Havells India, engaged in the business of switchgear, cable and consumer durables has registered 8% fall in its standalone PAT to Rs 206.83 crore for the quarter ended March 2019 even while the sales for the period was higher by 9% to Rs 2751.86 crore. Fall in PAT despite high single digit growth in revenue was largely due to 240 bps contraction in operating margin as well as higher tax rate. But for higher other income, lower interest as % of operating profit and lower EO expense the fall at PAT would have been steeper than reported.

• Sales were higher by 9% to Rs 2751.86 crore with upside coming from all business segments barring Lloyd Consumer. While the segment revenue of Lloyd Consumer was down by 9% (to Rs 532.40 crore) that of switchgear was up by 11% to Rs 436.76 crore. The segment revenue of cables was up by 17% to Rs 897.89 crore and that of Lighting & Fixtures (L&F) was up by 18% to Rs 379.96 crore. The segment revenue of electrical consumer durable (ECD) was up by 9% to Rs 504.85 crore.

• Segment margin of all business segments barring cables stood lower for the quarter. While segment margin of switchgear contracted by 70 bps to 37.9% that of L&F was down by 340 bps to 27.6%. Similarly the segment margin of ECD was down by 100 bps to 26.2%. While the segment margin of cables were up by 40 bps to 17.5% that of Lloyd was down by 700 bps to 15%.
• With 190 bps contraction in EBIT margin to 23.2%, the EBIT was flat (up 0%) at Rs 639.62 crore. Considering contraction in segment margin of all business segment barring cables, the upside in EBIT was largely due higher revenue reported by all segment barring Lloyd Consumer.
• EBIT of switchgear and L&F were up by 9% (to Rs 165.63 crore) and 5% (to Rs 104.69 crore) respectively largely due to higher sales. Similarly the segment profit of ECD was up by 5% (to Rs 132.03 crore) facilitated by higher sales. However the segment profit of cables was up by 20% to Rs 157.48 crore driven by higher sales and higher margin. Segment profit of Lloyd Consumer was down by 38% to Rs 79.79 crore hit by lower sales as well as lower margin.

• Other income was higher by 20% to Rs 30.95 crore and thus the fall at PBIDT was 8% to Rs 353.80 crore. The interest cost was lower by 27% to Rs 6.14 crore and depreciation was higher by 12% to Rs 39.07 crore. Thus the PBT before EO was down by 9% to Rs 308.59 crore.

• EO income for the quarter was nil compared to an expense of Rs 9.07 crore in the corresponding previous period. And thus the PBT after EO was down by 7% to Rs 308.59 crore.

• Taxation in absolute term was down by 4% to Rs 101.76 crore. But the effective tax rate for the quarter was higher at 33% compared to 31.9% in the corresponding previous period. Thus the PAT was eventually lower by 8% to Rs 206.83 crore.

• Other comprehensive expense net of tax was Rs 2.96 crore compared to an income of Rs 5.99 crore in the corresponding previous period. Thus the total comprehensive income was down by 12% to Rs 203.87 crore.

Yearly performance

Figures for fiscal ended March 31, 2019 includes financials of Lloyd Consumer Segment (formerly consumer durable business of LEEL Electricals) for full period unlike corresponding previous period which include the financials only for part of the period that is from May 8, 2017 onwards. Lloyd Consumer was acquired on May 8, 2017 along with the trade mark 'Lloyd' from Fedders Lloyd Corporation for Rs 1547.38 crore. Hence the financials for fiscal ended March 2019 not comparable with corresponding previous periods to that extent.

Standalone sales were higher by 24% to Rs 10057.62 crore. Sale excluding the incremental sales from Lloyds Consumer, which was acquired on May 2017 in both the periods, was higher by 20% to Rs 8202.06 crore facilitated by higher sales registered by all business segments of the company.

Sales of switchgear, cable and ECD was up by 18% (to Rs 1680.20 crore), 21% (to Rs 3234.60 crore), 27% (to Rs 1993.86 crore) respectively. While the lighting & fixtures revenue was up by 11% to Rs 1293.40 crore that of Lloyd Consumer was up by 31% to Rs 1855.56 crore.

EBIT grew by 18% to Rs 2389.93 crore even as EBIT margin contract by 70 bps to 23.8%. But excluding the profit of Lloyd Consumer for both the periods, the EBIT was up by 18% to Rs 2072.36 crore. The segment profit of Lloyds Consumer was up by 18% to Rs 317.57 crore. The segment profit of Switchgears, cables, and ECD was up by 16% (to Rs 646.38 crore), 19% (to Rs 521.71 crore) and 27% (to Rs 534.92 crore) respectively. The segment profit of L&F was up by 10% to Rs 369.35 crore. The PBT (after EO) was up by 14% to Rs 1155.26 crore. Eventually the PAT was up by 11% to Rs 791.52 crore with taxation stand higher by 20% to Rs 363.74 crore.

Consolidated sales was higher by 24% to Rs 10073.43 crore and with OPM contract by 100 bps to 11.8%, the OP was up by 14% to Rs 1184.35 crore. The PAT was up by 17% to Rs 785.87 crore. Eventually total comprehensive income attributable to owners was up by 16% to Rs 781.21 crore.

Havels India: Standalone Results

Havells India : Segment results

Havells India: Consolidated Results

Havells India : Consolidated Segment results