22 July 2021 Sector Update

Consumer Durables
Inspiring recovery; rich valuation to sustain
The consumer durable sector has seen robust recovery in H2FY21, much better Company CMP (INR) Reco.
than ours as well as the street’s expectation. The category leaders demonstrated a Havells 1,103 ADD
strong print in FY21, both in terms of revenue and margin. The strong earnings Voltas 1,024 ADD
show justifies the sharp rerating of companies in FY21 (our coverage universe Crompton 459 BUY
witnessed ~20% P/E rerating vis-à-vis the company’s own past three-year average). V-Guard 249 ADD
Although the second wave decelerated the momentum, it was not as severe as in Symphony 1,080 ADD
the first wave (in the previous year). Our channel checks suggest strong recovery TTK Prestige 9,016 ADD
in Jun-21 for electrical and cooling products. Revenues of most companies are
CD- Aggregate Revenue Growth
expected to fall by ~15% in Q1FY22 over Q1FY20 vs. the 50-60% YoY decline in
60
Q1FY21. Our checks further suggest recovery would be strong in July too and 45 44
38
40 32 34
sustain in the coming quarters. This improves our confidence in our earnings 22
17
21
27

20 11 11 13 15 14
estimates and we expect leading companies to sustain the earnings show. Rich 7
1
5
-
valuations will sustain too, while for some companies, they may even expand. We (1)
(20) (12)
maintain our BUY rating on Crompton and ADD on Havells, Voltas, V-Guard,
(40)
Symphony, and TTK Prestige.

(60) (52)

4QFY20
1QFY20
2QFY20
3QFY20

1QFY21
2QFY21
3QFY21
4QFY21

FY18
FY16
FY17

FY19
FY20
FY21
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
Recovery across B-B and B-C: Most categories have seen recovery, post the
easing of lockdown restrictions in June 2021. Both B-B and B-C are seeing strong
traction, led by healthy underlying demand, while category leaders are gaining CD- Aggregate EBIT Growth
market share. B-B business was a drag in FY21, despite which, leading 80 65
54
60 44
companies could deliver healthy growth in FY21 due to strong growth in B-C. 40
35
21
39
25
14 18 20 22 15
However, B-B seems to be in a good shape now and we expect the momentum to 20 7 7 8 4
-
sustain in FY22. We maintain our view that appliance sector would grow (20) (8) (9)
(19)
through multiple drivers like penetration, housing demand, industrial Capex, (40)

(60)
convenience, and cheap finance. (80)


(76)
(100)
Electrical products seeing better traction: The electricals products saw robust

3QFY20
1QFY20
2QFY20

4QFY20
1QFY21
2QFY21
3QFY21
4QFY21

FY19
FY16
FY17
FY18

FY20
FY21
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
revenue growth in H2FY21, led by pent-up demand, work-from-home demand
and price hikes. In FY21, the large brands managed to gain market share from CD: Sector Valuation Premium (12-
fringe players, a trend that our channel checks suggest may continue for the month) Over Nifty 50
(%)
coming quarters. It augurs well for companies like Crompton Consumer, which Premium to NIFTY (%) Avg Premium (%)

160
gained market share in the fan category. While this segment saw demand
disruptions in Q1FY22, our channel checks suggest Q1FY22 revenue would be 120

around 85-90% of Q1FY20 (vs. the 45-50% YoY dip in Q1FY21).


80
Demand from the north supports cooling products: Cooling products
continued to see demand from pre-buying activities in Q4FY21, in anticipation 40

of a strong summer season. However, with the second COVID wave, the
0
demand was impacted from the second week of April. According to our channel Jul-11 Jul-13 Jul-15 Jul-17 Jul-19 Jul-21

checks, the RAC saw strong demand in Jun-21. Recovery in the north supported
CD: Earnings vs. Valuation
the overall demand. We expect revenues of the overall industry to decline ~20- (%) EPS Gr (%) P/E (x)
80 45x
25% in Q1FY22 over Q1FY20, vs. the 60-65% YoY decline in Q1FY21. 40x


60
35x
Price hike to protect margin: Despite the commodity inflation in H2FY21, 40 30x

companies expanded EBITDA margin, driven by price hikes, op-lev, cost 20

25x

20x
controls, and inventory gains. Raw material inflation sustained in Q1FY22 also, 0 15x

leading to further price hikes in June and July, covering the current commodity -20
10x

5x
inflation. We expect EBITDA margin to be protected in FY22. -40 0x


FY22E
FY19
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18

FY20
FY21

Near-term outlook: Pent-up demand (most seasonal categories missed out

massively in the previous two seasons), work-from-home (to support
Naveen Trivedi
convenience driven categories), improving housing activities, and resumption of
naveen.trivedi@hdfcsec.com
Capex will sustain strong revenue traction in the coming quarters too. Leading
companies have taken price hikes to pass on the raw material inflation, while +91-22-6171-7324
restoration of operational costs will be compensated for by op-lev. Hence,
EBITDA margin will remain healthy in the coming quarters. The earnings Saras Singh
potential will sustain the rich valuations, market share gain will be the key saras.singh@hdfcsec.com
monitorable for stock performances. +91-22-6171-7336

HSIE Research is also available on Bloomberg ERH HDF <GO> & Thomson Reuters
Appliances: Sector Update

Table of content

CD Universe Performance ...................................................................................................3

Category-wise Performance in FY21 ...................................................................................5
Cooling Products ....................................................................................................5
Consumer Durables.................................................................................................6
Lighting & Fixtures ................................................................................................7
Cables & Wires .........................................................................................................8
OEM...........................................................................................................................9
Sector Valuation ...................................................................................................................12
Companies - P/E Bands ......................................................................................................14
Sector outlook and preview – Q1FY22 ..............................................................................15

Page | 2
Appliances: Sector Update

CD Universe Performance
Revenue
INR mn 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 FY17 FY18 FY19 FY20 FY21
Havells 27,127 22,306 22,699 22,161 14,791 24,518 31,659 33,312 61,353 81,386 100,593 94,292 104,279
Voltas 26,540 14,219 14,925 20,896 12,969 16,125 19,946 26,517 60,328 64,044 71,241 76,581 75,558
Crompton 13,468 10,758 10,713 10,263 7,201 12,132 13,482 15,221 39,009 40,797 44,789 45,120 48,035
V-Guard 6,994 6,193 6,266 5,366 4,058 6,167 8,274 8,491 20,856 23,117 25,664 24,820 26,990
Symphony (Stand.) 1,600 1,950 2,070 1,540 400 1,120 1,240 2,120 6,639 6,874 5,240 7,160 4,880
Whirlpool 19,742 13,935 12,712 13,536 10,271 15,995 14,940 17,794 39,408 48,319 53,977 59,925 58,999
Blue Star 15,755 12,495 12,359 12,994 6,260 9,021 11,239 16,116 43,852 47,408 52,348 53,602 42,636
Polycab 19,330 22,419 25,073 21,294 9,766 21,137 27,988 30,374 55,001 67,703 79,856 88,300 89,265
Johnson Hitachi 9,519 3,766 4,360 4,329 2,696 3,101 4,875 5,794 19,173 21,854 22,413 21,974 16,465
TTK Prestige 4,336 5,736 5,461 3,835 2,085 5,902 6,794 5,549 16,035 17,465 19,680 19,368 20,331
Amber 12,359 6,232 7,884 13,152 2,595 4,079 7,647 15,984 16,519 21,281 27,520 39,628 30,305
Bajaj Electricals 12,926 10,709 12,736 12,922 6,035 12,064 14,841 12,417 42,457 46,870 66,389 49,293 45,356
Orient Electric 5,683 4,347 4,957 5,631 1,788 4,338 6,183 8,017 14,146 15,998 18,644 20,618 20,326
IFB (Home App) 5,655 5,859 5,761 3,807 2,493 5,886 7,679 6,384 14,742 18,104 20,897 21,081 22,442
Dixon 11,469 14,020 9,938 8,574 5,169 16,387 21,828 21,097 24,570 28,416 29,844 44,001 64,482
Hawkins 1,421 1,926 1,933 1,460 1,008 1,932 2,311 2,434 5,120 5,526 6,528 6,739 7,685
KEI Industries 10,814 12,337 13,142 12,585 7,454 10,369 11,529 12,463 26,390 34,588 42,310 48,878 41,815
Finolex 8,077 7,158 7,024 6,514 3,771 6,394 8,302 9,214 26,708 28,946 30,778 28,773 27,681
Total 212,815 176,363 180,012 180,860 100,810 176,667 220,758 249,295 532,306 618,695 718,711 750,151 747,530

