Tuesday, February 2, 2010

Hawkins Post Stunning Q3 Results: Maintain BUY

Hawkins Cookers Limited came out with its Q3FY10 results on 29th January. The net sales stood at Rs 75.6 crore, up by around 22% (YoY) and net profit of Rs 11.68 crore, up by an whooping 245%. This is a third consecutive quarter where the company have posted a 3 digit earnings growth.

Result Highlights:

  • EBITDA for Q3FY10 stood at Rs 17.84 crore vs Rs 5.58
  • cr , a y-o-y increase of 220% while EBITDA margins
  • stood at 23.60% an increase of over 1400 bps, YoY
  • This was mainly on account of an outstanding operating performance, where the
  • company witnessed a decline in its operating
  • expenses in every vertical be it raw materials ,
  • employee costs, other expenditure & traded goods
  • The company managed to cut down its operating
  • expenses even without any gain on its inventory which

    • Summary:

  • At the current market price of around 744, the stock is
  • trading at a trailing 12 month P/E of around 11, despite its
  • earnings growing at an average of around 125% over the
  • last four quarter. Given its dividend payment track record of
  • around 50% payout ratio and its 9months EPS of around 54,
  • we expect the company to deliver a full year EPS of around
  • 75 and to payout a dividend of around 37.

  • Thus the maintain its average 5 year dividend yield of
  • around 4% I maintain a BUY on the stock with a one
  • year target of around 925 and it should be added on any dips.

  • Happy Investing..
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