Honeywell Automation Q4 Review - Weak Execution Impacts Earnings: ICICI Securities

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ICICI Securities Report

Honeywell Automation India Ltd. witnessed 4.5% YoY and 23% QoQ drop in revenues to Rs 6.7 billion, which we believe should be due to advent of Covid-19 second wave.

Company reported an Ebitda margin of 19.2% (up 100 basis points YoY / down 220 bps QoQ) despite 340bps YoY increase in raw material costs to Rs 3.3 billion.

Other expenses declined 26% YoY and staff expenses dipped 7% YoY due to cost reduction measures, supporting the margins.

We believe, the margin expansion was aided by reduction in travel due to Covid-19 restrictions.

Net working capital increased to 51 days from 33 in FY20 due to higher receivables.

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