Revenue Growth
YoY Gr (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 FY17 FY18 FY19 FY20 FY21
Havells 4 2 (10) (20) (45) 10 39 50 14 37 24 (6) 11
Voltas 24 0 0 1 (52) 12 33 26 5 6 11 8 (2)
Crompton 12 4 4 (15) (47) 13 26 48 10 8 11 1 6
V-Guard 10 4 5 (27) (42) (0) 32 58 15 15 12 (3) 9
Symphony (Stand.) 103 32 30 12 (75) (43) (40) 38 20 4 (24) 37 (32)
Whirlpool 20 18 5 (0) (48) 15 18 31 15 23 12 11 (2)
Blue Star 4 21 12 (19) (60) (28) (9) 24 23 7 13 2 (20)
Polycab 15 24 24 (14) (49) (6) 12 43 6 23 18 11 1
Johnson Hitachi 20 9 0 (35) (72) (18) 12 34 17 14 3 (2) (25)
TTK Prestige 4 4 (1) (14) (52) 3 24 45 8 15 16 (2) 5
Amber 75 89 52 10 (79) (35) (3) 22 51 29 29 44 (24)
Bajaj Electricals 14 (32) (41) (27) (53) 11 17 (3) (7) 20 41 (25) (8)
Orient Electric 31 17 18 (12) (69) (0) 25 42 9 13 17 11 (1)
IFB (Home App) 16 8 4 (25) (56) 0 33 68 20 23 15 1 6
Dixon 94 90 25 (0) (55) 17 120 146 77 16 5 47 47
Hawkins 18 12 11 (21) (29) 0 20 67 (6) 8 18 3 14
KEI Industries 22 24 21 0 (31) (16) (12) (1) 14 31 22 16 (14)
Finolex 2 0 (6) (21) (53) (11) 18 41 4 8 6 (7) (4)
Total 19 12 2 (12) (53) 0 23 38 14 19 16 4 (0)

Page | 3
Appliances: Sector Update

EBITDA Growth
YoY Gr (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 FY17 FY18 FY19 FY20 FY21
Havells (11) (10) (9) (22) (53) 79 89 106 9 27 13 (13) 52
Voltas 20 (2) (16) 33 (77) (7) 50 72 34 15 (8) 12 (7)
Crompton 15 4 9 (16) (47) 48 46 61 13 10 10 2 20
V-Guard 53 56 32 (42) (87) (5) 91 143 17 6 3 11 19
Symphony (Stand.) 2,300 36 40 20 (133) (52) (48) 22 2 6 (39) 49 (42)
Whirlpool 24 32 (8) (20) (85) 28 12 38 27 15 15 5 (23)
Blue Star (16) 27 35 (66) (99) (25) 43 173 3 24 25 (18) (15)
Polycab 19 26 6 23 (72) 15 11 40 (2) 52 31 19 3
Johnson Hitachi 31 (62) (1,200) (65) (120) (360) 107 185 37 19 (18) 5 (32)
TTK Prestige 1 7 (3) (45) (86) (1) 42 192 6 21 22 (9) 21
Amber 104 169 87 (10) (105) (41) 16 39 15 41 16 45 (29)
Bajaj Electricals 2 (70) (50) (52) (126) 333 116 114 (8) 21 16 (39) 46
Orient Electric 66 28 68 (8) (144) 164 86 49 16 37 3 25 24
IFB (Home App) (12) 42 (39) na na 49 539 (170) 140 52 (41) (56) 377
Dixon 104 93 32 49 (68) 42 95 43 61 23 20 65 28
Hawkins 32 30 59 (34) (55) 1 4 121 9 (5) 22 21 7
KEI Industries 32 21 19 (10) (37) (3) (8) 16 12 24 30 13 (7)
Finolex (18) (2) (16) (31) (67) (2) 15 (8) 10 17 4 (18) (18)
Total 16 12 3 (17) (80) 25 44 69 15 23 10 3 7

CD Universe – CY 2020 Revenue Growth CD Universe – CY 2020 EBITA Growth

2019 2020 2019 2020
100
80
60
50
20

20
(20)

(10)
(60)
Blue Star

Dixon
Crompton

Amber
V-Guard

Hitachi

Bajaj Elect
TTK
Voltas

Symphony

KEI Ind
Polycab

Hawkins
Orient Ele
Whirlpool

IFB
Havells

Finolex
(40)
Crompton

Bajaj Elect
Polycab
Symphony
Whirlpool
Blue Star

Dixon
Amber
V-Guard

Hitachi

IFB
Voltas

TTK
Havells

KEI Ind
Finolex
Hawkins
Orient Ele

Source: Companies, HSIE Research Source: Companies, HSIE Research

Page | 4
Appliances: Sector Update

Category-wise performance in FY21

(GREEN/RED is outperformer/underperformer in the category in the LTM)

Cooling products
 Cooling products continued to see demand from pre-buying activities in
Q4FY21, in anticipation of a strong summer season.
 Recovery in demand from Q2FY21 onwards has helped companies recoup
their lost sales and, in some cases such as Lloyds, even deliver a YoY growth.
 Over the last twelve months (LTM), Voltas, V-Guard’s stabilizer, and Lloyd
led the pack with strong growth, while Symphony and Hitachi were the
laggards.

Revenue (Rs mn) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Voltas (UCP) 17,488 5,256 6,005 11,989 7,071 5,717 8,396 14,367 35,550 30,469 32,261 31,556 40,737 35,550
Blue Star (UCP) 9,069 3,772 4,202 5,963 2,749 3,187 4,930 7,818 18,683 19,974 20,887 22,690 23,006 18,683
Havells-Lloyd 6,520 1,800 3,004 4,579 3,062 2,804 5,116 5,906 16,888 18,746 14,141 18,556 15,903 16,888
Johnson - Hitachi 9,519 3,766 4,360 4,329 2,696 3,101 4,875 5,794 16,465 19,173 21,854 22,413 21,974 16,465
V-Guard
2,828 1,676 1,538 1,503 1,377 1,710 2,074 2,428 7,589 6,648 7,286 7,599 7,545 7,589
(Stabilizer+Inverter)
Symphony (Standalone) 1,480 1,890 1,780 1,360 340 1,050 1,180 1,740 4,310 5,918 6,213 4,670 6,510 4,310
Total 46,904 18,159 20,889 29,723 17,294 17,568 26,571 38,052 99,485 100,927 102,642 107,483 115,675 99,485

Revenue YoY Gr. (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Voltas (UCP) 47 19 14 20 (60) 9 40 20 (13) 21 6 (2) 29 (13)
Blue Star (UCP) 9 10 7 (15) (70) (16) 17 31 (19) 28 17 9 1 (19)
Havells-Lloyd (8) (30) (16) (14) (53) 56 70 29 6 35 11 6 (14) 6
Johnson - Hitachi 20 9 0 (35) (72) (18) 12 34 (25) 17 14 3 (2) (25)
V-Guard (Stabilizer+Inverter) 18 4 1 (27) (51) 2 35 61 1 18 14 6 (1) 1
Symphony (Standalone) 128 33 27 13 (77) (44) (34) 28 (34) 21 5 (25) 39 (34)
Total 27 10 6 (3) (62) 3 33 29 (13) 24 11 2 10 (13)

