Havells Q1 preview: Net profit seen rising 60.4% to Rs 194.8 crore

Fast moving electronic goods (FMEG) company Havells is expected to post a 60.4 percent rise in its standalone net profit to Rs 194.8 crore for the quarter ended June, according to a Reuters poll of equity analysts.

The company had posted a profit after tax of Rs 121.4 crore in the corresponding quarter a year ago.

According to the analysts polled by Reuters, the company is seen reporting a rise of 29.8 percent in its sales to Rs 2,415.5 crore for the quarter under review.

Brokerage Motilal Oswal said in a report that Havells is expected to report revenue growth of 32 percent year on year, given the contribution from recently-acquired Lloyd.

"We expect operating margin to improve 370 basis points YoY to 13 percent, driven by an improvement in the contribution margin from the Lloyd business," the brokerage said.

In May 2017, Havells India announced the completion of its acquisition of Lloyd's consumer durables business. The acquisition was done at an enterprise value of Rs 1,600 crore on a debt-free, cash-free basis.

For the quarter under review, Havells could report muted growth in its cables division. Motilal Oswal said it expects the cables segment to register a growth of 2 percent year on year, due to the higher base of Q1FY18.

The higher base was because consumers bought more of the company's products in the June quarter last year, before the Goods and Services Tax regime was implemented.

The company's lighting segment is seen growing 15 percent, while its electrical consumer durables segment is seen growing 10 percent.

Kotak Institutional Equities said in a report that the rise in Havells' revenue, of around 34 percent, will be led by its acquisition of Lloyd's consumer durables business.

It also pointed out that the June quarter is a seasonally strong quarter for the air conditioner business.

• Progress in the Lloyd Electric business


• Launch of new domestic appliances


• Revenue growth in cables and lighting segment