Havells India reports mixed financial results for Q2 FY25, with some positive and negative trends.

Havells India, a leading player in the cable industry, has recently announced its financial results for the quarter ending September 2024. The company has reported a flat performance for the quarter, with a score of 3 out of 13, which is a decrease from the previous quarter.

Despite this, there are some positive aspects to the financials of Havells India. The company has shown a strong operating cash flow of Rs 1,952.89 crore annually, which is the highest in the last three years. This indicates that the company has been able to generate higher cash revenues from its business operations. Additionally, the dividend payout ratio (DPR) has also been consistently increasing over the last five years, with the current DPR at 44.39%. This shows that the company is distributing a higher proportion of its profits as dividends to its shareholders. Furthermore, the company has also shown improvement in its short-term liquidity, with cash and cash equivalents at Rs 3,188.32 crore in the last six half-yearly periods.

However, there are also some areas of concern in the financials of Havells India. The profit before tax less other income (PBT) for the quarter has fallen by -32.9% compared to the average PBT of the previous four quarters. Similarly, the profit after tax (PAT) has also decreased by -22.9% compared to the average PAT of the previous four quarters. This indicates a negative trend in the near term for both PBT and PAT. Additionally, the net sales for the quarter have also decreased by -7.2% compared to the average net sales of the previous four quarters, showing a negative sales trend in the near term. Moreover, the PBT for the quarter is the lowest in the last five quarters, further highlighting the negative trend.

It is also worth noting that the company has shown a significant increase in non-operating income, with the highest amount of Rs 92.89 crore in the last five quarters. While this may seem positive, it is important to consider that this income is from non-business activities and may not be sustainable in the long run.

In conclusion, while Havells India has shown some positive aspects in its financials, there are also some concerns that investors should be aware of. Based on these factors, MarketsMOJO has given a ‘Hold’ call for the stock.