Multi Baggers

Hawkins Cooker is a leading manufacturer of cookers with almost 30% market share, facing competition from both the organised and unorganised sectors. Hawkins has an extensive product range consisting of pressure cookers, cooker accessories, non-stick cookware, cuisinettes and satilon cookware. Exports consists of 10% of the business and they export to around 20 countries around the world.

Its brand 'Futura' has a great potential. They started off with pressure cooker, but now have cookery range under the brand. It is more premium and fashionable than Hawkins. The product is sold in some of the top departmental stores in Europe and America.

Hawkins is listed only on BSE. TTK Prestige is the only major competitior for the company. The 52-week high for the stock is Rs 128.70 and the 52-week low is Rs 63.50.

The stock is a good proxy for the housing sector. The recent changes in VAT have meant that the unorganised sector has become less competitive and the two major players in this segment-Hawkins and TTK Prestige have become stronger. In fact this has started to reflect in the results also. Their sales and bottomline were up almost 30% in the last quarter.

Net profit of Hawkins Cooker rose 23.36% to Rs 3.01 crore in the quarter ended March 2007 as against Rs 2.44 crore during the previous quarter ended March 2006. Sales rose 29.28% to Rs 58.64 crore in the quarter ended March 2007 as against Rs 45.36 crore during the previous quarter ended March 2006.

The company has a small equity base of 5.3 crores. For the full year, net profit rose 85.86% to Rs 7.49 crore in the year ended March 2007 as against Rs 4.03 crore during the previous year ended March 2006. Sales rose 27.04% to Rs 173.24 crore in the year ended March 2007 as against Rs 136.37 crore during the previous year ended March 2006. For FY 08, the company is expected to post sales of almost Rs 250 crore and as against this the current market cap of the company is only around Rs 65 crores. This makes the stock attractive from the Market Cap/Sales point of view.

The trailing EPS of the company is about Rs 14 and against the current market price of Rs 119, it is trading at attractive P/E multiples of around 8.5 times. In this quarter, they have earned around Rs 6 EPS and I expect them to earn Rs 18-20 for the year going forward. The current market price also includes Rs 7 dividend, resulting in an attractive dividend yield of 5-6%. The promoter base is also solid and they own almost 56% in the company. The stock has the potential to reach Rs 180 in the next 1 year.

Disclaimer: I hold the stock in my personal capacity.