Hawkins Cookers Limited - Analysis of Annual Report 2009-10

Business Highlight :

The company operates in a single segment, manufacture, trading and sale of Kitchenware. Both Sales and Profits   are the highest ever in the history of this company. Two new pressure cooker models were launched this year with sales pointing to 89,000 units. Four new cookware items were also launched with sales aggregating to 27,000 units. 

The Company claims that their products' demand is higher than their supply and they're implementing plans to increase the supply of their products. Due to this, FOB value of exports was also down due to delayed shipments.

The Company's plants are located at Thane, Hoshiarpur and Jaunpur District. The Company has taken into possession 20 acres of land provided by the Gov. of Punjab, the conveyance of which has yet to be finalised.

Financial Analysis :

Balance Sheet

1. Reserves & Surplus have increased by 56.76% to 33.61 crores from 21.44 crores in the current year. Loans have increased 39.74% to 12.27 crores.

2. Debt/Equity Ratio for 2009-10 is 0.31 vs 0.32 for 2008-09.

3. Net Fixed Assets have increased by 11.55% to 16.90% for the current year.

4. Net Current Assets / Working Capital has increased by 66.65% to 35.08 crores. Overall, the distribution of Working Capital across Current Assets and Current Liabilities have two significant changes over the preceding year

• Cash & Bank Balances have increased by a huge 174.25% to 39.41 crores from 14.37 crores.
• Provisions have increased by 73.57% to 26.80 crores due to increased dividend payment and ensuing tax.

5. Days Inventory Outstanding for this year is coming to be 97.62 days vs 90.10 days for the previous year. Days Sales Outstanding for this year is 34.62 days vs 36.21 days. Days Payable Outstanding for this year is 132.62 days vs 117.41 days for the previous year. Cash Conversion Cycle for this year is coming negative, -0.38 days vs 8.9 days for the previous year.

6. Capital Employed for this year has increased by 43.59% to 51.98 crores as compared to 36.2 crores for the previous year. 

Profit & Loss Statement

1. Net Sales increased by 18.25% to 285.56 crores from 241.47 crores. Excise Duty as a percentage of Sales decreased to 3.33% vs 5.17% for the previous year.

2. Sales percentage distribution for the current year is 

3. Sales percentage distribution for the previous year was 

4. Net Profit increased by 92.76% to 36.83 crores from 19.11 crores.

5. Finally, ROCE for the current year came out to be 106.92% vs 77.98%. ROE for the current year is 94.67% vs 71.49% for the previous year. Return over Working Capital for the current year comes to be 104.98% vs 90.78% for the previous year.

Conclusion :

Though, one can't deduce a great deal about the future prospects from the Annual Reports, still it has one of the finest Balance Sheet available in the country. This company is in a very sound financial position and it has been giving a very sound performance over the years. ROCE & ROE figures are evidence of this performance. Anyone with cool head and patience can buy this company on the supposition that sound performance comes from sound financial position.