Havells India share price jumped 6 percent intraday on July 22 after the company reported robust set of numbers for the quarter ending June 2021.
The electrical equipment company posted a 268.5 percent year-on-year (YoY) rise in its consolidated net profit at Rs 235.78 crore for the June quarter of the current fiscal year (Q1FY22).
This was on the back of a 76 percent YoY growth in consolidated revenue at Rs 2,609.97 crore for the first quarter. Last year (FY21), the June quarter was a washout due to the strict COVID-19-induced lockdown.
Among the business segments, Lloyd Consumer collected revenue of Rs 497.46 crore, showing a 62.5 percent YoY growth. Cables was the largest business segment with revenue of Rs 807.17 crore, showing a YoY growth of 75 percent. Electrical consumer durables segment had revenue of Rs 576.33 crore, showing a YoY growth of 91 percent.
Also read: Havells Q1 net profit jumps 268% on robust sales growth
The stock was trading at Rs 1,169.75, up Rs 66.35, or 6.01 percent at 10:48 hours. It has touched an intraday high of Rs 1,184.00 and an intraday low of Rs 1,125.50.
The scrip was trading with volumes of 466,437 shares, compared to its five day average of 192,398 shares, an increase of 142.43 percent.
The overall contribution margins were maintained sequentially despite commodity headwinds and lower sales. Margins in lighting, ECD and Lloyd divisions were impacted by under absorption of fixed expenses due to lower production volumes.
The contribution margins for Q1FY22 stood at 21.9 percent compared to 17.2 percent in the same period last year. Contribution margins are derived after deducting material cost, manufacturing variables, direct selling variables and depreciation from the net revenue.
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According to Shitij Gandhi, Senior Technical Analyst at SMC Global Securities, one can buy the stock with target of Rs 1,285 per share.
After testing the level of Rs 1,231 in February, this stock took a breather and retraced towards Rs 1,000. Since then it has been fluctuating in a broader range of Rs 980-1,100. At the current juncture, this stock has formed a rounding bottom pattern on the daily charts, he said.
"It has regained momentum above its important hurdle of Rs 1,100. Rising volumes along with positive divergences on the secondary oscillators suggest the next upswing in the prices," he added.
Global research firm HSBC has a buy on the stock with target raised to Rs 1,215 per share. It is of the view that the company delivered strong results in Q1 with revenue and profit above consensus expectation adding that demand recovery continues to surprise positively.
It sees gross margin pressure due to rising commodity costs as transient headwind.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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