@ Rohit: I didnot see a single cooker from the April batch, all i saw was the latest produce in Dmart and Hypercity, So i wont buy that argument, We have to believe what we see. Even i was very positive on this after the scuttlebutt, But after the results i have given up.
With Manish regarding depreciation of rupee. China has remained competitive by devaluing its yuan…
If our government purposefully lets rupee to fall then 65-70 levels are not far…
Manishji, can you pls get some details from the purchase manager as to when was the stock purchased ? The mfg date might be of May, but if the stock is picked in July, the sales should reflect into Q2. I was disappointed after reading the results, but after attending the AGM, I was pretty positive. I am giving it a full year FY14 to show its pedigree
Thanks Rohit for sharing the perspective you got from the management. Was the management defensive or where they quietly confident? Anything you could judge about the new upcoming leadership, do they seem a bit more agressive? Induction cooktops sounds very interesting, because it is a completely different segment, and opens up a huge opportunity for Hawkins, how confident did they seem that they will actually start selling these by Diwali? Are there any other specific products they mentioned? Thanks!
So basically they are saying that they had a growth of 3% in volume in first half of calendar year (So you can expect 10% in terms of Sales, 103*1.07=1.1) . With more product launches in coming months, they hope to growth much better…probably they will start delivering new models/products just before the next festive season.
Link: https://docs.google.com/file/d/0B37JOofl114eaWtLanZzSy0tRDg/edit?usp=sharing
Thats exactly how i interpret it.
Pls read the AGM speech from this link.
This **à¬ààààà¹àààààà **seems to have misfired
for many of the value investors.
Thanks a lot rohit for that attachments. My views
1 It is surprising that the management doesn’t talk about the overall consumption slowdown at all. Even the FMCG companies with a very small ticket item have admitted that there is a slowdown. Are they so confident that their products will such a huge demand even in the current scenario ?
2). I am not sure if we can attribute the sales decline to dealer stocking in advance to due to the anticipated price hike. Even the theory of lag due to old supply issue is hard to buy. Because that was solved in the last q itself. The so called pricing power is also under question.
3). One should not get carried away with the new product launches. Because there is no guarantee of demand for them. The cooker ( where they are very strong) itself is not sold. I think induction cook top is one of the products they are launching. this is a highly overcrowded market with so many branded and unbranded players. i head there is a huge oversupply.
I think this will go on. Next quarter we will find some other reason for the decline.(Note; I am also invested. Not under loss. But planning to get out over the next few weeks)
** If the dealers stocked up more than usual in March, shouldn’t the sales March instead of June? March sales were only 20% higher. or am I missing something.
**
Looks like the 1800 bottom has held on for now… Stock up by around 6% as of now… I think people might be more optimistic with the probability of new launches providing the much needed sales growth.
I was reading some articles and its important point is during high inflationary environment and expectations consumption stocks tend to do well. Similar things has happened in US market during late 70’s and 80’ s. While looking into screener data it is clearly visible that all consumption led stories Page,Hawkins, Asian Paints, Nestle etc showing sign of slow down and don’t able to support multiples upward of 25 for long time. Hint: Even after poor result by most of them still in place of falling their share prices are holding. This is typical sign of close to bubble situation in the market.
Hi Niraj Kumarji,
I totally agree with you. “All analysts chasing brand plays, fmcg and pharma despite theses sectors witnessing tremendous over last 16 months” is another sign of a bubble. Going ahead, with such high inflation, my guess is we will see stagnancy in the demographic upgradation (very crudely put - no. of people moving from a certain income class to the next higher one). This could lead to further slowdown in discretionary spending and down trading in FMCGs.
Regards
Meet Makadia
Meet thanks for your response. My limited understanding of market (i am new member of valuepickr) says that though share market is a very intelligent futuristic system but it dont possess any long term memory capabilities. So in that sense it is not efficient and just try to do projections based on last 3-4 years history. Coincidentally there is also limitations of humane memory and recency effects at play in the market. Wealth of most people in india becomes poorer by 20 % in last 2 years due to currency devaluation and its effect on consumption and real economy is about to be felt. Only silver lining is IT and pharma sector at this point according to my view.
Can a company grow without adding additional capacity for more than 15 years ???
The Answer is YES !!!
http://expressindia.indianexpress.com/fe/daily/19971107/31155623.html
Found this interesting piece dating 1997…
The current capacity of Hawkins is 72 lakhs. It was the same in 1997. Hawkins hasn’t added any capacity for more than 15 years!!! Just Brilliant. It shows how less capital it requires to grow.
Report is also uploaded on Hawkins site http://www.hawkinscookers.com/download/AGM-Speech-2013.pdf Link: http://www.hawkinscookers.com/download/AGM-Speech-2013.pdf
Thats exactly how i interpret it.
Bought Prestige 4ltr cooker today for 1008/- from the famous Sarvana stores, Chennai.
There were many options available apart from Prestige- Butterfly, Preethi, & many local names whose names I can’t recall.
Hawkins was not even available.
Now I am a proud owner of 2 cookers- 1 Hawkins & 1 Prestige 
Chennai and TamilNadu is the bastion of TTK . The ‘maamis’ of Chennai are never going to let any other brands into their kitchens 
.
TTK Prestige has really stepped up the ad by pulling in Abhishek Bachan and Aishwarya
Jo biwi se kare pyar wo prestige se kaise kare inkar
As per the FY13 figures sales were around 1350 crores and net profit around 133 crores. With 100 crore a year as ad expenses per year, where is the bottomline headed? I somehow feel they are too aggressive and will blow the company this way.
ttk announced their q2 results. both top line and bottom line are flat y-o-y
The Company has posted a net profit of Rs. 303.00 million for the quarter ended September 30, 2013 as compared to Rs. 302.80 million for the quarter ended September 30, 2012. Total Income has increased from Rs. 3361.60 million for the quarter ended September 30, 2012 to Rs. 3481.70 million for the quarter ended September 30, 2013.