StockAxis

Hawkins Cookers Ltd

Quarterly Result - Q1YFY23

Hawkins Cookers Ltd

Consumer Durables - Domestic Appliances

Current

CMP
Rs. 5755
Rating:
Hold
August 04, 2022

Previous

Rating:
Hold

Stock Info

BSE
508486
NSE
HAWKINCOOK
Bloomberg
HAWK:IN
Reuters
HWKN.BO
Sector
Consumer Durables - Domestic Appliances
Face Value (Rs)
10
Equity Capital (Rs cr)
5
Mkt Cap (Rs cr)
3072.04
52w H/L (Rs)
6570.00 - 4932.05
Avg Daily Vol (BSE+NSE)
598

Shareholding Pattern

(as on 30-Jun)
%
Promoter
56.03
FIIs
0.31
DIIs
17.05
Public & Others
26.61
Source: Ace equity, StockAxis Research

Price performance

Return (%)
1m
3m
12m
Absolute
10.13
9.86
-12.68
Sensex
9.51
4.72
7.23
Source: Ace equity, StockAxis Research

Indexed Stock Performance

Hawkins Cookers Ltd Sensex
Hawkins Cookers Ltd
Source: Ace equity, StockAxis Research

Financial Highlights:

Particulars (Rs. in Crores) Q1FY23 Q1FY22 YoY Q4FY22 QoQ
Revenue from Operations 197.74 151.45 30.60% 271.83 -27.30%
EBITDA 33.33 24.25 37.40% 31.02 7.40%
EBITDA Margin (%) 16.90% 16.00% 11.40%
Profit After Tax 23.07 17.13 34.70% 21.37 8.00%
Net Profit Margin (%) 11.70% 11.30% 7.90%
Earnings Per Share 43.62 32.39 34.70% 40.42 7.90%

Source: Company Filings; StockAxis Research

Highlights for the quarter ended June 2022
The company posted decent set of numbers in Q1FY23, where year-on-year revenue was higher by 30.6% to ~Rs. 198 crores, however, quarter-on-quarter basis, the topline was lower by 27.3%. This historic trend suggests that the Q1 had always been lower than Q4; Q2 and Q4 had always been strong (refer the 10Y quarterly trend below).

Hawkins Cookers

The cost of material seems to have cooled off compared to Q4FY22, which aided the gross margins to jump by 718 bps to 52.1%, however, the cost remained elevated on Y-o-Y basis which weighed on the gross margins by 608bps YoY. EBITDA was higher by 37.4% YoY and 7.4% QoQ due to higher operating leverage and lower other cost, respectively. The bottom line was higher by 34.7% Y-o-Yr and 8% Q-o-Q to ~Rs. 23 crores.

Outlook & valuation

With a strong brand recognition and vast management experience, Hawkins is one of the leaders in the growing industry. It has managed to mitigate the geographic risk and ensured a wider reach by its strong, pan-India distribution network. The company's strong financial risk profile is reflected in its superior RoCE and strong cash generation ability, which has resulted in net debt free status.

Further, despite competitive intensity on the rise, Hawkins has managed to deliver top-line growth. In FY22, the company reported healthy revenue growth of 25% due to increased sales volume, which was driven by strong brand recall and higher realisations.

With an expanding presence on e-commerce platforms and a pan-India distribution network, we believe the company is well positioned to deliver long-term growth. Furthermore, we continue to believe that the company will benefit greatly from an increase in consumer confidence in the consumer staples market, as well as a shift in market share from unorganised to organised players.

At CMP of 5,613, the stock trades at 17.2x of FY25E earnings.

Quarterly Financials

Particulars (Rs. in Crores) Q1FY23 Q1FY22 YoY Q4FY22 QoQ
Revenue from Operations 197.74 151.45 30.60% 271.83 -27.30%
COGS 94.74 63.36 149.76
Gross Profit 103.00 88.09 16.90% 122.07 -15.60%
Gross Profit Margin (%) 52.10% 58.20% 44.90%
Employee Benefit Expenses 27.17 25.05 24.85
Other Expenses 42.50 38.79 66.20
EBITDA 33.33 24.25 37.40% 31.02 7.40%
EBITDA Margin (%) 16.90% 16.00% 11.40%
Depreciation & Amortisation 1.86 1.53 1.74
EBIT 31.47 22.72 38.50% 29.28 7.50%
EBIT Margin (%) 15.90% 15.00% 10.80%
Finance Cost 1.31 1.77 1.43
Other Income 0.75 2.07 1.03
Profit Before Tax 30.91 23.03 34.20% 28.90 7.00%
Tax Expenses 7.85 5.90 7.53
Effective Tax Rate (%) 25.40% 25.60% 26.10%
Profit After Tax 23.07 17.13 34.70% 21.37 8.00%
Net Profit Margin (%) 11.70% 11.30% 7.90%
Earnings Per Share 43.62 32.39 34.70% 40.42 7.90%

