Categories

10000 to 4crs in 18 months 1000rs to 50crs 300% returns 75% promoter holdings A 50 bagger A sureshot 5 bagger Analysis Another fraud? Auto ancillaries Bank sector Blind sell Brand plays Broking Bse Nse Buy calls cements Ceramics/tiles Counters I don't like Debt free businesses Delisting candidates demerger bets Disclosure- I own them Domestic consumption plays E-Commerce pick Education Exit at rallies Famous analysts Famous stocks FMCG Footwear future multibaggers Gems andJewellery Hidden gems High conviction ideas High dividend plays High potential small caps High ROE stocks Holding companies Hotel sector How they looted you.. Indian stock market Infrastructure sector Interesting Microcaps IT KPO Landbank plays largecap ideas Less than 5 PE stocks Liquor Logistics Market lessons Market outlook for 2013 and 2014 Market underperformers Meeting with the CEO Metals Monopoly businesses My 5 baggers My Favourite counters My paid stock recommendations My stock picking techniques nse bse tips Oil exploration Operator calls Paints Penny stock outlook penny stock updates Pharma sector Poultry stocks PSU Publicity freaks Real estate Renewable energy plays Safe bets Sell recommendations Share market Live shipping stocks short term call SOTP plays stock tips stock under 10rs Stocks to watch out for Strong bonus candidates Takeover candidates TATA product tea Textiles The 13 bagger The 45 bagger Trading companies Transformers Turnaround bets Tyres Uncertain/Risky business models Unique businesses

Search This Blog(Over 800 companies covered in the blog).

Please note

Note: The artciles are not research reports but assimilation of information available on public domain and it should not be treated as a research report.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure: It is safe to assume that I might have the dkiscussed companies in my portfolio and hence my point of view can be biased.Readers should consult registered consultants before making any investments
.

Archives : Old artciles

Tuesday, January 27, 2009

Hanung toys(Textile and retail play-Amazing potential):-Emerging star in the textile segment

Scripscan:-Hanung Toys and Textiles Ltd
Cmp:28
Traded in:NSE-BSE

Introduction:-Hanung Toys & Textiles is engaged in the business of manufacturing and exporting of soft toys.It also manufactures and exports of home furnishings.The company is basically an export player deriving 75% of its revenues from overseas markets, mainly Europe & US.

I like it because:-

1)Hanung is the biggest organised soft toy manufacturer in India today and it hopes to be a 1000crs company by march 2010.

2)Hardly input cost problems.The company saves on raw material by entering into long-term contracts with suppliers. Its plants are located in tax-free and special economic zones,leading to substantial tax savings.Forward hedging and interest swaps also help the company keep a lid on costs.Even the rise of the rupee isn't a cause for concern.

3)Over the next few years, the company is planning to expand its footprint across the country;it is already present in over 4,000 stores, including chains such as Kids Kemp, Lifestyle,Land Mark,Big Bazaar, Globus,Shoppers Stop, Westside, Piramyd, etc.The company is planning to set up 10000 retail outlets over the next two years.To capture the larger pie of the domestic market it has also formed strategic alliances with biggies like Star India & Percept Pictures company.

4)The size of domestic toy industry is around Rs.2000crs.The domestic toy industry is poised to grow at 35-38% p.a. over the next few years on account of rapidly growing Indian population and on higher disposable incomes.Players like hanyung with its large capacity and experience would benefit the most from it.

5)The company has taken number of initiatives to further grow its market share in the export market.A new and vibrant team has been put into place for Product design, Product development, Sales and Marketing.To have a good balance on the market development,its emphasis is on growing market share in the US, Europe and Asia-Pacific.The same is expected to catapult hanung toys into a different league.

6)Very recently in april itself the companys newly formed toy unit in noida Sez with an installed capacity of 63 lakh pieces p.a has started its production.Being on the SEZ area the company would avail tax benefits and the revenue share from the soft toy business would get a further boost.

7)The company has got the lucrative licence to manufacture soft toys resembling characters such as Mickey Mouse and Nemo.With growing exposure to Western cartoon characters,this could attract tremendous interest.The company has attempted to grow inorganically and has acquired 100% stake of a Chinese soft toys manufacturer.The same may just give a booster to the margins.

8)Hanung home furnishings business product range includes from sheets and comforters to pillows and sleeping bags.The company has recently set up a Home Furnishings facility at Roorkee with an installed capacity of 3.5crs meters of fabrics processing p.a.The made-ups capacity has been increased form 13 lakh sets to 66 lakh sets p.a.

9)The company is also integrating backwards into manufacturing
fabrics by setting up a 69 lakh meters of weaving capacity.The facility spreaded over 25 acres will enable it income tax, excise & sales tax benefit and is expected to save income tax to the extent of Rs.8.5crs in FY09 thereby directly boosting the bottomline.The unit is expected to contribute around 45% to the total revenues of Hanung by FY09. In FY07, the home textiles division’s contribution was 46% of total revenues, which is expected to increase to 58% in FY08 & 70% in FY09 post this expansion.

10)The company has got a robust order book position to the tune of 1300crs giving huge revenue visibility.The company has received numerous enquiries from client which can trasnform into major orders going forward.The companys Customers include likes of IKEA, Asda, and Metro.IKEA is a EURO 19.6 bn company and sells home furnishings & other housewares in about 270 stores in 35 countries.With Ikea looking to outsource most of its portfolio from india,Hanung fortunes may just change completely.Already it has bagged a single major order of 600crs from the former.Few more such orders could prove a world of good for the company and it shareholders.

Conclusion:-At present price of 28 the company is quoting at less than 1.5x fy09 earnings of 20rs.Considering the capacity expansion,increase in size,robust outlook and huge demand for both of its home furnishing and soft toys products,I assign a doubling target with a long term horizion..A very solid and a safe bet.



Regards,
ARUN
I can be reached at:-arunanalyst@rediffmail.com

Important Disclaimer&Privacy policy

This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: arunsharemarket@gmail.com Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.
 
x

Subscription to Arunthestocksguru

Enter your email address:

Delivered by FeedBurner