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Havells reported revenue growth of 6% led by weak sentiment, delayed festival season, pricing revisions led by technology change and price deflation in LED impacting performance across ECD segment (-5.2% YoY) and flat lighting business (-0.5% YoY). Cables and Wires segment and Switchgear segment posted revenue growth of 9.4% and 8.1%, respectively YoY led by higher B2B demand. Lloyd posted strong revenue growth of 18.5% YoY but continued to incur losses. EBITDA and PAT saw growth of 29.6% and 32.4% respectively, YoY. Correction in commodity prices and change in revenue mix led to gross margin expansion of 240bps YoY. EBITDA margin expanded 170bps YoY. Management highlighted that B2B demand has remained strong and is likely to drive revenue growth of Cables & Wires and Switchgear in H2FY24 while recovery across white goods and durables revenues will be seen in H2FY24 as some green shoots visible ahead. Lloyd continues to witness losses as highlighted earlier in our report as the management continues to focus on RAC market share gains and ramp- up in other categories. We remain structurally positive on the stock and believe that its premiumisation strategy, products portfolio across segments, pick up in residential demand, commodity price stability and B2B portfolio sustaining steady demand led by infrastructure/ construction. We maintain BUY with a TP of ?1,545.

Result snapshot Q2FY24

Havells reported revenue growth of 6% led by weak sentiment, delayed festival season, pricing revisions led by technology change and price deflation in LED impacting performance across ECD segment (-5.2% YoY) and flat lighting business (-0.5% YoY). Cables and Wires segment and switchgear segment posted revenue growth of 9.4% and 8.1%, respectively YoY led by higher B2B demand. Cable business reported ~10% volume growth in Q2FY24. Lloyd posted strong revenue growth of 18.5% YoY but continued to incur losses. EBITDA grew 30.2% YoY to ?3.7bn with EBITDA margins expanded by 180bps YoY to 9.6%. In terms of segmental EBIT margin, Cables margin came in at 11.6% (+530bps YoY), Lighting at 14.3% (flat YoY), ECD at 11.6% (flat YoY) and Switchgear at 26.4% (+140bps YoY). Lloyd continues to see losses at ?745mn vs loss of ?840mn in Q2FY23. PBT grew by 33.2% YoY to ?3.4bn. Adj. PAT grew 33.2% YoY to ?2.5bn (PLe ?2.6bn). Net working capital days came at 39 (Vs 39 in Q2FY23).

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