the above questions are not really aimed for rudra only. Anyone can participate / contribute .
Thanks
Rudra has done his level best (in his blog as well as here) to make everybody understand about hawkins story which has is in three parts
1)First part would be regarding resolving pollution and labour issues.
(This has reflected in price rise from 1500 to 2400).
2)Second part could be relative undervaluation with TTK on fy 13-14 basis.
(This could take stock to 3000 to 3200 level)
3)Strong secular growth led by fitura utensile brand and capacity expansion in cooker division. Economics of scale combined with huge demand will expand NPM in this phase significantly and stock has potential to reach a EPS about 250 to 300 leading to a valuation of about 7000 to 9000.
Having said this story may not roll out in a fairy tell manner as above but those who doubt it have already missed first leg of rise (from 1500 to 2400)
Here is a review of their futura cooker
One crucial piece of scuttlebutt, I did in Gurgaon before coming, was this.
There was huge display of Futura Cookware in Spencer and none at all at a BIg Bazaar store (Prestige took lionās share of all displays in cookware section).
The guy there told me, Big Bazaar doesnot sell Future cookware (most likely the same margin related issues, discussed in TED earlier). Hence, despite the high pile up of pressure cookers, futura range was conspicuously missing from all big bazaar stores.
If any other boarders can confirm this (Big Bazaar in other cities) and similar issues in other hypermarkets.
Another interesting and slightly forgotten stock from this sector is butterfly. Reliance PE has invested almost 100 cr in this and company is quitely ramping up capacity,diversifying in new products and new territories.Because of similar product range and geographical presence this is more a threat to TTK than Hawkins.
Even though the stock is neglected now a days and trades very thinly a lot of good work is happening on business developement,transparency, and governance front. Presence of reliance is also a huge positive. But as I said stock is out of favour as on now. But direct cash transfer to acounts, 2014 elections and divesrfication in other states can be a game changer for this company.
Sorry Rudra for late reply. I think it was discussed on TED, or during some conversation. Canāt find any documents for this. But am pretty sure on this.
Hi,
The installed base figure in AR pertains to only a part of the pressure cooker, and not the whole pressure cooker. This was quite misleading to me also. They need to invest some amount (not that great) to grow production.
Regards
Hello Prasad,
Butterfly seem to be story worth tracking. It has recently received TN govt order of 460 crore. Though it is not yet there compared to TTK, Hawkins with respect to margins and other indicators but good things are their plan to expand in North India, Reliance PE interest and huge opportunity. There was a CRISIL IER report about the company dated 15-Nov which I could lay my hands on. CRISIL has given a 3/5 fundamental grade (Good Fundamentals) and 5/5 valuation grade (Strong upside) to stock with fair value of 412 which is 30% upside from CMP.
Thinking of switching from TTK to this one once TTK is valued beyond fair.
Could you start a new thread where we can track it?
regards,
Roopesh
Hi roopesh,
Gandhimathi has a wider product basket than hawkins and is trading at reasonable valuations.Very high optimism has biult in hawkins and any below par performance by the company will not be taken lightly by so far patient investors.
Butterfly is a very strong brand in south and initially will bank on south indians staying in northen region for expansion and slowly attract other consumers as well.Their mixers are of good quality with medium pricing.Tie up with HPCL,BG etc will make sure their gas burners will sell.So overall this is a ok sort of bet.But overhang of sharp price run up with a fear of manupulation remains in this counter and it will be a while (about two years) and the people will take this company seriously.Till then very few people will be willing to discuss this counter hence I have not started a separate thread
Hi roopesh,
Gandhimathi has a wider product basket than hawkins and is trading at reasonable valuations.Very high optimism has biult in hawkins and any below par performance by the company will not be taken lightly by so far patient investors.
Butterfly is a very strong brand in south and initially will bank on south indians staying in northen region for expansion and slowly attract other consumers as well.Their mixers are of good quality with medium pricing.Tie up with HPCL,BG etc will make sure their gas burners will sell.So overall this is a ok sort of bet.But overhang of sharp price run up with a fear of manupulation remains in this counter and it will be a while (about two years) and the people will take this company seriously.Till then very few people will be willing to discuss this counter hence I have not started a separate thread
I did not find a separate topic on TTK Prestige. Since title of this thread has TTK mentioned, let me start - Q3/Fy-13 Results outā¦
Total Income up 30.7% to 437.13 Cr from 334.33 Cr.
EBIDTA up 17.7% to 62.12 Cr from 52.8 Cr.
Net Profit up 27.6% to 44.1 Cr from 34.57 Cr.
