 8% YoY growth, reaching ₹1,470 crore, supported by ongoing infrastructure initiatives.

•    However, revenue from Electrical Consumer Durables witnessed a 5% YoY decline, totaling ₹733 crore, due to pressure on demands.

Havells India's EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) saw an increase of 30.2%, reaching ₹373.3 crore in the second quarter of FY24. This was an improvement from the ₹287 crore recorded during the same period in the previous fiscal. EBITDA margin for the reporting quarter improved to 9.6%, up from 7.8% in the corresponding period of the previous fiscal.

Market Outlook & Stock Performance

Havells India reported softness in consumer demand during the July-to-September quarter. However, the company remains optimistic for the upcoming festival season. The growth was primarily driven by the housing segment and the government's continued focus on infrastructure projects.

In the past month, Havells India's stock price dropped by 5%. Over the last six months and one year, the stock has shown a positive trend, with gains of around 12% in both timeframes. In the long term, specifically over five years, the stock has provided a remarkable return of 123%, more than doubling the initial investment.

Delhivery & Havells Deal

In August, Delhivery and Havells India signed a contract,  that involved Delhivery taking charge of Havells' supply chain in western India. Delhivery plans to use its technology-driven warehousing and transportation solutions to ensure faster, more accurate, and transparent supply chain operations. They also acquired Algorhythm tech to enhance data-driven optimization in Havells' supply chain.

To strengthen their partnership, Delhivery and Havells are opening new warehouses in western India. These warehouses will cater to various needs, from traditional retail to the growing e-commerce sector. The collaboration between Delhivery and Havells began in 2017 when Delhivery started offering part-truck load services to Havells. Over time, their partnership has evolved into a strategic alliance focused on expanding Havells' business.

Vineet Jain, Senior Vice President of Havells India, expressed confidence in Delhivery's ability to contribute to Havells' growth. He praised Delhivery's technology and operational expertise.

Delhivery is known for its extensive logistics network covering more than 18,500 pin codes, while Havells operates in the consumer durables industry and has a significant global presence in 60 countries. This partnership signifies a major step toward efficient and innovative supply chain management for Havells India.

Final Words

Havells India reported a strong performance in Q2 2023, with substantial growth in net profit and revenue, despite some challenges in specific product segments and soft consumer demand. The company is well-positioned to navigate changing market dynamics and looks ahead to a promising future.