I believe it holds true for futura and contura but not miss mary. Also the upgradation from Miss Mary to futura high end can be postponed, if consumer spending takes a hit.
As and when consumer sentiment turns bullish, replacements happen with upgradation and additional cooker comes in to kitchen if necessary. Till then there can be postponement.
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I also wish my beliefs go wrong and hawkins post an outstanding sales numbers.
I hit.
**I think the margins may be higher for futura and contura brands whereas miss mary may have lower margins. So they may end up producing more of higher margins products if demand is not an issue in that segment. How is the product mix? Do they have flexibility of changing production of different brands? **
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Futura mainly caters to export side, which saw a whopping 57% growth in FY13. Production of Miss Mary ( the low margin economy brand) is mostly outsourced.
As long as the production growth is there, the higher sales and margin lift can be expected mostly from Hawkins and Futura brands.
The base has been almost static for last 3 years for Hawkins, while TTK has posted continued increase in the same period. So a YoY drop from TTK might not reflect on Hawkins side, as their bases are vastly different.
Buyers of Hawkins are not much affected by the weak economy as they normally are from the higher income groups. Their decision not to buy Hawkins coocker do not depend on economy but on the availability. I think the demand issue may not be that severe for Hawkins.
I
** hit.As **
** postponement.
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numbers.
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Hi Rudra,
Gr8 work.
I have few doubts.
1). Shouldnât Increase in receivables been seen as a % of sales rather than onabsolute basis as with increase in sales, absolute value of receivables is boundto increase? Receivables as % of sales was 8.7% in FY12 and is 9.8% in FY13 so the increase doesnât look moreintimidatingas compared to 32% on absolute basis.
2). Juanpur+ Thane is around 9000 units per day and Hoshiarpur is 5200.So the blended volume growth comes to be (0.6*34 + .4 * 24 = 30%). What are yourassumptions in taking the volume growth to be 20%?
3). You are assuming 95 cr sales for Q1 FY14. As per the AGM speech, the sales wouldhave been 100 cr in Q1 FY13 itself had it not been for Hoshiarpur issue. Soconsidering that the supply issues have gone shouldnât the sales be greater than 100 cr. (Youare actually assuming no growth if you take the sales figure had supply side issuenot being there. )
4). Are you attending the AGM on 30th?
Regards
Rohit
** brandsa Hawkins, Marya ** thefuture
Hey Rohit,
regarding your queries,
1). what I am more concerned is not the absolute increase in receivables, but the lack of proportionate increase in payables side. Absolute numbers do not matter much. As seen in cases like Atul Auto, Whirlpool we see increase rise in payable side and drop in receivables which points towards a brand pull. Given the Hawkins brands moat I would have expected on similar lines, but the signals point towards higher bargaining power of suppliers (Hindalco) which is a bit worrying.
2). please share the sources of latest capacity and utilization if you have. the last numbers we had were in 2011 AR. If you see on the mix side, the full capacity production and sales as doled out in AGM speech 2012 was more academic, rm procurement and other bottlenecks do restrict production at times.
Also if you see, I have assumed pressure cooker sales growth of 25% which with a 80%weightageto overall sales, will reflect in 20-21% growth as marked. Also since the issues started getting resolved post Oct, a part of recovery and reported growths were already in FY13 thus creating a higher base for Q4FY13 and part Q3FY13. So to extrapolate the Jan - May 2013 growth for FY14 may not be prudent.
3). I do agree with your view here, that the projections do have upside risk, however given the current demand scenario I will be be happy if the projected sales are met. We are playing on operating leverage here on production resumption. I would be more than happy to face upside risks here.
4). I would have loved to but social commitments 
will prevent me from doing so this time. May be next year. If you are attending the AGM, kindly ask a few questions regarding the capacity/utilization and segments (refer my last post here)
Regards,
Rudra
1). onabsolute boundto moreintimidatingas
2). 5200.So yourassumptions
3). wouldhave Soconsidering (Youare issuenot
Hawkins stock price today is around 2030-2040⌠Stock price seems interestingly poisedâŚ
There was a rising gap between 1999â2041.35 back in nov 12 and stock price currently is right in the gap zoneâŚ
Lets see how this zone of support holds for the hawkins stock price.
I donât know about technical. But from fundamentals I think it can even test 1500. I see a lot of people saying 2000 is the support due to 50 rs yield. But at that price , yield is only 2.5
(note, have a decent allocation and still holding it. this one is really testing the patience. hawkins is the most recent lesson i learned in the market. 
ie never buy on borrowed conviction)
**Disclaimers â
New to fundamental investing and learning the intricacies without any finance background. Hawkins AR-FY 2013 is the 1st AR read by me. Thanks to value picker forum/members to give me the )avoid borrowed conviction) syndrome.
