Towards the end of second quarter ended Sep 2019, the company's wholly owned stepdown subsidiary Horwood Homewares has acquired 51% stake in Horwood Life. The consolidated results for Q3FY20 and 9mFY20 include the financials of the subsidiary also and hence these figures are not comparable with corresponding previous period.

Consolidated operating margin contracted by 70 bps to 14.1% hurt largely by higher staff and OE even while the material cost and cost of traded goods stand lower. Material cost as % of sales net of stocks was down by marginal 20 bps to 19.9%. The cost of traded goods was down by sharp 280 bps to 37.1%. But with staff cost stand higher by 80 bps to 8.5% and OE up by 160 bps to 19.3% the OPM contracted marginally. The OE cost was inflated to the extent of Rs 0.19 crore of cost relating to acquisition of Horwood Life Business.

• Standalone sales was down by 1% to Rs 546.07 crore and with 30 bps decline in OPM to 15.2%, the fall at operating profit was 3% to Rs 83.03 crore. But the PBT was down by 7% to Rs 79.05 crore hit by lower OI and higher depreciation. Eventually the PAT was up by 7% to Rs 60.91 crore gained by lower tax, which was down by 35% to Rs 18.14 crore.
• Marginally lower standalone sales was largely due to lower cooker and cookware sales which was down by 7% (to RS 158 crore) and 9% (to RS 78 crore ) respectively even as the sales of appliances was up by 3% (to Rs 288 crore).
• Export sales grew by around 19% to RS 11.41 crore. In domestic market the weak sales for the period was largely due to rural stress as well as subdued corporate gifting due to slowdown in the economy. Moreover the company in-order to ensure clearing of inventory of earlier models of cookers has deliberately kept the primary sales of new models under control during the quarter.
• On deducting standalone sales from consolidated sales, the sales of UK Subsidiaries was down by 1% to Rs 41.2 crore. At PAT level the loss stood at Rs 0.71 crore compared to a profit of Rs 1.41 crore in the corresponding previous period.

Nine-month performance

Consolidated sales was up by 2% to Rs 1654.76 crore. But with OPM contract by 20 bps to 13.7% the operating profit was flat (up 0%) at Rs 226.49 crore. And the PBT was lower by 2% to Rs 216.23 crore hit largely by 29% increase in depreciation to Rs 25.37 crore despite OI stand higher and interest cost stand lower. However gained by lower taxation (down 45% to Rs 39.88 crore), the PAT was eventually higher by 19% to Rs 176.35 crore.