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Honeywell Automation India Q4 Review - Weak Execution Impacts Earnings: ICICI Securities

Honeywell Automation India Q4 Review - Weak Execution Impacts Earnings: ICICI Securities

<div class="paragraphs"><p>Warehouse robots and AI-powered systems used for supply chain industry manufactured by Honeywell Automation India Ltd. (Source: Company website)</p></div>
Warehouse robots and AI-powered systems used for supply chain industry manufactured by Honeywell Automation India Ltd. (Source: Company website)

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ICICI Securities Report

Honeywell Automation India Ltd.’s performance continued to be weak for the ninth consecutive quarter. Revenues declined both YoY/QoQ by ~1%/22% to Rs 6.7 billion in Q4 FY22.

Execution was impacted by travel restrictions and supply chain disruptions, further aggravated by the Russia-Ukraine war.

Ebitda declined 32% YoY to Rs 873 million due higher input costs and lower operating leverage, resulting in 30% YoY decline in profit after tax to Rs 727 million.

Ebitda margin of 13.1%, though in line with our estimates, contracted 610 basis points/110 bps YoY/QoQ.

Average cashflow generation remains healthy at Rs 2.5 billion over the past five years. With the government’s ongoing push towards investing in infrastructure, we see an increased traction towards automation across multiple industries.

Also, the recent spike in crude oil prices augurs well for Honeywell Automation India due to its high market share in the oil and gas industry.

Click on the attachment to read the full report:

ICICI Securities Honeywell Automation Q4FY22 Results Update.pdf

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