EBIT Margin (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Voltas (UCP) 13.1 8.8 10.1 14.6 15.5 11.0 12.5 15.6 14.1 14.5 14.7 10.3 12.6 14.1
Blue Star (UCP) 10.9 3.2 1.8 7.3 (1.4) 3.7 7.9 7.9 5.8 8.4 9.2 8.2 7.1 5.8
Havells-Lloyd 1.2 (24.5) (4.3) 2.0 2.1 1.8 6.0 5.4 4.4 - 6.7 4.2 (2.5) 4.4
Johnson - Hitachi 10.3 (2.7) 4.0 2.4 (13.1) (7.4) 9.0 - 2.4 6.0 6.7 5.3 5.3 2.4
V-Guard (Stabilizer+Inverter) 17.5 16.9 15.9 14.1 6.8 17.9 24.7 21.9 19.0 13.0 10.9 12.5 16.4 19.0
Symphony (Standalone) 20.3 36.5 37.1 38.2 - 31.4 36.4 31.6 30.4 37.4 37.6 30.2 33.3 30.4

EBIT Gr (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Voltas (UCP) 54 67 36 69 (52) 36 72 28 (2) 30 8 (31) 57 (2)
Blue Star (UCP) 4 46 (19) (40) (104) (2) 407 42 (33) 4 15 (4) (13) (33)
Havells-Lloyd (87) (1,387) (901) (27) (20) (111) (341) 253 (285) na na (17) (151) (285)
Johnson - Hitachi 35 90 (225) (84) (136) 129 149 413 (66) 50 26 (18) (3) (66)
V-Guard (Stabilizer+Inverter) 122 40 10 (30) (81) 8 110 150 17 13 (8) 19 30 17
Symphony (Standalone) 2,900 50 29 126 (100) (52) (35) 6 (40) 47 5 (48) 79 (40)
Aggregate Growth (%) 28 1 42 1 (83) 19 91 54 (8) 28 9 (24) 18 (8)

Page | 5
Appliances: Sector Update

Consumer durables
 ECD revenue saw robust growth in 4QFY21, led by both volume and value
growth, besides the low base impact. Various companies took about 8-10%
price hikes in Q4 to combat the impact of input cost pressures.
 In the fan category, large companies such as Crompton gained market share
from smaller players. Over the LTM, Havells, Polycab, and Crompton were
the top performers in the segment while Whirlpool and Orient were the
laggards.

Revenue (INR mn) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Whirlpool 19,742 13,935 12,712 13,536 10,271 15,995 14,940 17,794 58,999 39,408 48,319 53,977 59,925 58,999
Crompton 10,729 7,881 7,870 7,411 5,965 9,317 10,359 11,930 37,571 28,817 28,281 32,136 33,890 37,571
Bajaj Electricals 7,834 6,977 8,579 7,457 3,944 7,886 11,494 9,712 33,035 23,142 22,285 27,408 30,846 33,035
Havells (ECD) 5,616 4,902 5,359 4,177 3,017 5,799 7,831 7,124 23,770 13,783 15,602 20,962 20,054 23,770
TTK Prestige 4,336 5,736 5,461 3,835 2,085 5,902 6,794 5,549 20,331 16,035 17,465 19,680 19,368 20,331
IFB (Home App) 5,655 5,859 5,761 3,807 2,493 5,886 7,679 6,384 22,442 14,742 18,104 20,897 21,081 22,442
Orient Electric 4,291 2,832 3,248 4,545 1,035 3,044 4,605 6,456 15,139 - 12,181 13,296 14,916 15,139
Polycab (FMEG) 2,401 1,956 2,166 1,833 1,378 2,440 3,055 3,468 10,341 3,384 4,853 6,433 8,356 10,341
V-Guard (CD) 1,534 1,750 2,020 1,441 855 1,634 2,641 2,237 7,367 5,085 5,738 6,779 6,745 7,367
Hawkins 1,421 1,926 1,933 1,460 1,008 1,932 2,311 2,434 7,685 5,398 5,526 6,528 6,739 7,685
Total 63,559 53,753 55,108 49,501 32,050 59,833 71,708 73,087 236,679 149,793 178,354 208,095 221,921 236,679

Revenue YoY Gr. (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Whirlpool 20 18 5 (0) (48) 15 18 31 (2) 15 23 12 11 (2)
Crompton 16 11 11 (14) (44) 18 32 61 11 11 5 16 5 11
Bajaj Electricals 31 9 13 1 (50) 13 34 30 7 (11) 6 23 13 7
Havells (ECD) 24 15 1 (14) (46) 18 46 71 19 22 21 30 6 19
TTK Prestige 4 4 (1) (14) (52) 3 24 45 5 8 15 16 (2) 5
IFB (Home App) 16 8 4 (25) (56) 0 33 68 6 20 23 15 1 6
Orient Electric 32 16 14 (4) (76) 7 42 42 1 na na 9 12 1
Polycab (FMEG) 62 42 30 (6) (43) 25 41 89 24 71 43 33 33 24
V-Guard (CD) 15 (4) 10 (19) (44) (7) 31 55 9 737 16 20 (1) 9
Hawkins 18 12 11 (21) (29) 0 20 67 14 (6) 8 18 3 14
Weighted Avg. Gr. (%) 22 13 8 (8) (48) 12 31 50 7 36 16 17 8 7

EBIT Margin (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Whirlpool 15.2 10.5 7.8 9.4 3.2 10.9 6.3 9.4 7.9 12.0 11.3 11.8 11.2 7.9
Crompton 20.3 19.2 19.8 20.0 20.5 21.0 19.8 18.1 19.7 17.1 18.9 19.2 19.9 19.7
Bajaj Electricals 7.0 5.1 8.2 6.4 2.7 10.7 12.5 7.4 9.8 4.3 4.9 6.6 6.8 9.8
Havells 14.6 14.6 14.4 13.4 12.3 20.2 17.9 15.3 17.0 14.2 14.5 13.8 14.3 17.0
TTK Prestige 11.3 13.6 13.6 6.5 (0.2) 13.0 15.9 16.6 13.6 10.6 12.0 13.2 11.7 13.6
IFB (Home App) 2.3 6.0 2.1 (9.2) (14.2) 9.0 10.1 3.9 5.4 4.3 5.3 2.7 1.2 5.4
Orient Electric 10.1 9.3 12.4 15.8 (6.8) 16.8 14.9 14.3 13.6 na 12.1 11.3 12.2 13.6
Polycab (FMEG) 3.7 3.3 0.6 0.1 (4.0) 8.0 5.9 7.0 5.5 na 1.8 1.2 2.0 5.5
V-Guard (CD) 4.3 10.6 5.6 2.5 (10.2) 8.3 10.0 4.0 5.5 3.3 3.6 4.7 5.9 5.5
Hawkins 14.8 18.0 15.7 9.1 8.7 18.0 13.5 12.6 13.7 13.8 12.1 12.6 14.7 13.7

EBIT Gr (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Whirlpool 19 22 1 (23) (89) 18 (6) 31 (31) 31 15 17 6 (31)
Crompton 21 12 18 (12) (44) 29 31 46 10 - 9 15 9 10
Bajaj Electricals 30 (4) 28 4 (81) 138 104 79 56 (18) 10 66 16 56
Havells 15 5 2 (23) (55) 63 83 95 41 22 16 27 (1) 41
TTK Prestige (0) 5 (6) (56) (101) (2) 46 270 22 4 24 24 (13) 22
IFB (Home App) (12) 42 (39) 1,442 (377) 49 539 (170) 377 140 52 (41) (56) 377
Orient Electric 39 6 34 11 (116) 93 70 29 13 - - 2 21 13
V-Guard (CD) 72 61 138 (70) (232) (26) 134 151 1 80 23 54 25 1
Hawkins 33 30 61 (37) (58) 1 3 132 13 10 (6) 23 21 13
Aggregate Growth (%) 18 16 11 (25) (81) 36 59 86 11 20 14 18 5 11

Page | 6
Appliances: Sector Update

Lighting & fixtures

 The lighting segment continued to see volume growth in the B-C business,
but B-B remained subdued.
 The LTM margin improvement was aided by containing of the price erosion
in B-B lighting.
 Over the LTM, Havells was the top performer in this segment, delivering 7%
YoY growth, while Crompton’s and Orient’s revenue declined by 9% and 7%
respectively.

