Havells Q2 profit seen up 1.4% on muted revenue growth

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Havells India's July-September quarter standalone profit is seen rising 1.4 percent year-on-year to Rs 121 crore and revenue is likely to increase 2 percent to Rs 1,392 crore, according to analysts polled by CNBC-TV18.

Operating profit during the quarter may fall 1.7 percent to Rs 180 crore but margin may expand 57 basis points to 14 percent in quarter gone by.

On consolidated basis, profit is likely to increase 5 basis points to Rs 119 crore but revenue may decline 2 percent to Rs 2,154 crore compared to year-ago period. Operating profit is seen down 5.7 percent to Rs 209 crore and margin may fall 30 basis points to 9.7 percent in quarter ended September 2015.

Analysts expect muted performance during the quarter:-Low revenue growth may be due to continued weakness in demand environment coupled with high base impact (Q2FY15 saw revenue growth of over 15 percent)-Flattish growth likely in consumer durables-EBITDA margin may be stable as commodity prices benefit cables and wires segment-Analysts expect increased advertising spend (around 3.7 percent of revenue against 3.5 percent in Q2FY15), recently launched new ad campaign with Alia Bhatt-Havells’ ECD (electrical consumer durable) segment may grow around 8 percent Y-o-Y

International business:-For Latin America, Brazil (around 30 percent of revenue), analysts expect subdued profitability, given the presence of strong local players (who gain from currency volatility).-Sharp currency volatility can impact near-term margin-Management after Q1FY16 earnings had guided for largely flat revenue for Sylvania, given the slowdown in Eurozone, and expects to remain profitable in FY16 and maintain margin. Watch out for:-Domestic consumer durable demand and lighting business-Performance in Sylvania business-Commentary on new product launches and first feedback-One-off restructuring  cost