HSIL Initiating Coverage Report By Emkay

Building Products segment remains the key growth driver for HSIL HSIL is the market leader in the Indian sanitary ware business with a dominant 40% market share. Strong brand creation, varied product portfolio, wide distribution network and rising acceptance of premium products have been the key drivers for HSIL’s sustained leadership. Given the strong revenue and earning drivers like government’s focus on sanitation (low sanitation penetration of 40%), increased housing & replacement demand, rising income level of the middle class coupled with company’s sustained efforts via new product launches, increasing share of premium products and expanding distribution network, we expect the building product segment to sustain market leadership and growth momentum. We expect this segment to report 17% CAGR over FY14-17E to Rs 14.2bn. Consequently, we expect the building product segment’s revenue share to rise from 47% of revenues in FY14 to 52% by FY17E.

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