Revenue (INR mn) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Havells 2,504 2,536 2,760 2,343 1,380 2,646 3,533 3,287 10,846 9,720 10,240 12,434 10,143 10,846
Crompton 2,739 2,877 2,843 2,853 1,236 2,815 3,123 3,291 10,464 11,296 12,770 12,653 11,312 10,464
Orient Electric 1,392 1,514 1,709 1,086 753 1,294 1,579 1,561 5,187 - 4,074 5,348 5,702 5,187
Total 6,636 6,927 7,312 6,282 3,369 6,755 8,234 8,139 26,497 21,016 27,084 30,435 27,157 26,497

Revenue YoY Gr.

1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
(%)
Havells 5 (2) (8) (31) (45) 4 28 40 7 23 13 16 (12) 7
Crompton (2) (11) (11) (17) (55) (2) 10 15 (7) 11 20 4 (11) (7)
Orient Electric 30 17 26 (33) (46) (15) (8) 44 (9) - - 31 7 (9)
Weighted Avg. Gr.
7 (2) (1) (25) (49) (2) 14 31 (2) 16 17 14 (7) (2)
(%)

EBIT Margin (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Havells 14.4 12.1 17.4 14.1 2.1 19.7 23.0 20.7 18.8 15.2 16.4 14.8 14.4 18.8
Crompton 5.1 5.2 6.9 7.7 6.1 11.7 12.3 16.1 12.6 8.8 11.5 8.4 6.2 12.6
Orient Electric 10.0 7.2 13.2 11.3 6.4 14.6 14.6 14.4 13.3 - 8.5 11.0 10.5 13.3

EBIT Gr (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Havells 1 (32) (7) (37) (92) 69 69 106 40 39 14 9 (21) 40
Crompton (25) (27) (31) (44) (47) 119 96 142 87 - 47 (27) (34) 87
Orient Electric 22 30 56 (50) (65) 73 2 83 16 - - 70 2 16
Aggregate Growth (%) (3) (23) (4) (42) (76) 83 58 113 47 39 27 (0) (21) 47

Page | 7
Appliances: Sector Update

Cables & wires

 Cables & wires saw price increases of ~30-40% in Q4FY21, led by a sharp rise
in commodity (copper) prices globally, driving value growth for companies.
 V-Guard and Havells were the top performers in the segment in Q4FY21. KEI
struggled in FY21, clocking a decline of 10% due to overall poor performance.

Revenue (INR
1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
mn)
Polycab 16,375 19,222 21,696 18,605 8,252 18,268 24,073 25,442 76,035 56,082 63,869 70,643 75,898 76,035
KEI 8,549 9,983 10,995 10,332 6,463 8,707 9,899 10,675 35,743 22,372 27,265 39,271 39,859 35,743
Havells 7,785 8,213 7,121 6,823 4,611 7,847 9,052 10,292 31,802 23,793 26,001 32,098 29,942 31,802
V-Guard 2,632 2,768 2,709 2,422 1,827 2,823 3,559 3,827 12,035 9,409 10,126 11,660 10,530 12,035
Finolex 8,077 7,158 7,024 6,514 3,771 6,394 8,302 9,214 27,681 24,448 28,151 30,476 28,773 27,681
Total 46,373 50,541 52,921 47,385 26,438 46,907 58,799 64,381 196,526 135,024 159,246 187,901 197,404 196,526

Revenue YoY Gr. (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Polycab 8 21 18 (12) (50) (5) 11 37 0 7 23 11 7 0
KEI 22 23 25 6 (24) (13) (10) 3 (10) 17 22 23 19 (10)
Havells 4 7 (13) (24) (41) (4) 27 51 6 9 9 24 (7) 6
V-Guard 1 9 5 (32) (31) 2 31 58 14 (24) 12 12 (7) 14
Finolex 2 0 (6) (21) (53) (11) 18 41 (4) 4 15 9 (7) (4)
Weighted Avg. Gr. (%) 8 15 12 (12) (41) (7) 12 35 (0) 6 19 15 5 (0)

EBIT Margin (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Polycab 11.4 10.5 11.9 15.2 3.0 13.9 12.8 13.1 12.1 7.1 10.1 11.8 12.3 12.1
KEI 10.4 10.4 12.0 11.2 11.6 12.8 12.6 9.8 11.6 12.0 10.8 10.9 11.1 11.6
Havells 10.9 12.7 10.8 9.8 7.9 14.3 11.3 14.8 12.7 7.6 9.1 8.5 11.1 12.7
V-Guard (Electrical Seg) 5.0 10.2 7.7 7.9 3.0 9.4 8.8 11.2 8.8 9.5 7.5 7.4 7.7 8.8
Finolex 14.6 19.5 15.6 20.9 12.5 14.4 14.1 14.8 14.2 17.3 18.0 16.0 17.5 14.2

EBIT Gr (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Polycab 27 15 (15) 36 (87) 26 19 18 (1) 2 61 30 11 (1)
KEI 22 24 28 9 (15) 7 (5) (10) (6) 19 10 24 20 (6)
Havells 33 84 11 (20) (57) 7 34 128 22 5 30 16 21 22
V-Guard (Electrical Seg) (28) 82 35 (45) (58) (5) 50 124 31 4 (15) 11 (3) 31
Finolex (16) 50 (8) (3) (60) (34) 7 0 (22) 23 19 (3) 2 (22)
Aggregate Growth (%) 11 36 (2) 8 (62) 3 14 24 (2) 12 29 17 12 (2)

Page | 8
Appliances: Sector Update

OEM
 Dixon continued to see strong revenue growth, led by growth in the mobile
phone segment.
 With pre-buying activities seen in the cooling segment, Amber saw 22%
revenue growth in Q4FY21, while, on an LTM basis, it saw 24% YoY revenue
decline.
 During the LTM, Dixon delivered strong 47% revenue growth, mainly aided
by its mobile segment.

Revenue (INR
1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
mn)
Dixon 11,469 14,020 9,938 8,574 5,169 16,387 21,828 21,097 64,482 24,570 28,416 44,015 44,001 64,482
Amber 12,359 6,232 7,884 13,152 2,595 4,079 7,647 15,984 30,305 16,519 21,281 38,436 39,628 30,305
Total 23,829 20,252 17,822 21,726 7,764 20,467 29,475 37,081 94,787 41,089 49,697 82,452 83,629 94,787

Revenue YoY Gr.

