A Short review on Hawkin’s company

Enterprise

Good brands like Hawkins, Futura (premium segment) and Miss Mary (value segment)

Known for quality products with positive customer reviews on all online shopping platforms.

Strong distribution network through authorised dealers

As on March 2020, firm had 45 patents and has not imported any technology in recent times.

Hawkins has 30% market share in the Pressure Cooker Segment

Too much revenue reliance on pressure cookers


Industry

Govt’s initiatives for cooking on clean fuel

The government has decided to make ISI mark compulsory for all the pressure cookers from 2021, this is good for all organised players.

Main competitors are TTK Prestige and Butterfly Gandhimati Appliances, competitors typically provide discounts, but there are no major discounts by Hawkins which shows their pricing power.


Financials

3 year and 5 year profit growth are more than 15% even though the sales have not grown with the same pace

More than 55% ROCE in last 10 years consistently

High dividend pay-out from last 10 years, but in FY20 the management decided not to pay any dividend to keep some cash handy for tough situation posed by COVID. In FY21, an interim dividend has already been declared.

Tight cost control on Ad spends and employee costs


Governance

As of June 2020, SBI fund owned 8.66% and Kotak Mahindra Mutual Fund owned 5.34% of this company

The CEO & MD, Mr. Subhadip Dutta Choudhury, has grown to this position starting as a management trainee in 1992.


Valuation

In last 10 Year, the stock price has grown with a CAGR of 16.86 %

Stock trading at a lower PE (41.8) than the industry PE reported in ACE Equity (51.87)

Low 3Y beta with BSE MidCap and BSE Small Cap Indices

Stock trading above the median PE of last 3 years

Having worked several years into Life Insurance, Health Insurance, Mutual Funds & Closely with people into financial planning i am now putting my first step in investment advisory

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