For the July-September quarter (Q2FY21), Havells India’s electrical consumer durables (ECD) and Lloyd, which are largely B2Ccategories, should see 11.6 per cent and 20.2 per cent growth, respectively. Growth in ECD should be on the back of fans, water heaters and kitchen and appliances, while favorable base should elevate growth in Lloyd, Emkay Global Financial Services said in sector update.
Segments with elements of B2B such as switchgears, cables and wires and lighting and fixtures should see softness. Gross margin is expected to contract 211bps on a change in revenue mix, while lower employee, A&P and other operating expenses are expected to improve EBITDA at 12.1 per cent in Q2FY21, against 8.8 per cent in Q1FY21 and 10.5 per cent in Q2FY20, it said.
The ECD segment is likely to turn in growth (5 per cent YoY estimate) as demand momentum of June is likely to have sustained. Superior performance of LED TVs (industry-wide) is likely to aid growth for Lloyd (5 per cent estimate). For other segments, demand is likely to remain tepid with an estimate of 3-15 per cent YoY drop. In margins, Lloyd is likely to turn positive (-2.3 per cent YoY), whereas other segments are expected to dip owing demand headwinds, Edelweiss Securities said in Q2FY21 preview.