Basant Maheshwari, our friendly neighbourhood stock wizard, will probably never forgive or forget Hawkins Cookers. The stock has the dubious distinction of causing the demise of his Top 10 stock advisory service. The service was coasting along nicely and Basant was enjoying his time in the sun. However, Basant’s obsession with Hawkins and his calling it his “top pick for 2015” in Outlook Business and the pathetic performance of the stock caused such a firestorm of criticism from his subscribers and the public that Basant had no choice but to abruptly wind up his service.
Dolly Khanna was amongst the first to realize that Hawkins Cookers would be unable to sustain its exorbitant valuations and that it would sink like a bloated ship. However, so as to not alarm her followers, Dolly followed the somewhat surreptitious practice of quietly jettisoning her vast holding a few shares at a time. By this clever process, Dolly brought down her holding to an insignificant level.
Basant Maheshwari never clarified what he did with his holding of Hawkins. Maybe, he also did the sensible thing of jettisoning the stock when no one was looking.
However, the astonishing part is that two ace stock pickers, Megh Mansetta and SBI MF, went the opposite way. They used every dip in the stock price to buy more and more in the fond hope that Hawkins Cookers would regain its mojo and once again bask in the sunshine.
Megh Manseta started the year 2014-15 with a holding of 32,500 shares. He went to the Hawkins counter on four occasions in Feb and March 2015 to buy a further lot of 2000 shares. His holding as of 31.3.2015 stands at 34,500 shares. His holding as of 30.06.2015 is not known.
R. Srinivasan of SBI MF is known to be a die-hard fan of Hawkins Cookers. His SBI Emerging Businesses Fund already holds a treasure trove of 210,000 shares of Hawkins. In addition, he got the SBI Magnum Balanced Fund and the SBI Small & Midcap Fund to buy aggressively in FY 2014-15 and thereafter. As of 30.06.2015, the three SBI Funds collectively hold 392,138 shares of Hawkins Cookers.
Megh Manseta and R. Srinivasan ought to have consulted Dolly Khanna before loosening their purse strings and splurging on Hawkins Cookers.
The Company reported predictably dismal Q1FY16 results. The top-line was flat but the net profit suffered a deep cut of 28%. The stock price plunged nearly 18% to touch a 52-week low of Rs. 2030. It settled 8.74% down to rest at Rs. 2255. This poor operating performance is one of many in a series.
|Hawkins Cooker Ltd – Quarterly Financial Results
|Particulars (Rs. cr)
The stock is still quoting at a P/E of 37. This implies that if the stock does not get its act together soon, there is still a long way to go before we can see the bottom.
Understandably, the punters at MMB were furious at this sorry state of affairs. When I last checked, they were busy making plans to go to the Company’s AGM which is scheduled for today and gherao Brahm Vasudeva and the other top brass of the company and demand an explanation on when the company will get its affairs in order.