homeearnings NewsHoneywell Automation see opportunities in coming quarters, says not insulated from chip shortage issue
Honeywell Automation see opportunities in coming quarters, says not insulated from chip shortage issue
Honeywell Automation reported its Q2FY22 earnings. In an interview with CNBC-TV18, Ashish Gaikwad, MD, Honeywell Automation discussed the earnings fineprint.
After Honeywell Automation reported its earnings for the quarter ended September 30, 2021, the company’s MD Ashish Gaikwad spoke to CNBC-TV18 on Friday about the challenges that lie ahead.
“There are a lot of more opportunities, a lot more proposals being made. We see green shoots in certain sectors. So, we are quite hopeful that going forward, the orderbooks that we are doing right now will be getting converted into revenues in the quarters to come,” he said.
Gaikwad explained Honeywell Automation’s businesses are mostly long-cycle and so for the big orders that it books, the turnover period is sometimes 18-24 months. “COVID-19 has affected our backlog and that is what shows up in the decline of revenues,” he added.
He sees capital expenditure coming back in the next two quarters. “We see a lot of excitement in the new sectors and the core sectors - also both ferrous and non-ferrous metal industries are coming up with those new capex projects,” he said.
Gaikwad also said that the company is not insulated from the chip shortage issue. “Our lead times have certainly increased. We do have challenges in meeting some of our earlier deadlines etc but all efforts are on. We have pivoted to new types of chips and circuitry that we can use which is not something that is commonly used elsewhere and we are trying multiple ways to try and deal with that problem. It is going to be short-term pain for three-six months,” he explained.
He added that the engineering work that the firm provides to many of its customers overseas, including Europe, it can do so remotely from India.
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“We have a large setup of engineers throughout our offices in India and we will be able to provide both the engineering as well as the monitoring services that can keep their operations going sitting here from India,” he said.
He doesn’t see a major impact coming from Europe on the back of the COVID-19 spread.
For the full interview, watch the accompanying video.
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