1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
(%)
Dixon 94 90 25 (0) (55) 17 120 146 47 77 16 5 47 47
Amber 75 89 52 10 (79) (35) (3) 22 (24) 51 29 29 44 (24)
W. Avg. Gr. (%) 84 90 37 6 (63) 7 88 92 24 66 21 17 46 24

EBIT Margin (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Dixon 3.9 3.9 4.2 5.2 1.5 4.8 4.1 3.2 3.8 3.3 3.4 3.8 4.2 3.8
Amber 7.8 2.5 4.2 6.1 (10.9) (0.4) 5.2 7.4 4.3 5.5 6.3 5.5 5.7 4.3

EBIT Gr (%) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 LTM FY17 FY18 FY19 FY20 FY21
Dixon 112 98 26 44 (83) 43 114 50 30 67 20 17 65 30
Amber 127 (1,231) 151 (17) (129) (110) 20 48 (42) 9 49 12 49 (42)
Aggregate Growth (%) 122 166 61 (2) (115) 9 73 49 (9) 30 35 14 56 (9)
Source: Companies, HSIE Research

Page | 9
Appliances: Sector Update

HSIE CD Index - Revenue Growth (Ex-OEM and Project HSIE CD Index - EBIT Growth (Ex-OEM and Project
Business) Business)
60
45 80 65
44
38 54
40 32 34 60 44
27 35 39
22 21 40 25
17 21 18 20 22
20 11 11 13 15 14 14 15
7 20 7 7 8 4
5
1 -
-
(1) (20) (8) (9)
(19)
(20) (12) (40)
(60)
(40)
(80)
(76)
(60) (52) (100)
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19

FY16
FY17
FY18
FY19
FY20
FY21

1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19

FY16
FY17
FY18
FY19
FY20
FY21
Source: Companies, HSIE Research Source: Companies, HSIE Research

Cooling Products - Revenue Growth Cooling Products - EBIT Growth

40 33 100 91
30 27 29
24
80
17
20 10 10 11 10 51 54
5 6 60 42
3 2 3 2
40 28 28
- 18
19 9
(2) (3) 20 4 1 1
(20) (13) -
(20) (1)
(7) (8)
(40) (24)
(40)
(38)
(60)
(60) (54)(51)
(62) (80)
(80) (100) (83)
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21

1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19

3Q FY18

1Q FY19
2Q FY19
3Q FY19
4Q FY19
4Q FY18
FY16
FY17
FY18
FY19
FY20
FY21

FY16
FY17
FY18
FY19
FY20
FY21
Source: Companies, HSIE Research Source: Companies, HSIE Research

Consumer Durables - Revenue Growth Consumer Durables - EBIT Growth

60 50 100 86
80
40 36 59
31 60
22 25 22 35 33
16 19 13 16 17 40 26
36
20 13 11 19 18 16 20
10 8 12 8 7 11 14 18 11
20
0 5 5
- -
(20) (6)
(8)
(20)
(40) (25)
(60)
(40)
(80)
(60) (48) (100) (81)
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21

1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19

3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
FY17
FY18
FY19
FY20
FY21

FY16
FY17
FY18
FY19
FY20
FY21
FY16

Source: Companies, HSIE Research Source: Companies, HSIE Research

Page | 10
Appliances: Sector Update

Lighting & Fixtures - Revenue Growth Lighting & Fixtures - EBIT Growth
40 150
31
30 113
19 17 22 20
16 17 14
20 14 100
10 12 8
83
7
10 58
47 47
- 50 39
21 27
(2) (1) (2) (2)
(10)
(7)
(20) -
(30) (3) (4) (7) (0)
(25)
(26) (31)(21) (23) (21)
(40) (50)
(39) (42)
(50)
(49) (76)
(60) (100)
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21

1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19

3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
3Q FY18

FY16
FY17
FY18

FY20
FY21

FY16
FY17
FY18
FY19
FY20
FY21
FY19

Source: Companies, HSIE Research Source: Companies, HSIE Research

Cables & Wires - Revenue Growth Cables & Wires - EBIT Growth
40 35 60
30 24 22 36
40 29
19 24
20 15 16 14 15 15 21 22 18
12 12 12 11 14 17
8 20 11 8 12 12
10 6 5
1 3
- -
(0) (3) (2) (2)
(10) (7) (20)
(15)
(20) (12)
(40) (29)
(30)
(60)
(40)
(62)
(50) (41)
(80)
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19

1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
3Q FY18
FY16
FY17
FY18
FY19
FY20
FY21

FY16
FY17
FY18

FY20
FY21
FY19
Source: Companies, HSIE Research Source: Companies, HSIE Research

OEM - Revenue Growth OEM - EBIT Growth

120 200
166
100 84
90 88 92
150 122
80 66
61
100 83
60 46 73
37 61 61 56
31 49
40 24 31 30 35
21 17 50 26
14
20 5 1 6 7 4 9
-
-
(1) (2) (9)
(20) (3) (50)
(46) (38)
(40) (21)
(100)
(60)
(63) (115)
(80) (150)
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21

1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY20
3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19

3Q FY18
4Q FY18
1Q FY19
2Q FY19
3Q FY19
4Q FY19
FY16
FY17
FY18
FY19
FY20
FY21

FY16
FY17
FY18
FY19
FY20
FY21

Source: Companies, HSIE Research Source: Companies, HSIE Research

Page | 11
Appliances: Sector Update

Sector Valuation
The sector is trading at ~42x P/E (one-year forward), having seen a sharp rerating in
the past 10 years (20x in 2010). We believe the category winners will further gain
market share in the current phase and command valuation premiums. Although
earnings may be volatile in the near term, rich valuations would sustain, in our
view. Further, the category winners hold the potential for quick turnarounds;
therefore, the near-term disruption offers a good entry point to investors.
Sector P/E (12-month Rolling Forward) CD Universe: Earnings vs. Valuation
Appliance Sector P/E (x) 10 Years' Avg P/E (x) (%) EPS Gr (%) P/E (x)
5 Years' Avg P/E (x) 3 Years' Avg P/E (x) 80 45x
55 40x
60
35x
47 40 30x
25x
20
39 20x
0 15x
31 10x
-20
5x
23 -40 0x
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22E
15
Jul-11 Jul-13 Jul-15 Jul-17 Jul-19 Jul-21

Source: Companies, Bloomberg, HSIE Research Source: Companies, Bloomberg, HSIE Research

CD universe: profit mix CD universe: market cap mix

IFB, 2%
Orient Ele,Hitachi, 1% Bajaj Elec, IFB, 2% Hitachi, 2% Bajaj Elec,
2% 3% Orient Ele, 4%
Amber, 2% Havells, Havells,
Symphony, 23% Amber, 4% 2%
26%
2% Symphony,
Blue Star,
2% 3%
Blue Star,
Dixon, 4%
3%
TTK , 5%
Dixon, 8%
V-Guard,
4% Polycab, 7%
TTK , 4%
Polycab,
Crompton, 18% V-Guard,
12% 4%
Crompton, Whirlpool,
Voltas, 11% 9% 11%
Whirlpool, Voltas, 12%
8%

Source: Companies, Bloomberg, HSIE Research Source: Companies, Bloomberg, HSIE Research

Page | 12
Appliances: Sector Update

Consumer Durables Universe: Valuation Trend

1-Yr Fwd PE (x) Rerating/Derating
Companies 10 Yr 5 Yr 3 Yr 10 Yr 5 Yr 3 Yr
Current
Avg Avg Avg Avg Avg Avg
Havells 35 45 49 54 56% 20% 12%
Voltas 26 34 37 42 62% 23% 13%
Crompton na na 33 45 na na 36%
Symphony 42 57 49 36 -14% -36% -26%
V-Guard 33 45 44 41 24% -10% -8%
TTK Prestige 37 39 37 45 21% 16% 21%
Blue Star 21 44 48 39 83% -12% -19%
Orient Electric na na 40 49 na na 20%
Whirlpool 36 48 52 43 18% -12% -19%
IFB Industries 40 56 56 25 -38% -55% -56%
Johnson-Hitachi 49 65 68 44 -10% -32% -36%
Dixon na na 8 15 na na 81%
Amber na na 33 42 na na 26%
Hawkins 29 29 29 39 33% 34% 36%

