Prasad portfolio


#101

I think Hawkins is a family run business ( no matter what anyone says).

The goal of Mr Vasudev is to ensure the long run sustainability of the brand, continue to be the channel master ( not sharing or giving channel power to distributors) . IN the process certain principles have been set as benchmarks of the company which are expected to be followed in Mr Vasudevs absence - no bribe/corruption , never look at short term gains because they often come at cost of long run benefits.

We should attend AGM keeping this in mind , that although Mr Vasudev may be vacating his posts , the new CEO is well tuned to his philosophy. And to ensure same guiding policy sustains, the new son-in-law director and son are being groomed for same.

So i feel no matter how much ‘noise’ we create at the AGM, the ‘approach’ will not change.

We aretodaysshareholders, may be gone tomorrow. Hawkins is His company and Will remain with his family for generations to come.

What we or at least I am hopeful with Hawkins shares is that in spite of ‘passive’ approach-vis-a vis- TTK, the consumer boom ( and the switch from unbranded to branded goods for Indian consumer) will work in favor of Hawkins ( and not because of some intelligent strategy/management of Mr Vasudev and his team)

thanks- holding good % in this company

superiorreturns


(rajeev shah) #102

Petronet-LNG.doc (30 KB)


(rajeev shah) #103

The article says all about Management Credibility http://www.dnaindia.com/india/1818658/report-dna-exclusive-how-petronet-helps-qatar-bleed-india


(PRASAD V. K.) #104

Link: http://www.dnaindia.com/india/1818658/report-dna-exclusive-how-petronet-helps-qatar-bleed-india

Thanks rajeev This definately is a negative news for petronet holders.I just saw a lot of LNG ships being chartered by Petronet for very long term and got curious.This means even the volume goes up benefits will not reach petronet shareholders.


(PRASAD V. K.) #105

poor results from hawkins highlight my earlier views about inactiveness and lack of imagination of management.Company and shareholders are paying price for rigidity of promoter. I hope he explains decline in both top and bottom line to shareholders.

lack of debt,high ROE and ROCE and divine cash flows may provide some cushion to this stock on downward journey.But short term wise money which entered at 2000 levels expecting better results this year will definately quit this counter.

I am trying to convince myself —

Always sell confidence and buy fear


(Hitesh Patel) #106

I can say from personal experience that

ITS EASIER SAID THAN DONE.


(Hardtoget) #107

Hi Prasad,

like to expand upon your start on ZARA,

read this article a week or so back, which mentions clearly why ZARA has got it right

http://www.firstpost.com/business/how-zara-nailed-fashion-retail-in-india-924085.html

the 2nd article gives details on the business model

http://articles.economictimes.indiatimes.com/2013-02-05/news/36764732_1_amancio-ortega-gaona-spanish-brand-indian-unit

rgds


(PRASAD V. K.) #108

Generally in FMCG sector brands are valued at three times the yearly sales.

Let us consider that hawkins clocks sales of 75,75,75,75 crs for all qrtrs., which gives

a sales of 350 crs. Based on this as on today if company is sold it would fetch a value of 1050 crs.That is exact the present marketcap of the company right now (at price of 2000).

Hence it is not the optimism of new launches but security of fetching a base price is helping this script to stay around 2000 levels.Investors must understand this.

It is unfair to expect the new launches to contribute significantly immediately in next one year as they are launched in already crowded space. For me this script looks like staying at this level for quite some time now with little possibility of positive surprise.

Anyway hawkins investors is a totally different category of investors and unlikely to be affected buy fear of confidence and have learnt to live with pain.


(PRASAD V. K.) #109

just one small correction 75,75,75,75 makes it 300 not 350.

But I have assumed a bit of improvement in next few qrts hence assumed a yearly sales figure of 350 crs.


(Kuntal Sharma) #110

Pasad,

Zara is a highly successful brand in the UAE too having bought the high street fashion to reasonable levels; but not low enough to reduce its premium brand value. No doubt it can do in India what it has done the world over.

trent…

views invited.


(PRASAD V. K.) #111

A thought process-

can zara act as a game changer for trent…

Zara seems to be real hit with Indian girls

views invited.

