(Reuters) – Havells India, the country’s biggest home appliances maker by market value, reported a nearly 2% drop in third-quarter profit on Thursday as higher labour and advertising expenses ate into margins.
The company’s profit fell to 2.83 billion rupees ($32.7 million) in the three months ended Dec. 31 from 2.88 billion rupees a year earlier.
Havells, which is the first among its peers to report third-quarter results, said revenue from operations rose nearly 11% to 48.83 billion rupees, while total expenses climbed 12.3% to 45.64 billion rupees.
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KEY CONTEXT
Havells has been spending more on marketing and hiring across its various businesses as part of its plan to boost R&D and improve retail distribution chains.
It is also still pumping money into home appliances brand Lloyd, which it acquired in 2017, to expand its product range to larger household goods such as refrigerators and televisions and improve its brand recognition, analysts have said.
PEER COMPARISON
Valuation(next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBIT Price/ Revenue Profit Mean Number of Stock to Div yield
DA Sales growth growth rating* analysts price (%)
target**
Havells India Ltd 51.31 34.75 3.97 15.21 23.98 Buy 23 0.79 0.59
Crompton Greaves 33.74 22.85 2.40 12.48 26.67 Buy 32 0.76 0.82
Consumer
Electricals Ltd
Voltas Ltd 47.62 38.05 2.58 16.45 40.35 Hold 33 0.93 0.34
Blue Star Ltd 53.37 36.16 19.91 29.66 Buy 17 1.01 0.37
** The mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER-DECEMBER STOCK PERFORMANCE
–All data from LSEG
— $1 = 86.5550 Indian rupees
(Reporting by Ananta Agarwal in Bengaluru; Editing by Janane Venkatraman)
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