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Actis-controlled Halonix Q3 Down Sequentially With Higher Provisioning

10 February, 2012

Private equity-backed lighting products company Halonix scrip crashed almost 6 per cent on Friday even as the company reported a net profit of Rs 2.78 crore for the quarter ended December 31, 2011, compared to the net loss of Rs 6.17 crore in the year-ago period, due to the deterioration in sequential earnings.

The company’s net profit declined 72 per cent, compared to the second quarter ended September 30, 2011, due to provisioning for doubtful debt and obsolete inventories worth Rs 5.9 crore in the last quarter.

Halonix’s revenues rose 12.6 per cent year-on-year while net sales inched up 2.4 per cent sequentially over Q2 FY12.

Private equity firm Actis owns 66 per cent in Halonix (since 2007), buying a majority stake in one of the rare control deals in the Indian private equity space.

In 2010, the PE firm had toyed with the idea of buying out the general lighting business of Halonix (formerly Phoenix Lamps) after hiving it off from the firm and turning Halonix into a focused automotive lighting company. The move would have separated the loss-making general lighting business from the firm.

However, the deal was scrapped and around a year ago, the company decided to continue with both automotive and general lighting as two separate and distinct lines of business. Last May, it had also called off certain overseas acquisition moves.

Over the past one year, there had been a string of top management changes at Halonix including the exit of the then managing director Rajesh Kochhar who was replaced by Gurvikram Singh, the appointment of Pranay Gandhi as the new CFO and the inclusion of PP Vora as the chairman of the board.

Halonix is in the business of making halogen lamps for automobiles, including two & three-wheelers, passenger cars, commercial vehicles and off-road applications. It is also in the business of branded general lighting, mostly compact fluorescent lamps (CFL).

More than half of the total revenue is generated from the auto lamps business which is also the cash cow in terms of margins. However, the general lighting business has also been growing and for the second quarter ended September 2011, segment loss from that business was cut to just Rs 6 lakh, compared to Rs 9.9 crore for the previous quarter ended June 30.


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Actis-controlled Halonix Q3 Down Sequentially With Higher Provisioning

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