Polycab na na na 36 na na na

Appliances 30 34 31 42 42% 23% 34%

Nifty-50 18 21 21 18 -4% -15% -18%

Consumer Durables Universe: Stock Performance

Companies 1M (%) 3M (%) 6M (%) 12M (%) 3Yr (%) 5Yr (%)
Voltas 0.9 10.4 8.8 73.9 87.9 209.8
Blue Star 5.4 3.6 12.1 75.4 31.0 88.6
Symphony 1.1 (10.8) 4.1 28.0 (17.2) (9.1)
Johnson-Hitachi 2.2 (5.3) (13.0) 8.0 16.8 63.6
Whirlpool (1.1) 10.4 (18.9) (3.4) 42.6 156.8
IFB Industries (2.5) 0.2 (24.4) 168.0 (3.8) 172.0
Havells 9.3 8.4 (3.7) 81.8 94.4 198.5
V-Guard (3.2) 13.0 8.6 50.8 32.2 154.0
Polycab 0.9 38.3 52.5 131.9 N/A N/A
Crompton 10.5 26.7 6.9 85.8 97.8 N/A
Bajaj Electricals 4.4 (7.2) 35.6 144.4 95.6 337.7
Orient Electric 4.8 19.9 40.7 83.8 N/A N/A
Finolex Cables 3.8 23.1 42.5 91.8 61.6 94.5
KEI Industries 1.5 44.0 39.0 95.0 69.0 508.6
Surya Roshni 2.1 10.4 47.8 341.1 69.7 229.5
TTK Prestige 6.7 10.4 51.0 64.0 88.0 132.2
Butterfly 3.9 22.2 46.5 504.1 147.8 348.5
La Opala (3.3) 32.8 19.9 38.1 11.3 (1.3)
Hawkins (0.9) 8.6 1.6 43.2 118.7 125.5
Dixon 3.1 16.0 55.4 233.9 N/A N/A
Amber 10.8 (4.6) 21.0 104.3 N/A N/A
BSE Consumer Durables Index 1.3 11.6 13.5 67.5 78.9 196.2
Nifty 50 0.4 10.2 8.0 42.9 43.1 85.1
Note: As on 20th July, 2021
Green indicates outperformance to Nifty 50 during the respective period
Red indicates underperformance to Nifty 50 during the respective period

Page | 13
 Appliances: Sector Update

Peer Set Comparison

Mcap EPS (Rs) P/E (x) EV/EBITDA (x) Core RoCE (%)
CMP
Company (INR Reco TP
(INR/sh) FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E
bn)
Havells 690 1,103 ADD 1,200 19.0 22.5 25.3 58.2 49.1 43.6 38.2 32.3 28.7 27.0 31.5 33.5
Voltas 339 1,024 ADD 1,100 23.2 28.5 32.2 44.1 35.9 31.7 37.3 30.1 27.1 28.6 30.7 29.6
Crompton 287 459 BUY 475 9.8 11.5 13.1 47.0 39.8 35.1 35.3 29.7 26.0 43.7 46.2 47.8
V-Guard 106 249 ADD 265 5.9 7.2 8.6 42.4 34.6 28.9 29.7 24.7 20.4 24.8 31.3 34.4
Symphony 76 1,080 ADD 1,200 28.1 33.4 37.8 38.4 32.3 28.6 27.5 22.9 20.7 44.7 58.5 68.2
TTK Prestige 125 9,016 ADD 9,165 195.9 220.4 249.4 46.0 40.9 36.2 30.7 27.4 24.2 26.5 26.9 27.5
Source: Company, HSIE Research, CMP is of 20 July

Changes in Estimates
Rating TP (Rs) Target P/E (x) Old EPS New EPS Est Chg (%)
Company
Old New Old New Old New FY22E FY23E FY22E FY23E FY22E FY23E
Havells ADD ADD 1,150 1,200 50 50 18.6 22.3 19.0 22.5 2.1 1.0
Voltas ADD ADD 1,100 1,100 37 37 22.7 28.4 23.2 28.5 2.4 0.2
Crompton BUY BUY 460 475 40 40 9.6 11.5 9.8 11.5 1.6 -
V-Guard ADD ADD 265 265 35 35 5.9 7.2 5.9 7.2 - -
Symphony ADD ADD 1,250 1,200 35 35 28.1 33.4 28.1 33.4 - -
TTK Prestige ADD ADD 8,880 9,165 40 40 188.7 215.8 195.9 220.4 3.8 2.1

Companies - P/E Bands

Havells P/E Band Voltas P/E Band Crompton P/E Band
P/E 3 Yr Avg P/E P/E 3 Yr Avg P/E
P/E 3 Yr Avg P/E
5 Yr Avg P/E 10 Yr Avg P/E 5 Yr Avg P/E 10 Yr Avg P/E
60.x
66.x 66.x
50.x
52.x 52.x
40.x
38.x 38.x
30.x
24.x 24.x
20.x
10.x 10.x

Aug-19
Aug-16

Aug-17

Aug-18

Aug-20
Feb-17

Feb-18

Feb-19

Feb-20

Feb-21
Jul-11

Jul-16

Jul-20
Jul-12
Jul-13
Jul-14
Jul-15

Jul-17
Jul-18
Jul-19

Jul-21

Jul-11
Jul-12
Jul-13
Jul-14
Jul-15
Jul-16
Jul-17
Jul-18
Jul-19
Jul-20
Jul-21

Symphony P/E Band V-Guard P/E Band TTK Prestige P/E Band
P/E 3 Yr Avg P/E P/E 3 Yr Avg P/E P/E 3 Yr Avg P/E
5 Yr Avg P/E 10 Yr Avg P/E 5 Yr Avg P/E 10 Yr Avg P/E 5 Yr Avg P/E 10 Yr Avg P/E
120.x 66.x 60.x
55.x 48.x
80.x 44.x
36.x
33.x
24.x
40.x 22.x
11.x 12.x

0.x 0.x 0.x

Jul-12

Jul-17
Jul-11

Jul-13
Jul-14
Jul-15
Jul-16

Jul-18
Jul-19
Jul-20
Jul-21

Jul-12
Jul-11

Jul-13
Jul-14
Jul-15
Jul-16
Jul-17
Jul-18
Jul-19
Jul-20
Jul-21
Jul-14
Jul-11
Jul-12
Jul-13

Jul-15
Jul-16
Jul-17
Jul-18
Jul-19
Jul-20
Jul-21

Source: Bloomberg, Companies, HSIE Research

Page | 14
Appliances: Sector Update

Sector Outlook and Preview Q1FY22

Most categories have seen recovery, post the easing of lockdown restrictions in June
2021. Both B-B and B-C are seeing strong traction, led by healthy underlying demand,
with category leaders gaining market shares. B-B was a drag in FY21 even though
leading companies could deliver healthy growth in FY21 due to a strong B-C. B-B,
however, seems to have picked up in Q1FY22, is in a good shape, and expects to sustain
the momentum during FY22. Our channel checks suggest strong recovery in Jun-21 for
electrical and cooling product categories. Revenues of most companies are expected to
fall by ~15% in Q1FY22 vs. Q1FY20 as compared to the 50-60% YoY decline in Q1FY21.
Our checks also suggest that recovery is strong in July too and can sustain in the
coming quarters. This improves our confidence in our earnings estimates and we
expect leading companies to be able to sustain the earnings show.
Preview – Q1FY22
NET SALES (Rs bn) EBITDA (Rs bn) EBITDA Margin (%) APAT (Rs bn) Adj. EPS (Rs/sh)
Companies Q1 QoQ YoY Q1 QoQ YoY Q1 QoQ YoY Q1 QoQ YoY Q1 Q4 Q1
FY22E (%) (%) FY22E (%) (%) FY22E (bps) (bps) FY22E (%) (%) FY22E FY21 FY21
Havells 24.8 -25 68 3.3 -35 152 13.3 -188 446 2.2 -28 243 3.5 4.8 1.0
Voltas 21.8 -18 68 2.3 -29 250 10.7 -175 558 2.1 -12 158 6.4 7.2 2.5
Crompton 11.2 -26 56 1.5 -34 49 13.4 -155 -62 1.2 -31 54 1.8 2.7 1.2
V-Guard 5.9 -30 46 0.6 -45 572 10.3 -269 803 0.4 -36 1103 1.0 1.6 0.1
Symphony 1.1 -48 176 0.1 -76 -283 13.2 -1506 3325 0.2 -64 1667 2.5 7.0 0.1
TTK Prestige 3.7 -33 79 0.6 -43 641 15.7 -277 1191 0.4 -43 917 30.0 53.0 3.0
Aggregates 68.6 -25 65 8.5 -37 176 12.4 -228 496 6.5 -28 183

