Heranba Industries Q3 Results Review - Multiple Headwinds To Keep Performance Under Pressure: Yes Securities
Usually, in Q3 and Q4 demand from exports is buoyant, but due to on‐going global scenario, demand continues to remain lackluster.
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Yes Securities Report
Heranba Industries Ltd. posted a disappointing set of numbers wherein consolidated revenue declined sharply by 30% YoY and 34% QoQ to Rs 2.76 billion. Due to benign demand and higher channel inventory, revenue from technical segment (49% of revenue) declined sharply by 51% YoY and 45% QoQ.
Heranba Industries reported lowest quarterly margin of 8.6%, as compared to 18% in Q3 FY22 and 15.6% in Q2 FY23. Margin contracted due to high inventory cost and low volume uptake.
Usually, in Q3 and Q4 demand from exports is buoyant, but due to on‐going global scenario, demand continues to remain lackluster. However, demand from China (25% of exports) is likely to improve post Chinese New‐year.
Moreover, management expects flattish top‐line growth for FY23 (earlier 12‐15% growth guidance) and guided for 18‐20% growth in FY24E, which will be driven by better demand coupled with contribution from new capacities, introduction of new products and supply to new geographies.
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