Hawkins Cookers, which occupies a pride of place in Rakesh Jhunjhunwala’s Model Portfolio, justified its’ inclusion in the hallowed portfolio by spurting Rs. 159 or 8.75% today, on news that the dispute between it and the PCB as well as with the labour had been resolved. The total return that Hawkins Cookers has given since its inclusion in the Model Portfolio on 9th August is 26%.
Hawkins issued a terse and concise statement in the morning stating:
“Further to Note No.3 which formed part of the Unaudited Financial Results for the quarter ended June, 2012, published on August 06, 2012, we have to advise all concerned that we have received a No Objection Certificate dated October 22, 2012 from the Punjab Pollution Control Board for our Hoshiarpur factory for manufacturing 5,200 pressure cookers and their components per day, as applied for by the Company.
Further to the mention made in our Directors’ Report dated July 02, 2012, forming part of the Annual Report for the year 2011-12, we have to report that the Industrial Relations situation in our factory in Jaunpur district has been largely resolved by the signing of a Wage Agreement between the Company and 85% of the workmen and the registration of the said Agreement on October 20, 2012 by the Assistant Labour Commissioner, Varanasi.”
| Hawkins Cookers’ Financials | |||
|---|---|---|---|
| (Rs cr) | Jun 2012 | Jun 2011 | YOY |
| Operating Income | 82.52 | 75.00 | 10.03 |
| Total Expenses | 74.92 | 63.92 | 17.21 |
| Operating Profit | 7.60 | 11.08 | -31.41 |
| Other Income | 1.41 | 0.94 | 50.00 |
| PBDIT | 9.01 | 12.02 | -25.04 |
| PBT | 7.77 | 10.79 | -27.99 |
| Adjusted Net Profit | 5.24 | 7.29 | -28.12 |
As soon as the news filtered out, investors let out a sigh of relief and rushed to the Hawkins Cookers counter to congratulate it on its achievement.
Looking forward, Hawkins does have a bright future given its strong brand and the huge demand for pressure cookers across the Country.
The only problem is that at the TTM EPS of Rs. 56.88, Hawkins Cookers is quoting a P/E multiple of 34.81 which will frighten a number of investors. However, one must remember that a quality stock always has a premium attached to it and the price you pay becomes well worth it over a period of time. My own experience, for what it is worth, is that it is better to buy a quality stock at a expensive price than to buy a junk stock at a cheap price. One has to just wait for declines to slowly and quietly load onto the stock.
MY view best time to buy for long term like rel infra, r.com, reliance capital, tata steel, dena bank,andhra bank, hil ltd, tcs, infosys,and reliance ind .