Havells India Q1FY22 Preview

(INR mn) Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q1FY22E
Net Sales 27,127 22,306 22,699 22,161 14,791 24,518 31,659 33,312 25,982 24,830
YoY (%) 4% 2% -10% -20% -45% 10% 39% 50% 76% 68%
EBITDA 2,781 2,351 2,690 2,453 1,309 4,207 5,081 5,057 3,531 3,303
Margin (%) 10.3% 10.5% 11.9% 11.1% 8.8% 17.2% 16.0% 15.2% 13.6% 13.3%
PAT 1,761 1,803 1,995 1,772 633 3,249 3,491 3,023 2,343 2,175
YoY (%) -16% 1% 2% -12% -64% 80% 75% 71% 270% 243%
Switchgears
Net Sales 3,419 3,638 3,309 3,027 1,902 3,703 4,371 4,633 3,734 3,233
YoY (%) 0% -1% -5% -14% -44% 2% 32% 53% 96% 70%
Contribution 1,419 1,535 1,410 1,108 635 1,559 1,845 1,784 1,441 1,196
Margin (%) 41.5% 42.2% 42.6% 36.6% 33.4% 42.1% 42.2% 38.5% 38.6% 37.0%
Cable & Wires
Net Sales 7,785 8,213 7,121 6,823 4,611 7,847 9,052 10,292 8,072 7,839
YoY (%) 4% 7% -13% -24% -41% -4% 27% 51% 75% 70%
Contribution 1,285 1,510 1,246 921 563 1,365 1,376 1,883 1,526 1,333
Margin (%) 16.5% 18.4% 17.5% 13.5% 12.2% 17.4% 15.2% 18.3% 18.9% 17.0%
Light
Net Sales 2,504 2,536 2,760 2,343 1,380 2,646 3,533 3,287 2,099 2,346
YoY (%) 5% -2% -8% -31% -45% 4% 28% 40% 52% 70%
Contribution 801 748 836 677 275 820 1,215 1,085 628 751
Margin (%) 32.0% 29.5% 30.3% 28.9% 19.9% 31.0% 34.4% 33.0% 29.9% 32.0%
ECD
Net Sales 5,616 4,902 5,359 4,177 3,017 5,799 7,831 7,124 5,760 5,129
YoY (%) 24% 15% 1% -14% -46% 18% 46% 71% 91% 70%
Contribution 1,578 1,232 1,410 990 664 1,577 2,005 1,724 1,238 1,205
Margin (%) 28.1% 25.1% 26.3% 23.7% 22.0% 27.2% 25.6% 24.2% 21.5% 23.5%
Lloyds
Net Sales 6,520 1,800 3,004 4,579 3,062 2,804 5,116 5,906 4,944 4,890
YoY (%) -8% -30% -16% -14% -53% 56% 70% 29% 61% 60%
Contribution 1,050 54 234 444 300 384 675 785 613 636
Margin (%) 16.1% 3.0% 7.8% 9.7% 9.8% 13.7% 13.2% 13.3% 12.4% 13.0%

Page | 15
Appliances: Sector Update

Voltas Q1FY22 Preview

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
(INR mn)
FY20 FY20 FY20 FY20 FY21 FY21 FY21 FY21 FY22E
Net Sales 26,540 14,219 14,925 20,896 12,969 16,125 19,946 26,517 21,758
YoY (%) 24% 0% 0% 1% -51% 13% 34% 27% 68%
EBITDA 2,912 1,059 976 1,920 668 980 1,459 3,307 2,333
Margin (%) 11.0% 7.4% 6.5% 9.2% 5.1% 6.1% 7.3% 12.5% 10.7%
PAT 1,663 1,073 880 1,595 818 797 1,287 2,388 2,108
YoY (%) -11% 0% 13% 13% -51% -26% 46% 50% 158%
UCP
Revenue 17,488 5,256 6,005 11,989 7,071 5,717 8,396 14,367 11,500
YoY (%) 47% 19% 14% 20% -60% 9% 40% 20% 63%
EBIT 2,298 463 607 1,754 1,096 631 1,046 2,247 1,553
Margin (%) 13.1% 8.8% 10.1% 14.6% 15.5% 11.0% 12.5% 15.6% 13.5%
EMP
Revenue 8,241 8,093 8,081 8,046 5,181 9,278 10,167 11,038 9,326
YoY (%) -5% -10% -8% -18% -37% 15% 26% 37% 80%
EBIT 656 561 374 113 (393) 230 322 929 727
Margin (%) 8.0% 6.9% 4.6% 1.4% -7.6% 2.5% 3.2% 8.4% 7.8%
Engineering
Revenue 740 803 826 948 476 932 1,209 977 667
YoY (%) -4% 10% -1% 21% -36% 16% 46% 3% 40%
EBIT 239 253 231 269 197 288 320 338 233
Margin (%) 32.4% 31.5% 28.0% 28.4% 41.3% 30.9% 26.5% 34.6% 35.0%

Crompton Consumer Q1FY22 Preview

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
(INR mn)
FY20 FY20 FY20 FY20 FY21 FY21 FY21 FY21 FY22E
Net Sales 13,468 10,758 10,713 10,263 7,201 12,132 13,482 15,221 11,230
YoY (%) 12% 4% 4% -15% -47% 13% 26% 48% 56%
EBITDA 1,919 1,295 1,369 1,412 1,012 1,913 2,001 2,280 1,508
Margin (%) 14.2% 12.0% 12.8% 13.8% 14.1% 15.8% 14.8% 15.0% 13.4%
PAT 1,224 1,113 1,610 1,021 748 1,417 1,511 2,491 1,151
YoY (%) 17% 45% 102% -28% -39% 27% -6% 144% 54%
Lighting
Revenue 2,739 2,877 2,843 2,853 1,236 2,815 3,123 3,291 2,162
YoY (%) -2% -11% -11% -17% -55% -2% 10% 15% 75%
EBIT 141 151 196 219 75 331 383 529 270
Margin (%) 5.1% 5.2% 6.9% 7.7% 6.1% 11.7% 12.3% 16.1% 12.5%
ECD
Revenue 10,729 7,881 7,870 7,411 5,965 9,317 10,359 11,930 9,067
YoY (%) 16% 11% 11% -14% -44% 18% 32% 61% 52%
EBIT 2,173 1,514 1,561 1,482 1,223 1,960 2,046 2,163 1,587
Margin (%) 20.3% 19.2% 19.8% 20.0% 20.5% 21.0% 19.8% 18.1% 17.5%

