Havells India expects margin to return to pre-COVID levels soon
Havells India posted its Q3 earnings. To discuss its performance in detail and also to get a sense of its outlook, CNBC-TV18 spoke to Anil Rai Gupta, Chairman & MD of Havells India. Gupta expects margin to come to pre-COVID levels soon. He also mentioned that the company's stance on acquisition at present isn't an aggressive one.
Havells reported a near 14 percent quarterly increase in its total income during the quarter ended December 31, 2021. The company posted a total income of Rs 3,701.05 crore for the quarter under review as against Rs 3,254.30 in Q2FY22. Its profit before tax came in at Rs 410.65 crore, a 1.78 percent QoQ increase over the Rs 403.45 crore reported at the end of the previous quarter.
To discuss its performance in detail and also to get a sense of its outlook, CNBC-TV18 spoke to Anil Rai Gupta, Chairman & MD of Havells India.
Sharing details about the margin, Gupta believes it is coming back to normal levels across businesses. He explained that the reduction in margin was only seen in consumer durables and Lloyds business. According to him, only some costs could be passed on to consumers. Once full input cost inflation can be passed on, margins will return back to pre-COVID levels soon.
He said, “We are expecting that strong quarter should come in, the summer season should come in with pent-up demand. So, the pass on of the entire cost, we should be able to do in next couple of quarters and that should bring the margins back to normal levels in the consumer durable sector.”
On acquisitions, he said that the company will only look at it provided it adds a product category or a geography channel to its arsenal. He explained that the company’s stance on acquisitions at the moment isn’t an aggressive one.
He said, “We are not very aggressive on acquisitions. Yes, the cash on the balance sheet helps to look for opportunities, but they have to be extremely strategic for a category or geographical expansion.”
On the upcoming summer season, Gupta believes it will be a strong one for the company this time around. He expects Lloyd business to come back and grow after this season.
He said, “We have seen a reduction in margins only in the consumer durable business and Lloyd’s business – that should be coming back to the pre-COVID levels in the next few quarters.”
As far as the consumption story is concerned, 4-5 percent of it is coming from the rural area, which is growing well. He said, “It’s still a small base for us and hence growing well. Our penetration would continue to be going deeper into that as well as product category expansion.”
On advertising spends, he said that it was on the lower side due to COVID.
“We are coming back to the normal percentage of sales level in advertising now and going forward we should be able to maintain the same level of advertising spends,” Gupta said.
For the full interview, watch the accompanying video
(Edited by : Dipikka Ghosh)
First Published: Jan 21, 2022 3:41 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Over 50 onion farmers detained in Nashik ahead of PM Modi's visit
May 16, 2024 11:14 AM
Why Google CEO is cautiously optimistic about the election year
May 16, 2024 9:51 AM
Mark Mobius reveals how markets will react if NDA wins 400+ Lok Sabha seats
May 15, 2024 8:09 PM