No shareholding in the Hawkins business. Monitoring actively after going through valuepickers thought process, Hawkins website/Chairmanâs letters/AR.
Veterans help and patience is need for below novice questions (from AR-FY2013) â
Cash Flow statement â Page 14: Finance Costs under Cash Flow from operating activities: 300 Lakhs. What is that? Are they paying 3 crores for Long term borrowings of 11 crores?
Note 14 â Page 18: Finished Goods â Pressure Cooker â 1032.90 lakhs. Too high as compared to 73.24 Lakhs of FY 2012. Does it mean â Lot of demand is anticipated OR company is facing issues on the sales front OR any other angle?
Note 15 â Page 19: Trade Receivables â Considered Good â 167.89 Lakhs. Too high as compared to 23.95 lakhs of FY 2012. Does it mean that company is facing lot of competition and dealers are controlling the game Or anything else? Is it too small & can be ignored?
Note 23 â Page 22 : Dealer Conference Expenses â 801.62 lakhs. Too high as compared to 165.62 lakhs in FY-2012. Does it mean company is lubricating the sales channel to guide the company on the much anticipated profitable growth?
Please guide me incase this is not the right way)place to ask all these questions.
Are these questions worth pondering or I am totally out of focus while reading the AR? Your feedback would help me to tune my thought process.
Thanks and Regards,
)âSurender
Interesting observations on Hawkins Weekly Chart,
Manish,
That is a wonderful chart which explains all. Personally I feel it should test 1800. Technical analysis is an art and not a science so variances are possible. Would like to see you post more charts like this.
Tony
Stocks full at D-MART, Production Dates mostly of May, June, July.
sir what do u mean to say by stocks is full , is good sign or bad sign?
@ Manish - Scuttlebutt at its innovative best
good job manish. how do we interpret it?
a) they donât the the supply issue anymore
b) not much demand for the cooker( supposedly they never had any demand issue but only supply constraint)
@ Zulfi : Stocks full, means +ve signs, and not only that, the stock is latest and was acquiringhighest shelf space, than any other brand, be it TTK, Bajaj etc.
@ Mallikarjun : Thanx,
@ Gautham : A) No supply issues at all, B) Any body attending the AGM can ask the management about some type of sales agreements being reached with these super stores, like supplying on credit against collateral/ Bank guarantee.
Over all looks like the management has woken up after a long HYPER SLEEP and getting aggressive at last.
Looking forward for tomorrows results.
In one of the magazines sometime back I had read about d mart and Radha krishnan drama I. It mentioned that d Mart was able to quote lower prices as it used to pay its supplier with four days of receiving goods and could get better prices from suppliers.
thanks for the excellent feedback manish madnaniâŚ
dmart supply opens up a huge market for hawkins products
what we need to do is to find out if other citiesâ dmart stores also carry hawkins productsâŚ
Will look into dmart stores in baroda and provide feedback.
Thank you Manishji. I had visited Big Bazaar last week. They have again some problem with credit agreements and Hawkins is not sending any stock to Big Bazaar as of now⌠(Had seen good stock in Jan-Feb but almost nil in June-July)⌠But the stock in D-Mart is 2-3 times more what I had seen in Big Bazaar in Feb.
Induction cooker is available in retail stores.
Will check some D-Mart stores in Pune next week and will also try to get some info on credit agreements in the AGM tomorrow.
A Big thanks once again.
Spoke to some one in Hawkins factory in Hoshiarpur . Seems the co is readying to launch aluminium base induction cooker after completing lot of R & D. But unless Hawkins top management is convinced of quality they will not launch the product.
Also my local retailer who trades in most brands of cookers n other utensils was saying that sales of Prestige n other induction based cooker is tanking due to several quality issue. He was very positive on Hawkins brand n quality n said its way ahead of competition.
IMHO Indian pressure cooker market n now even exports is a long term growth story with increasing urbanisation,nuclear family, Indian habit of having only fresh foods 3 times a day, paucity of time for all including working couple,increasing aspiration level specially in rural India . This coupled with rare highly ethical promoter , recent resolving of problems, n super ROCE makes Hawkins a lovely compounding machine irrespective of short term fluctuations.
aaj wahi feeling hai, jab mere dasvi ka result aane wala tha(us time papers mein like the, is bar paper kisi aur ne likha hai :))
