Havells India quarterly profit misses estimates as margins, expenses hurt

BENGALURU (Reuters) - Electrical equipment maker Havells India Ltd reported a 38% fall in quarterly profit on Wednesday, missing analysts' estimates widely, dented by a fall in margins and higher expenses.

The company's profit for the three months ended Sept. 30 came in at 1.87 billion rupees ($22.50 million), compared with 3.02 billion rupees a year ago. Analysts on average had expected a profit of 2.76 billion rupees.

Havells, known for its products in the electricals and home appliances space that include fans, cables, switches, lighting and water heater, also has an air conditioner brand Lloyd.

The company said impact on margins in its cable business and Lloyd were more pronounced, while short-term destocking in fans led by changes in energy-efficiency norms also hurt results.

"We believe that margin have hit the trough. Sequential margins from Q1 are stable and will improve from this quarter," Havells said, adding that consumer demand was "slightly sluggish, though stable."

"There has been a reasonable demand environment with real estate upcycle and infrastructure investment," the company said.

Electrical goods companies are facing pressure from a rise in commodity prices after Russia's invasion of Ukraine.

Overall expenses surged 21.4% in the second quarter.

Havells' revenue from operations in the quarter rose 13.9% to 36.69 billion rupees. Revenue from the cable business, the company's biggest segment, jumped 18.8% to 13.59 billion rupees.

($1 = 83.1010 Indian rupees)

(Reporting by Meenakshi Maidas in Bengaluru; Editing by Maju Samuel)