Kunal --will it add value to trent? Zara has got 51:49 jv with trent Considering the fact that initially they will target urban upper middle class what sort of turnover they can maximum achieve? how much will translet in bottomline and how much it will add to trent eps? Will they eventually buy out trent in jv or sell to trent? What can be pricing for both the deals? Will trent learn something from zara and implement it in westside?How effective will it?
I am trying to find answers to all these questions I request members associated with garment retail in to throw some light on this.


(PRASAD V. K.) #112

Added some hawkins in last few days.Present price offers satisfactory level of comfort while buying.Negative views of informed investors is an additional buying trigger.


(Shankarnarayan K) #113

Hi Prasad,

Are you drawing a parallel with generic stock price behavior which tends to be opposite to what majority think ?

BR,

Shankar.

Negative


(PRASAD V. K.) #114

Hi shankarnarayan k

I am not challenging wisdom of majority in buying hawkins now. I am just trusting my earlier belief. Negative opinion from majority has helped me to buy hawkins at lower prices.

Though----

In market crash like this we need to be focused and it helps to slowly deploy cash in good sound trusted companies which you already own rather than initiate a complete new position. Then we end up going all over but to desired location.

Gruh has not cracked much so slowly buying hawkins.


(PRASAD V. K.) #115

During this market crash added little to hawkins position.

Did not take any exposure in HDFC twins inspite of good valuations. HDFC ltd suffers from

lending to builders and HDFC bank is likely to face stiff competition from new banking players like birla,tata,reliance,sunderam.idfc etc.Hence do not feel like entering in saturated market with increasing number of players.

Gruh is still better play as it is already competing with these NBFC and growing profitably.

Conversion of these NBFC to banks is likely to make life easier to gruh.


#116

Dear Prasadji:

I too am holding Hawkins since quite some time now.It is close to cost price.

Sometimes, i am tempted to liquify my entire lot of Hawkins into cash.

Using cash to buy into currently some good stocks at attractive prices like gruh, Indusind, Titan , Kaveri and maybe Unichem.

Because having good holding in Hawkins MAY or MAY NOT yield desired result.

At least with the other stocks we are assured of some returns.

It is a sort of dilemma.

Are you in the same boat?

Thanks


(PRASAD V. K.) #117

Dear Ritulji,

Problems with hawkins are well known, well debated and can be solved internally by proactive management.Hence there is scope for improvement.This is what we call classic

straight turnaround.I still feel that management is not totally hopeless and one day personal

egos will stand clear of overall well being of company and shareholders.It is just like trying

convince something new to one’s old dad…

Ragarding gruh I hold this stock.So far only positive news have been heard about this stock. But a 20 to 30% cut in realty prices and it will be very interesting to see how gruh reacts…

Indusind, titan are more risky and facing external troubles beyond the control of management.

Kaveri is again a well discovered stock hence nothing new about it.If one is comfortable with valuations and willing to take monsoon on one can have it.

unichem do not know.I never owned unichem.

But overall I feel one should start slowly buying in good stocks. Atleast I am accumulating hawkins.


(bala) #118

ho prasad,

regarding rupee depreciation how it will impact their aluminium purchases ? if i remember hindalco formula is based on USD, so if thats the case wouldnt it effect the cost of raw materials ? i am not even discussing the fluctuations of aluminium on LME.

also the overall slowdown in conumption may dampen their sales even if they set right their house in order


(PRASAD V. K.) #119

Hi Bala,

Purchase cost of raw materials will increase and I think hawkins will be able to pass it on to end consumer.This is what we call brand strength.On the other hand weaker products will not be able to sell at higher costs.When buyers have to shell out meaningful amount of money to buy a cooker they will naturally buy a quality product.

My only worry is inability of management to launch new products and position itself as a complete kitchen appliances provider.

propaganda of inclusive growth of UPA also suits companies in this category very well.

Good monsoon this year will ensure a strong rural demand.

Proposed induction foray will ensure urban demand.

Hence overall things look ok for hawkins. Chances of loosing 30% of capital overnight are less in hawkins compared to all other existing opportunities.


#120

Prasadji:

I admire that you have the courage to have a 2-3 stock portfolio.

As much as i am invested/favoured towards 1-2 stocks, i tend to add others (which may not be as attractive) to spread risk.,

From what i can recollect, hawkins has entered into some long term contract with Hindalco (unconfirmed information) . However terms of same whether at fixed or fluctuating prices is unknown. But this, if true could provide some respite for hawkins in aluminium purchases from Hindalco.