HSIL Ltd - Result Update
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Transcript of HSIL Ltd - Result Update
8/6/2019 HSIL Ltd - Result Update
http://slidepdf.com/reader/full/hsil-ltd-result-update 1/4Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.
Email: [email protected]
ONG TERM INVESTMENT CALL
BUY27 July 2011
Company Report | Q1FY12 Result Update
Q1FY12 Result Highlights
HSIL announced its Q1FY12 results and reported a very strong
performance. Its revenues increased to INR 3280 mn, an increase of 41.5%
as compared to Q1FY11. The EBITDA posted by the company was INR
627 mn, an increase of 55.5% YoY. EBIDTA margins increased by 180
basis points to 20.4%
The Profit before Tax (PBT) increased to INR 417 mn, a rise of 130% as
compared to the first quarter of the previous financial year. The Profit
after Tax (PAT) showed a robust growth of 111% to INR 285 mn. The
PAT margins increased substantially by 309 basis points to 9.36% Cash
profits showed strong growth of 32% to INR 410 mn.
The two divisions of the company i.e. the Building Products division and
the Container Glass division recorded robust sales growing by 29% and
53% YoY.
The company has reported outstanding results for Q1FY12 beating most
forecasted estimates. Both divisions of the company i.e. the Building
Products division and the Container Glass division have performed well
both on absolute as well as margin parameters. Currently, all plants of
the company are running at full capacity. The sanitary ware division is
running at 116% capacity and the Container glass division is running at100% capacity.
The Building Products division recorded 29% growth in revenue and a
10% growth in volume for this quarter. The Container Glass division
recorded a 53% growth of which 31% was due to volume growth and
22% was due to realization and product mix growth.
Outlook and Valuation
The management of the company has focused on certain key parameters,
which resulted in a stellar performance for this quarter. The efficiency ofthe plants has been improved. The company has launched new designs
across product segments. There has been a focus on premium products
and segments, which have higher profit margins. The company has
expanded its distribution network and has ~1550 distributors and ~12,000
retailers. .
The management is confident of achieving more than 30% growth in both
sales and profits for the entire year. For FY12, the management has given
revenue guidance of ~INR 15000 mn and EBIDTA estimates between
~INR 2900-3000 mn.
IndustryBuilding Products
& Container GlassCMP (INR) 219
Target (INR) 265
52 week High/Low (INR) 229.80/106
Market Cap (INR Mn) 14450
3M Avg. Daily Volumes
(‘000)166.8
Company PE (FY12e) 10.5x
Shareholding Pattern (%)
Stock Performance
Performance (%)
1 Month 3 Months 1 Year
HSIL 24.3 38.9 83.4
NIFTY 1.9 -5.0 2.9
8/6/2019 HSIL Ltd - Result Update
http://slidepdf.com/reader/full/hsil-ltd-result-update 2/4Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.
Email: [email protected]
In future, HSIL plans to focus on Brass Chrome Plated Bath Fittings (Faucets)
segment with a target to become the second largest player in the faucet market in
India, having an estimated size of ~INR 30000 mn. After the acquisition of the
faucets division of Havells India at Bhiwadi, Rajasthan, the company is now
running it at 100% capacity. It has discontinued Crab Tree brand and markets it
under the Vanilla brand. It currently manufactures 3 lac pieces per annum, and
capacity is expected to increase to 5 lac pieces per annum once the expansion is
complete in September 2011. The faucets division contributed 17% of the Building
Products revenue last year.
It has acquired a 100% stake in Garden Polymers Pvt Ltd (turnover of INR 1050
mn). The company manufactures PET bottles, caps and closures with two plants
strategically located at Dharwad, Karnataka and Selaqui, Uttrakhand. This
company should grow at 20 to 25%
For FY2011-2012 the company has planned capex of INR 6500 mn, which is
expected to be completed as per projected schedule. This capex has been spread
over 2.5 years, with INR 1600 mn having already been invested, it is projected that
INR 2000 mn will be invested this year; the remaining amount will be invested
during the next 18-24 month time-frame. The company is looking to have a presence
in every city having a population of over 25,000 people.
At current market price of INR 219, the stock is trading at a P/E of 10.5x for FY12
est. earnings. Looking at the robust performance by the company in the first quarter
and given the expansion plans in place and management capabilities to drive the
business, we re-rate and recommend a “BUY” on the stock with a price target of
INR265.
8/6/2019 HSIL Ltd - Result Update
http://slidepdf.com/reader/full/hsil-ltd-result-update 3/4Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.
Email: [email protected]
Financials(INR in mn)
Q1 FY12 Q1 FY11 Y-o-Y Q4 FY11 Q-o-Q
Net Revenue 3,048 2,159 41.2 11,093 -72.5
Other Operating income 20 14 37.1 740 -97.3
Net revenue & Other operating income 3,067 2,173 41.2 11,832 -74.1
Other income 11 3 251.6 36 -69.7
Total Income 3,078 2,176 41.5 11,868 -74.1
Operating Exp. 2,451 1,773 38.3 8,392 -70.8
EBITDA 627 403 55.5 3,476 -82.0EBITDA (%) 20.4 18.6 188 bps 29.4 -894 bps
Depreciation 132 127 4.4 535 -75.3
EBIT 495 277 78.8 2,941 -83.2
EBIT (%) 16.1 12.7 336 bps 24.8 -871 bps
Financial charges 78 96 NA 356 -78.1
PBT 417 181 130.3 2,585 -83.9
Tax Provision 132 46 188.8 399 -66.9
Tax Rate (%) 31.7 25.2 641 bps 15.4 1622 bps
PAT285 135 110.6 2,186 -87.0Reported PAT 285 135 110.6 2,186 -87.0
Reported PAT (%) 9.3 6.2 304 bps 18.4 -916 bps
EPS 4.3 2.5 75.7 13.3 -67.4Source: Company, Unicon Research *Standalone Financials
8/6/2019 HSIL Ltd - Result Update
http://slidepdf.com/reader/full/hsil-ltd-result-update 4/4Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.
Email: wealthresearch@uniconindia in
Unicon Investment Ranking Methodology Rating Buy Accumulate Hold Reduce Sell
Return Range >= 20% 10% to 20% -10% to 10% -10% to -20% <= -20%
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