Source: Company Filings; StockAxis Research

Consolidated Financial statements

Profit & Loss statement

Year End March (Rs. in Crores) 2021 2022 2023E 2024E 2025E
Net Sales 768.46 958.01 1146.05 1335.94 1527.71
Expenditure
Material Cost 365.20 488.82 584.77 681.66 779.51
Employee Cost 100.95 106.19 114.60 126.91 145.13
Other Expenses 372.11 383.85 430.95 480.01 -924.64
EBITDA 110.81 119.76 167.19 205.62 239.12
EBITDA Margin 14.42% 12.50% 14.59% 15.39% 15.65%
Depreciation & Amortization 5.33 6.66 8.31 9.75 11.19
EBIT 105.48 113.10 158.88 195.87 237.09
EBIT Margin % 13.73% 11.81% 13.86% 14.66% 15.52%
Other Income 7.32 5.86 6.88 8.02 9.17
Interest & Finance Charges 4.73 6.06 6.12 5.37 4.44
Profit Before Tax - Before Exceptional 108.06 112.91 159.63 198.51 232.65
Profit Before Tax 108.06 112.91 159.63 198.51 232.65
Tax Expense 27.43 29.02 41.03 51.02 59.80
Effective Tax rate 25.38% 25.70% 25.70% 25.70% 25.70%
Net Profit 80.64 83.89 118.60 147.49 172.85
Net Profit Margin 10.49% 8.76% 10.35% 11.04% 11.31%

Balance Sheet

As of March (Rs. in Crores) 2021 2022 2023E 2024E 2025E
Share Capital 5.29 5.29 5.29 5.29 5.29
Total Reserves 172.34 207.89 267.19 340.94 410.08
Shareholders' Funds 177.62 213.18 272.48 346.22 415.37
Non Current Liabilities
Long Term Burrowing 23.06 34.37 33.13 28.13 20.63
Current Liabilities
Short Term Borrowings 4.80 5.27 5.27 5.27 5.27
Trade Payables 76.55 72.12 80.70 95.20 109.84
Total Equity & Liabilities 391.19 409.39 472.28 555.52 631.80
Assets
Net Block 39.01 51.79 58.49 63.73 67.54
Current Assets
Inventories 97.18 178.10 152.76 204.00 215.75
Sundry Debtors 40.00 52.83 57.65 66.30 70.61
Cash and Bank 167.08 65.14 141.86 159.96 216.37
Total Assets 391.19 409.39 472.28 555.52 631.80

Cash Flow Statement

Year End March (Rs. in Crores) 2021 2022 2023E 2024E 2025E
Profit After Tax 80.64 83.89 118.60 147.49 172.85
Depreciation 5.33 6.66 8.31 9.75 11.19
Changes in Working Capital 103.57 -141.93 29.11 -45.40 -1.43
Cash From Operating Activities 188.94 -52.15 156.02 111.84 182.62
Purchase of Fixed Assets -14.07 -20.11 -15.00 -15.00 -15.00
Free Cash Flows 174.87 -72.26 141.02 96.84 167.62
Cash Flow from Investing Activities -119.39 81.98 -15.00 -15.00 -15.00
Increase / (Decrease) in Loan Funds 7.90 2.60 -5.00 -5.00 -7.50
Equity Dividend Paid -42.42 -47.78 -59.30 -73.74 -103.71
Cash from Financing Activities -40.16 -51.28 -64.30 -78.74 -111.21
Net Cash Inflow / Outflow 29.39 -21.45 76.72 18.10 56.41
Opening Cash & Cash Equivalents -8.06 21.34 -0.12 76.60 94.70
Closing Cash & Cash Equivalent 21.34 -0.12 76.60 94.70 151.11

Key Ratios

Year End March 2021 2022 2023E 2024E 2025E
EPS 152.49 158.64 224.30 278.92 326.89
Cash EPS 162.58 171.23 240.01 297.36 348.06
DPS 80.00 150.00 112.15 139.46 196.13
Book value (Rs/share) 335.91 403.15 515.30 654.76 785.52
ROCE (%) Post Tax 45.10% 38.57% 43.69% 43.87% 42.92%
ROE (%) 45.40% 39.35% 43.53% 42.60% 41.61%
PE 35.05 31.95 25.02 20.12 17.17
P/BV 15.91 12.57 10.89 8.57 7.15
EV/EBITDA 24.34 22.20 17.52 14.14 11.62
P/Sales 3.68 2.80 2.59 2.22 1.94
Net Debt/ EBITDA -1.17 -0.18 -0.23 -0.30 -0.80
Sales/Net FA (x) 21.55 21.10 20.78 21.86 23.28