They were already spending 71 & 79 cr. in last 2 years under advertising & selling expense . If this 100 cr. per year expense is under same head (which most likely it is) then it’s not that big a change. But I think this spending may help them to move a notch up in brand image and may be price their products upwards.
Total Income up 3% to 345.54 Cr from 335.55 Cr.
EBIDTA DOWN 12.8% to 44.39 Cr from 50.9 Cr.
Net Profit FLAT at 30.3 Cr v/s 30.28 Cr.
EBIDTA margin is 12.9% v/s 13.5% (jQ-13) and 15.2% (sQ-12)
NET Profit margin is 8.8% v/s 8.4% (jQ-13) and 9% (sQ-12)
Total Raw material costs as a %ge to Income is 59.2% v/s 58.3% (jQ-13) and 56.5% (sQ-12)
Employee costs to Income is 6.6% v/s 7.2% (jQ-13) and 6.3% (sQ-12)
Other expenses to Income is 21.3% v/s 21% (jQ-13) and 22.1% (sQ-12)
Financial costs to EBIT is 5.4% v/s 7.9% (jQ-13) and 9.1% (sQ-12)
Tax Rate 25.9% v/s 31.5% (jQ-13) and 32.6% (sQ-12)
Raw material and Employee costs affected EBIDTA.
Increase in other income, Reduction in financial costs and lesser tax saved net profits.
Hy-Sep’13 v/s Hy-Sep’12:
Total Income up 2.2% to 651.87 Cr from 638.08 Cr.
EBIDTA DOWN 12.7% to 85.76 Cr from 98.21 Cr.
Net Profit DOWN 8% to 56.09 Cr from 60.96 Cr.
Six-month EPS 48.18 v/s 53.85
Recorded TTM (sum of 4 quartr) diluted EPS: Rs. 112.37
Saw a Hawkins ad in a bengali entertainment channel after many years. Good traction seen in local sales (channel feedback in North Bangalore - both kirana shops as well as multi brand retail), however induction cookwares not yet available in southern region. This quarter we can see a marginal topline growth, but coupled with ad spends and promotions for festive season, bottom line growth may remain muted.
I do not have much hopes for Q2 sales numbers. Last year Q2 numbers were good due to early festive season. Would like to see FY14 sales together more than quarterly numbers. I admit this stock is really testing nerves of investors.
Hawkins products are now available on Homeshop18 and they are offering 10% diwali discount. Dont know what to make out of it butseeing a lot of hawkins products in stores lately, be it neighbourhood stores,mallsor CSD. At the same time, competition is heating up looking at the TV commercials by so many new companies. Lets see how this year pans out but i believe this is a company for the long run.
After following Hawkins for last 2 odd years, what I have learnt is that don’t research it too much. Don’t keep any expectations and don’t try predict its results.
You can ride Hawkins only if you have trust in the management.(And attending the AGM is very very important atleast in case of Hawkins).
Now everyone will start coming up with their own set of projections with EPS ranging from 100-120 and more super bullish estimates.
Time to buy it was when everyone was bearish about it. (Thankfully I had added when price dropped to 1650 recently after seeing the huge inventory in D-Mart being sold in 2 odd months and the inventory being renewed. That was an indicator for me that things are falling in place. But I’m happy I didn’t try to predict the results this time around.)