EBIDTA margin is 14.2% v/s 14.8% (SQ-12) and 15.8% (DQ-11)
NET Profit margin is 10.1% v/s 9% (SQ-12) and 10.3% (DQ-11)
Total Raw material costs as a %ge to Income is 57.1% v/s 56.5% (SQ-12) and 56.4% (DQ-11)
Employee costs to Income is 5.3% v/s 6.3% (SQ-12) and 6.1% (DQ-11)
Other expenses to Income is 23.4% v/s 22.5% (SQ-12) and 21.8% (DQ-11)
Financial costs to EBIT is 5.2% v/s 7.6% (SQ-12) and 5% (DQ-11)
Tax Rate 23.6% v/s 32.6% (SQ-12) and 30.3% (DQ-11)
Almost 41% increase in Other Expenses Y-o-Y affected EBIDTA.
But Lower Tax incidence this quarter helped Net profit.
9M/Fy-13 v/s 9M/Fy-12:
Total Income up 23.5% to 1075.21 Cr from 870.95 Cr (Fy/11-12: 1103.43 Cr)
EBIDTA up 13.6% to 159.61 Cr from 140.44 Cr (Fy/11-12: 172.04 Cr)
Net Profit up 12.2% to 105.06 Cr from 93.62 Cr (Fy/11-12: 113.38 Cr)
Reported 9-month EPS 92.73 v/s 82.70 (Fy/11-12: 100.13)
Reported TTM diluted EPS: Rs. 110.17
On 16/01/2013, stock on BSE closed at Rs. 3735/- up 6.31%.
is there any corelation between ttk and hawkins results assuming no issues like labour, env
ttk results are very good, does it eat int hawkins ? or ttk has benifited from hawkins issues during month of october ?
As per sales break up of TTK
cookers sales for Q3 was 158 crores which was up by 37%
cookware sales for Q3 was 76 crores which was up by 3%
Appliances sales for Q3 was 199 crores which was up by 41%.
others 12 crores.
Looking at the trend there was good demand for cookers.
TTK Prestigeās average realisation from cooker is less than Hawkins. TTK prestige had bad sales in the south dominant region because of power and monsoon problem as stated and made up the sales from north india. This actually means that the north indian market demand should be good. If hawkins even though sells less cookers than TTK Prestige, it should somehow make it with the added realisation.
I also read that hawkins and TTK control 50% of sales of cookers in organized market.
The real trigger for hawkins is if they can meet 70% of TTKās cooker sales. cookware sales is 15% of cooker sales for hawkins. If they can increase it to 20 % then we are having 130+ crores for this quarter. If they can maintain 9% margin the EPS comes around to 22-23.
calculations:
70% of 158 cr = 110
20% of hawkins revenue in cookware = 110*1.2 = 132.
9% margin = 132 * 9/100 = 11.9
All these are just calculations and can go wrong because we may get surprised either positively or negatively.
just a small correction:
Kindly read__20% of hawkins revenue in cookware as add 20% to the hawkins revenue in cookware in addition to cookers.
Result on Feb 2 .
Some more info received on TTK and hence tweaking my analysis for hawkins:
cooker sales in value was 158 crores for Q3 in FY2013.
cooker sales in volume was 14.4 lakh cookers including promotional sales of 3.5 lakh.
West market has shown 70% while both East andNorth market has delivered 100% during the quarter. South was disappointing with 20% decline.
So north and east market is veryconduciveand west also looks good. Hawkins has a good hold of North and West and relatively better hold in east when compared to south.
Since the organized market is divided between hawkins and TTK prestige and both constitute 50% of the market, can hawkins surprise investors positively?
Cookware constitutes 15% of hawkins total revenue, just hoping it can do 20% to it. If it can increase further then its a bonus.
If hawkins sells 10 lakh cookers with avg price realisation of 1200(has increased realisation than TTK Prestige) we can expect sales revenue of 120 crores.
if we include the cookware sales too as 20% of total revenue - 120*100/80 = 150 crores.
if they can manage 9% margin, we are expecting an EPS of 25.
Anything above this will be hugely received by market.
The next Microsoft is never isā¦
So next Prestige is never is Hawkins. So just dont think that Hawkins will ever move like Prestige.
I hope you have heard the name of Apple 
Just kidding.
Hawkins and Prestige are two different companies. While Hawkins is primarily a cooker and cookware company, Prestige has a bigger portfolio of products. The comparison mostly is because of cooker and cookware business.
the analysis put by Rudra and Krishnakumar in this thread are fantastic and one doesnāt need more to understand whatās in store in near future.
Saw a good stock of Hawkins in Reliance Mart Pune. I never saw it in my previous visits. Reliance has always been full with Prestige and Surya. Although Hawkins was in a small section, there were 2 girls trying to decide whether to choose Hawkins. I wanted to convince them but then they might have thought I am hitting on them :))
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Looks like we shareholders try to sell more than their sales team 
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any link to the results ?