Hindware Home Innovation Ltd is a small-cap with a market capitalisation of Rs 3100 crore and a free float of Rs 1500 crore. Thw promoters hold 51.32% of the equity capital while the public holds 48.68%. A number of prominent PMS Funds, FIIs and HNI’s hold significant stake in the Company as shown below:
| Shareholder | Nos of shares | % |
| Mutual Funds/ | 30,78,060 | 4.26 |
| LIC MF CHILDREN`S GIFT FUND | 8,15,872 | 1.13 |
| DSP SMALL CAP FUND | 19,14,120 | 2.65 |
| Alternate Investment Funds | 39,13,047 | 5.41 |
| ABAKKUS GROWTH FUND-2 | 10,12,607 | 1.40 |
| ABAKKUS GROWTH FUND-1 | 21,86,234 | 3.02 |
| Foreign Portfolio Investors Category I | 40,12,606 | 5.55 |
| INDIA INSIGHT VALUE FUND | 7,98,000 | 1.10 |
| MATTHEWS EMERGING MARKETS SMALL COMPANIES FUND | 9,55,695 | 1.32 |
| AL MEHWAR COMMERCIAL INVESTMENTS L.L.C. – (NOOSA) | 15,52,479 | 2.15 |
| Foreign Portfolio Investors Category II | 14,73,935 | 2.04 |
| COHESION MK BEST IDEAS SUB-TRUST | 10,50,000 | 1.45 |
| Resident Individuals holding nominal share capital in excess of Rs. 2 lakhs | 56,89,693 | 7.87 |
| MUKUL MAHAVIR AGRAWAL | 8,00,000 | 1.11 |
| GANESH SRINIVASAN | 11,00,000 | 1.52 |
| MANAV GUPTA | 15,00,000 | 2.07 |
BOBCaps recommends buy of Hindware Home Innovation Ltd for target price of Rs 600 which is a 40% upside from the CMP
The report reads as follows:
Tough quarter but outlook healthy
EBITDA fell 35% short of our estimate due to tepid demand climate and steep margin compression across segments
Management guiding for sharp operating margin expansion from 8.6% in FY23 to 13-14% over the next two years
TP cut to Rs 600 (vs. Rs 700) on 13% reduction in our EPS estimates for FY25 and FY26; maintain BUY
Weak Q3: HINDWARE missed our estimates on all counts in Q3FY24, with revenue/EBITDA/adj. PAT coming in 11%/35%/79% below expectations, due to a tepid demand environment and sharp margin compression across segments. Revenue for the quarter fell 3% YoY, but EBITDA grew 2% off a low base.
Poor performance across segments: HINDWARE reported better revenue growth (+5.6% YoY) compared to CRS (-3.1%) for the bathware segment in Q3. However, its bathware EBITDA margin fell sharply by 255bps QoQ to 13.6% owing to higher advertising spend. Plastic pipe volumes declined 3% YoY and segment EBITDA margin dropped 310bps QoQ to 7.7% following a steep decline in resin prices. Consumer appliance revenue declined 5% YoY and operating loss has risen sequentially as the company exited non-performing product categories.
Margin guidance intact: Management believes demand conditions could remain challenging ahead of India’s general elections. The company expects consolidated revenue to grow 15-17% and EBITDA margin to improve sharply to 13-14% over the next two years. CRS retained guidance of expanding bathware EBITDA margin to 18% over two years, with plastic pipe volumes targeted to grow at more than 15% and the segmental margin improving to 10-12%. Management also expects the consumer segment to fare better over the next 2-3 quarters due to rationalisation of the product portfolio. The company plans to exit the loss-making retail business soon.
Maintain BUY, TP cut 14%: We reduce FY24/FY25/FY26 EPS estimates for CRS by 36%/13%/13% to account for the disappointing quarter. Even so, we still expect the company to clock a robust EPS CAGR of 48.8% over FY23-FY26. This coupled with reasonable valuations leads us to maintain our BUY rating. The stock is trading at 26.5x on 1Y forward P/E vs. its historical average of 33.6x. We value CRS at an unchanged P/E multiple of 30x on Sep’25E EPS – close to its historical average – and have a revised TP of Rs 600 (Rs 700 earlier) following estimate changes.
Click here to download Hindware Home Innovation -Q3FY24 Result Review 13Feb24 – BoBCaps Research
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