HINDUSTAN FOODS LTD Q4 FY 20 RESULTS REVIEW

HINDUSTAN FOODS LTD

Q4 FY 20 RESULTS REVIEW

COMPANY OVERVIEW      

                  

Hindustan Foods Ltd established in 1988 as a joint venture with Glaxo India Ltd., and represents the Groups foray into FMCG, with the manufacture of cereal based food products, including baby foods and instant porridge. 

MANAGEMENT

                               

Shrinivas Dempo | Chairman, Non-Executive

Sameer Kothari | Managing Director

SWOT ANALYSIS

STRENGTHS

• High Growth Stock
• Promoters increasing shareholding
• high TTM EPS Growth
• Increasing Revenue every Quarter for the past 4 Quarters
• Increasing profits every quarter for the past 4 quarters
• Company with Zero Promoter Pledge
• Bullish Reversal

THREATS

• Stocks with high PE (PE > 40)

Hindustan Foods (in Rs. Cr.)	Mar '20	Dec '19	Sep '19	Jun '19	Mar '19	YOY	QOQ
Net Sales	247.66	207.14	113.52	77.67	17.26	1334.88	19.56
Raw Materials	217.9	177.02	88.08	55.27	-2.31	9532.9	23.09
Other Expenses	20.4	18.4	15.35	14.01	15.13	34.83	10.87
Interest	3.69	2.38	1.74	1.68	0.73	405.48	55.04
P B T	10.23	10.15	6.01	4.12	0.75	1264	0.79
Tax	3.12	3.66	1.62	1.1	-0.27	-1255.56	-14.75
Net PROFIT	7	5.94	4.23	3.02	1.02	586.27	17.85
Equity Share Capital	21.2	13.49	13.49	13.49	13.49	57.15	57.15
Basic EPS	3.38	3.22	3.13	2.24	--		4.97
Diluted EPS	3.38	2.8	2.6	1.92	--		20.71
MP	530
PE	39
14.05.2020
52 Wk L/H	330	750

Valuation

Market Cap (Rs Cr.)  1,120.21

P/E 53.48

Book Value (Rs)   88.62

Industry P/E   60.89

EPS (TTM)  9.91

P/C  34.8

Price/Book  5.96

Face Value (RS)   10

Deliverables (%)  73.16

Share Holding Pattern in (%)                            

Standalone          Mar-20      Sep-19       Jun-19       Mar-19

Promoters          62.62         61.87         61.87         61.87

Pledged              0                0                0                  0

FII/FPI               6.62          10.08            10            9.94

Total DII           20.73         12.68           12          11.91

Fin.Insts              0              0                  0             0

Insurance Co       0.03          0.05         0.05           0.05

MF                      0                0                 0              0

Others DIIs         20.7         12.63         11.95         11.86

Others                10.03         15.36         16.13         16.29

Total                   100            99.99         100          100.01

Action in Hindustan Foods Ltd.

Technicals

Hindustan Foods closes above 150-Day,200-Day Moving Average today.

29-Jun

Only Buyers

Hindustan Foods closes above 30-Day,50-Day Moving Average today.

26-Jun

Only Buyers in HF on NSE

Jun 26, 14:35

ANNUAL REPORT 2019

Business and Financial Performance

company closed the financial year with a record financial performance with a turnover of INR 237 Crore, a growth of 70% year on year; a profit after tax of INR 10 Crore, a growth of 60%; and Earnings per shares of INR 7.65, a growth of 60%. 

Company has seen exponential growth in sales and profitability for the year 2019 and I am confident that the management will continue to deliver similar growth in the future. 

company has ventured into various new categories of products across the FMCG industry and has signed on new customers in this year. 

It is definitely on track of becoming the largest diversified contract manufacturer in the country. 

HFL is the brawn behind many of the brands that we use on a daily basis. The opportunities ahead are exhilarating and encouraging for all of us.

Over the years ahead, India will continue to see tens of millions of urban and rural consumers aspire to use packaged > reputed brands that offer them good quality and value. 

This will undoubtedly lead to accelerated growth in India, for several categories of consumer-packaged goods, including personal care, detergents, tea, coffee, juices and water.

various opportunities are being thrown up due to the changes in the regulatory environment (GST), changes in the distribution network (modern trade and e-commerce) etc. 

Company successfully raised INR 100 crores by issuing Convertible Warrants in order to build the financial ability to leverage these opportunities.

The existing business of Foods in Goa, the Leather shoes business in Pondicherry and the household pest products in Jammu continue to perform consistently. 

The new factory at Coimbatore has started packing tea and coffee and I am confident that in the coming years it will be one of the largest tea packing factories in the country. 

