Shares of Honeywell Automation dropped as much as 8 percent on October 30 after the company reported a decline in its Q2 net profit amid sluggish demand.
At 11.19 am, shares of Honeywell Automation were trading at Rs 45,199.90 on the NSE. The weak earnings report also triggered a surge in trading volumes in the counter as around 28,000 shares changed hands so far, much higher than the one-month daily traded average of 4,000 shares.
Including today's slump, the stock has deepened its losses to over 16 percent in the past three months.
The engineering firm reported a 5.6 percent decline in its September quarter net profit to Rs 115 crore ($13.7 million), down from Rs 122 crore in the same period last year, primarily impacted by slowing demand.
Honeywell Automation India specialises in providing building automation solutions to industrial clients, along with designing products aimed at emissions reduction and energy transition. A recent business survey indicated a slowing growth trend in India's manufacturing sector during August and September.
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Analysts have noted that Indian exporters are facing increased shipping costs due to the ongoing Red Sea crisis. Accordingly, the company's revenue from operations also fell by 7.3 percent to Rs 1,024 crore. Although Honeywell Automation does not disclose detailed revenue distribution, the cost of materials consumed, which constitutes nearly half of its expenses, grew by 12.11 percent in the quarter.
Despite that, the company managed to retain its EBITDA margin, which came at 12.6 percent in Q2, a slight uptick from 12.5 percent in the year ago quarter.
Honeywell Automation India's parent company- Honeywell, also projected annual sales below Wall Street expectations and missed quarterly revenue estimates last week.
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