February 18, 2024
Butterfly Gandhimathi Appliances Limited - Weak Q3 Results Impact Share Price
Finance Stock Markets

Butterfly Gandhimathi Appliances Limited – Weak Q3 Results Impact Share Price

Butterfly Gandhimathi Appliances Limited – Weak Q3 Results Impact Share Price/Mint

Butterfly Gandhimathi Appliances Limited – Weak Q3 Results Impact Share Price

  • Share Price Movement:
  • BGA’s share price slumped over 6% to touch a 52-week low at ₹874.95 on BSE.
  • Opening at ₹900.05, it touched an intraday high of ₹908.
  • The stock has fallen 36.89% in the past year, underperforming its sector by 120.04%.
  • Technical Analysis and Outlook:
  • Butterfly Gandhimathi share price has been under pressure for the last couple of weeks, experiencing an extended selloff.
  • Analysts advise caution and refraining from bottom hunting, expecting the stock to remain weak.
  • Traders are suggested to use any bounce to exit long positions.
  • Support is identified at ₹810, while resistance is at ₹930.
  • Q3 Financial Performance:
  • Operating revenue for Q3 was ₹238 crore, a 4% decrease YoY, attributed to a decline in the B2B segment, especially corporate sales.
  • Profit after taxes fell 118% YoY for the quarter ending in December.
  • EBITDA saw an 89% decline, and the material margin shrank by 430 basis points YoY to 34.3%.
  • Increased absorption costs and Diwali promotions were cited as factors affecting material margins.
  • Business Highlights:
  • Revenue from core categories grew during the quarter, accompanied by market share gains.
  • Growth in core categories was driven by new product launches, with a significant contribution from premium segments.
  • Focus on channel development resulted in sustained growth in retail, regional chain stores, and e-commerce sellouts.
  • Subdued EBITDA margins were attributed to competitive intensity, increased employee expenses, and higher advertising and promotional spends.
  • Investor Holding:
  • As of December 2023, Aditya Birla Sun Life (ABSL) Trustee Private Limited A/C Aditya Birla Sun Life Small Cap Fund holds a 2.41% stake in Butterfly Gandhimathi Appliances.

Summary:
Butterfly Gandhimathi Appliances faced a significant drop in share price following weak Q3 results. The decline was attributed to decreased B2B segment sales, impacting revenue and profitability. Analysts suggest caution and recommend monitoring support and resistance levels for potential trading strategies. The company highlighted growth in core categories and market share gains but noted challenges in EBITDA margins due to various factors. The influence of competitive intensity on financial performance underscores the need for careful analysis and strategic decisions for investors.

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