Page | 16
Appliances: Sector Update

V-Guard Industries Q1FY22 Preview

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
(INR mn)
FY20 FY20 FY20 FY20 FY21 FY21 FY21 FY21 FY22E
Net Sales 6,994 6,193 6,266 5,366 4,058 6,167 8,274 8,491 5,938
YoY (%) 10% 4% 5% -27% -42% 0% 32% 58% 46%
EBITDA 712 776 594 452 91 739 1,136 1,099 609
Margin (%) 10.2% 12.5% 9.5% 8.4% 2.2% 12.0% 13.7% 12.9% 10.3%
PAT 525 497 429 325 36 481 770 683 436
YoY (%) 25% 30% 27% -45% -93% -3% 80% 110% 1103%
Electronics
Revenue 2,828 1,676 1,538 1,503 1,377 1,710 2,074 2,428 2,317
YoY (%) 18% 4% 1% -27% -51% 2% 35% 61% 68%
EBIT 496 284 244 213 93 306 512 531 232
Margin (%) 17.5% 16.9% 15.9% 14.1% 6.8% 17.9% 24.7% 21.9% 10.0%
Electricals
Revenue 2,632 2,768 2,709 2,422 1,827 2,823 3,559 3,827 2,318
YoY (%) 1% 9% 5% -32% -31% 2% 31% 58% 27%
EBIT 132 281 208 192 55 266 313 430 209
Margin (%) 5.0% 10.2% 7.7% 7.9% 3.0% 9.4% 8.8% 11.2% 9.0%
Consumer Durables
Revenue 1,534 1,750 2,020 1,441 855 1,634 2,641 2,237 1,304
YoY (%) 15% -4% 10% -19% -44% -7% 31% 55% 52%
EBIT 66 185 113 35 (87) 136 264 89 151
Margin (%) 4.3% 10.6% 5.6% 2.5% -10.2% 8.3% 10.0% 4.0% 11.6%

Symphony India Q1FY22 Preview

(INR mn) Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22E
Standalone
Net Sales 1,600 1,950 2,070 1,540 400 1,120 1,240 2,120 1,105
YoY (%) 103% 32% 30% 12% -75% -43% -40% 38% 176%
EBITDA 240 610 670 490 (80) 290 350 600 146
Margin (%) 15.0% 31.3% 32.4% 31.8% -20.0% 25.9% 28.2% 28.3% 13.2%
PAT 260 570 580 450 10 270 350 490 177
YoY (%) 420% 68% 35% 137% -96% -53% -40% 9% 1667%
Domestic
Revenue 1,480 1,890 1,780 1,360 340 1,050 1,180 1,740 954
YoY (%) 128% 33% 27% 13% -77% -44% -34% 28% 181%
EBIT 300 690 660 520 - 330 430 550 191
Margin (%) 20.3% 36.5% 37.1% 38.2% 0.0% 31.4% 36.4% 31.6% 20.0%
Exports
Revenue 120 60 290 180 60 70 60 380 152
YoY (%) -14% 0% 53% 0% -50% 17% -79% 111% 153%
EBIT 40 10 110 70 10 20 10 120 45
Margin (%) 33.3% 16.7% 37.9% 38.9% 16.7% 28.6% 16.7% 31.6% 30.0%

Page | 17
Appliances: Sector Update

TTK Prestige Q1FY22 Preview

(INR Mn) Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22E
Net Sales 4,336 5,736 5,461 3,835 2,085 5,902 6,794 5,549 3,736
YoY (%) 4% 4% -1% -14% -52% 3% 24% 45% 79%
EBITDA 563 865 830 352 79 860 1,182 1,025 587
Margin (%) 13.0% 15.1% 15.2% 9.2% 3.8% 14.6% 17.4% 18.5% 15.7%
PAT 365 803 609 209 41 622 865 824 416
YoY (%) 2% 49% 7% -52% -89% -23% 42% 295% 917%
Cookers
Revenue 1,399 1,820 1,582 1,160 579 1,651 2,043 1,730 1,100
YoY (%) -7% -3% -6% -16% -59% -9% 29% 49% 90%
Cookwares
Revenue 646 947 781 540 353 1,020 1,047 900 617
YoY (%) 5% 7% -9% -18% -45% 8% 34% 67% 75%
Appliances
Revenue 2,125 2,793 2,884 1,990 1,056 2,984 3,433 2,660 1,847
YoY (%) 10% 9% 3% -11% -50% 7% 19% 34% 75%
Others
Revenue 167 175 214 150 98 248 271 250 172
YoY (%) 12% -8% 29% -17% -41% 41% 26% 67% 75%

Page | 18
Appliances: Sector Update

Disclosure:
We, Naveen Trivedi, MBA, & Saras Singh, PGDM, authors and the names subscribed to this report, hereby certify that all of the views expressed in this
research report accurately reflect our views about the subject issuer(s) or securities. HSL has no material adverse disciplinary history as on the date of
publication of this report. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or
view(s) in this report.
Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative
or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding
the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material
conflict of interest.
Any holding in stock –NO
HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475.

Disclaimer:
This report has been prepared by HDFC Securities Ltd and is solely for information of the recipient only. The report must not be used as a singular basis of any
investment decision. The views herein are of a general nature and do not consider the risk appetite or the particular circumstances of an individual investor;
readers are requested to take professional advice before investing. Nothing in this document should be construed as investment advice. Each recipient of this
document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in securities of the companies
referred to in this document (including merits and risks) and should consult their own advisors to determine merits and risks of such investment. The
information and opinions contained herein have been compiled or arrived at, based upon information obtained in good faith from sources believed to be
reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy,
completeness or correctness. All such information and opinions are subject to change without notice. Descriptions of any company or companies or their
securities mentioned herein are not intended to be complete. HSL is not obliged to update this report for such changes. HSL has the right to make changes and
modifications at any time.
This report is not directed to, or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity who is a citizen
or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, reproduction, availability or use would be
contrary to law or regulation or what would subject HSL or its affiliates to any registration or licensing requirement within such jurisdiction.
If this report is inadvertently sent or has reached any person in such country, especially, United States of America, the same should be ignored and brought to
the attention of the sender. This document may not be reproduced, distributed or published in whole or in part, directly or indirectly, for any purposes or in
any manner.
Foreign currencies denominated securities, wherever mentioned, are subject to exchange rate fluctuations, which could have an adverse effect on their value or
price, or the income derived from them. In addition, investors in securities such as ADRs, the values of which are influenced by foreign currencies effectively
assume currency risk. It should not be considered to be taken as an offer to sell or a solicitation to buy any security.
This document is not, and should not, be construed as an offer or solicitation of an offer, to buy or sell any securities or other financial instruments. This report
should not be construed as an invitation or solicitation to do business with HSL. HSL may from time to time solicit from, or perform broking, or other services
for, any company mentioned in this mail and/or its attachments.
HSL and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of
the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a
market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any
other potential conflict of interests with respect to any recommendation and other related information and opinions.
HSL, its directors, analysts or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments
made or any action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates,
diminution in the NAVs, reduction in the dividend or income, etc.
HSL and other group companies, its directors, associates, employees may have various positions in any of the stocks, securities and financial instruments dealt
in the report, or may make sell or purchase or other deals in these securities from time to time or may deal in other securities of the companies / organizations
described in this report.
HSL or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject
company for any other assignment in the past twelve months.
HSL or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the
date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage
services or other advisory service in a merger or specific transaction in the normal course of business.
HSL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with
preparation of the research report. Accordingly, neither HSL nor Research Analysts have any material conflict of interest at the time of publication of this
report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. HSL may
have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.
Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of
the subject company. We have not received any compensation/benefits from the subject company or third party in connection with the Research Report.
HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg
(East), Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022) 2496 5066 Compliance Officer: Binkle R. Oza Email: complianceofficer@hdfcsec.com Phone: (022)
3045 3600 HDFC Securities Limited, SEBI Reg. No.: NSE, BSE, MSEI, MCX: INZ000186937; AMFI Reg. No. ARN: 13549; PFRDA Reg. No. POP: 11092018;
IRDA Corporate Agent License No.: CA0062; SEBI Research Analyst Reg. No.: INH000002475; SEBI Investment Adviser Reg. No.: INA000011538; CIN -
U67120MH2000PLC152193

HDFC securities
Institutional Equities
Unit No. 1602, 16th Floor, Tower A, Peninsula Business Park,
Senapati Bapat Marg, Lower Parel, Mumbai - 400 013
Board: +91-22-6171-7330 www.hdfcsec.com

Page | 19