Hatsun Agro And Hawkins Cookers Research Report By Karvy

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.

Hatsun is the leading branded player in southern India and is taking steps to penetrate deeper in these markets. Value added products and ice cream business are likely to support margins and drive revenues for the company. Stock is currently trading at 26.0x FY17E EPS and we value the company at 30.5x and arrive at target price of Rs. 476 for holding period of 9-12 months with upside potential of 17%.

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