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Last Updated : Feb 10, 2016 06:13 PM IST | Source:

Buy Hawkins Cooker; target of Rs 3100: Karvy

Karvy is bullish on has recommended buy rating on the stock with a target price of Rs 3100 in its research report dated February 04, 2016.

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Karvy's research report on Hawkins Cooker

Hawkins Cookers Ltd. has recorded top line growth 10.1% CAGR from FY13 to FY15. In FY15, top line grew by 12.6% against 7.6% in FY14. The key growth drivers of Hawkins Cookers is its continuous innovation of new products every year and strong branding through constant advertising of their products. The R&D expenditure for innovation has recorded CAGR of 68.5% from FY13 to FY15. On the other hand, advertising expenses have recorded CAGR of 32% from FY13 to FY15. The above two factors have enabled Hawkins to grow the volume sales by 6.6% in Pressure Cooker and 9.5% in Cookware in FY15. The top line of Hawkins is expected to grow at CAGR of 8.5% from FY15 to FY17E.

At CMP of Rs.2666, the stock is trading at P/E of 32.7x for FY17E. With the anticipated increase in top line due to strong brand positioning, innovation and new product launches, which were favourably received by the market, with strong balance sheet & financial ratios, we expect that the consumer expenditure will further increase as the economy revives and hence there will be growth in Hawkins Cookers Ltd. top line and bottom line as well. Based on P/E of 38.0x, we initiate the coverage with a “BUY” rating for a Target Price of Rs.3100 representing an upside of 16%.

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First Published on Feb 10, 2016 06:13 pm
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