Buy Hawkins Cookers; target Rs 1681: Firstcall Research

“Hawkins Cookers Limited is a company in India which manufactures domestic pressure cookers and cookware. The company has three manufacturing plants at Wagle estate Thane, Hoshiarpur and Jaunpur. It manufactures under different brand names of Hawkins, Futura, Contura and Ventura. The company is the largest cookware manufacturer in India and exports its products to more than 60 countries. The company continued its efforts on product development with more emphasis on research and development activity. The Top line of the company is expected to grow at a CAGR of 14% over 2010 to 2013E respectively. During the quarter, the company has reported Net Profit increased to Rs.93.27million from Rs.80.39 million in previous year same quarter.”

“Hawkins Cookers Ltd disclosed results for the quarter ended Sep 2011. Net sales for the quarter increased by 15% to Rs.985.40 million as compared to Rs.854.34 million during the corresponding quarter last year. During the quarter, the company has reported Net Profit increased to Rs.93.27million from Rs.80.39 million in previous year same quarter. The Basic EPS of the company stood at Rs.17.64 for the quarter ended Sep 2011.”

“At the current market price of Rs.1488.00, the stock is trading at 22.25 x FY12E and 20.65 x FY13E respectively. Price to Book Value of the stock is expected to be at 9.66 x and 6.58 x respectively for FY12E and FY13E. The company has three manufacturing plants at Wagle estate Thane, Hoshiarpur and Jaunpur. It manufactures under different brand names of Hawkins, Futura, Contura and Ventura. The company is the largest cookware manufacturer in India and exports its products to more than 60 countries. The company continued its efforts on product development with more emphasis on research and development activity. The Top line of the company is expected to grow at a CAGR of 14% over 2010 to 2013E respectively. During the quarter, the company has reported Net Profit increased to Rs.93.27million from Rs.80.39 million in previous year same quarter. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.66.87 and Rs.72.05 respectively. On the basis of EV/EBITDA, the stock trades at 13.70 x for FY12E and 12.59 x for FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 1681 for Medium to Long term investment,” says Firstcall Research report.

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