Additionally, the acquisition of the new detergent powder product manufacturing plant located in Hyderabad and expansion being done at that factory will make Hyderabad the largest location for the company. 

This expansion is on track and should start commercial production from November this year.

HFL had acquired a stake in the beverage manufacturing company at Mysuru, ATC Beverages Private Limited and started manufacturing Paper Boat brand of beverages at the factory. So, more contract manufacturing solutions across product categories and increases our confidence in taking up more challenges. ·

 Company is actively looking at various organic and inorganic opportunities -to provide world class solutions to the FMCG industry in the areas of Product Innovation, Manufacturing and Distribution. 

In the year 2017, your Company had under taken a very clear goal of growing 20x by 2020-from a turnover of 38 crores. It is on track to achieve that goal.

PRODUCTS

Fabric Care

•Liquid Detergent

•Powder Detergent

Home Care

•Surface Cleaner

•Glass Cleaner

•Toilet Cleaner

•Liquid Dish Wash

Pest Control

•Coils

•Aerosols

•Liquid Vaporizer

•Mosquito Mat etc.

Hair Care

•Shampoo

•Hair Oil & Food etc.

Toiletries & Fragrances

•Shaving Cream

•Hand Wash

•Eau de Toilette

Baby Care

•Shampoo

•Cream & Lotions

•Baby Oil etc.

Skin Care

•Face Wash & Scrub

•Body lotion

•Moisturizer etc.

Leather Shoes & Accessories

•Men's footwear

•Women's footwear

•Footwear for Juniors

•Uppers

•Accessories

P L A N T S

 

JAMMU

•Spread across 35,143 square meters of area at IGCII,SIDCO Samba

•Manufactures pest control products such as coil, aerosols and vaporisers

•Unit was acquired from Reckitt Benckiser(India)Pvt.Ltd. by the end of 2017 and commenced commercial production from 2^nd January 2018

COIMBATORE

•Intends to process, blend and pack tea,coffee & soup products

•High speed single-track and multi-track packing line, Completely automated end-to-end pneumatic material handling

·       Spread across 85,000 square feet and the facility commenced production in December 2018

HYDERABAD –1stPlant

•This facility is engaged in the manufacturing of detergent powders

•Unit boasts of a fully automated end-to-end material handling where we manufacture 75,000 tonnes of detergent powder for national brands

HYDERABAD –2ndPlant

•Facility is engaged in the manufacturing of manufactures Liquid Detergent, Fabric Conditioner &Softener, Liquid Soaps and Shampoos

Capacity: Liquids : 60,000 KL per annum

PUDUCHERRY

•Facility was an acquisition by HFL of Ponds Exports Ltd which is a subsidiary of Hindustan Unilever Ltd. In 2016-2017

•Manufactures Leather shoes

•Robust quality assurance system, excellent manufacturing practices with the use of KPI stomeasure and monitor performance

•Well equipped design studio with CAD-CAM facility

Full Shoes Production Capacity : 5 Lakh pairs Shoes Uppers Production Capacity : 7 Lakh pairs

MUMBAI

Was Acquired As A non-going concern

•Commenced Production in June 2018

•Manufactures leather products for women, men and children–slippers,sandals,open toe,high heels,huarache and mules.

Capacity: Sandals Capacity : 1 Mn pairs p.a.

Shoes Capacity : 0.37 Mn pairs p.a.

MYSURU

•HFL acquired 40% stake in ATC Beverages Ltd. InJanuary2019

•The facility is spread across 15.5 Acres of land and is engaged in the business of manufacturing and distribution of beverages likes oft drinks ,juices and energy drinks

•The facility has fully automated filling and packing lines

Capacity : 5.84 Mn Cs p.a.

GOA

•Plant is located at Usgaon, Ponda, that is spread across 52,625 square meters of area

•Manufactures food products such as cereals, porridges and snacks

•Facility is equipped with the state-of-the-art twin-screw extruder technology to manufacture superior quality cereal-based food products

Extrusion Capacity : 6,000 Tons p.a.

Dry-Mix Blending Capacity : 1,000 Tons p.a.

Way Forward

•HFL is targeting to double revenues by FY 2022

•In Q4 FY2020, the Board approved the merger of another Vanity Case Group plant at Coimbatore (Malted beverages–Horlicks & Boost) with HFL

•Additionally, the Company is also gearing up its private label division to cater to the e–commerce and retail players

CAPITAL EXPENDITURE

Set up floor cleaner and toilet cleaner manufacturing facility in Silvassa for leading home care brands with an investmen t of Rs.30 crores in this facility which includes buying out the existing factory of the promoter group and additional investments

•The factories will have a capacity to manufacture around 20,000 Kl of liquids and the company hopes to enter into a multi-year contract for the same