Hawkins Cookers Ltd. share price target

The cooker & cookware industry saw a robust uptick in demand led by accentuated preference for home cooked food owing to the pandemic. Revenue trajectory for Hawkins also accelerated with the company nearly covering up its lost sales of Q1FY21 (30% YoY de-growth) by 9MFY21. Revenue for 9MFY21 is now marginally down 0.5% YoY to | 525.1 crore. We believe higher discounting during initial quarters and change in channel mix may have led to gross margin contraction of 395 bps YoY to 52.0%. However, tight leash on operating expenses (down 6% YoY) resulted in...

Revenue trajectory decelerated in Q4FY20 owing to nationwide lockdown from mid-March onwards. For 9MFY20 (April-December), Hawkins continued to outperform peers with revenue growth of 13% YoY. New product launches and higher marketing spending aided topline growth. However, due to significant fall in revenues in Q4FY20, Hawkins exited FY20 with topline growth of mere 3.2% YoY to | 673.9 crore. Despite subdued topline growth, it saw significant improvement in margin profile with EBITDA margins expanding 220 bps YoY to 15.4% in FY20 (one of the highest...

With the company reporting moderate revenue growth in FY13-18 (6% CAGR), FY19 was a turnaround year for Hawkins cooker. The company reported one of its highest topline growth of 18% YoY to | 652.8 crore in FY19. New product launches (five new products launched), coupled with higher marketing spends (up 31% YoY to | 34.7 crore) aided topline growth. Over the years, the pressure cooker industry has grown at a slower trajectory (low single digits), on account of 90% penetration of LPG connections in the urban market. However, government initiatives like...

Pressure cooker industry revival to spur revenues Hawkins reported a robust set of Q1FY19 numbers with revenues growing 50% YoY to | 120.8 crore. Higher raw material expense led to a decline in gross margin by 110 bps YoY to 59.8%. However, with positive operating leverage kicking in, EBITDA margins expanded significantly by 580 bps YoY to 13.9%. Absolute EBITDA grew ~2.6x to | 16.8 crore. Lower other income (down 40% YoY to | 1.3 crore), restricted PAT growth, to a certain extent. Hence, PAT for the quarter came in at | 10.7...