Sharekhan's research report on Honeywell Automation India
Q4FY22 performance has been below our expectations on all fronts. Revenue declined by 0.7% y-o-y to Rs 668 crore (vs our expectations of Rs. 848 crore). Operating profit declined by 32% y-o-y to Rs 87 cr due to higher raw material cost, increase in staff cost as well as other expenses. Consequently, margin declined by 600 bps y-o-y to 13.1% (vs our estimate of 14%). Net profit fell by 30% y-o-y to ~Rs. 73 crore (versus our estimate of Rs 110 crore). The company remained debt free and cash & cash equivalents stood at Rs. 2,006 crore. The company generated Rs. 264 crore from cash from operations in FY22.
Outlook
We retain a Buy rating on the stock with a revised PT of Rs. 41,200, factoring a downward revision in estimates.
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