Hindware Home Innovation _ A Contrary Viewpoint
A Premium Consumer Appliances and Building Products Company
Building Products Business - Bathware
Hindware Home Innovation is a leading player in the sanitaryware and faucets segments, offering products across various price points. The company maintains control over its entire value chain and has a robust distribution and service network, including:
Over 660 brand stores providing an immersive customer experience.
More than 500 distributors, dealers, and modern retail outlets.
35,000+ active retail touchpoints.
Serving 1,200+ institutional clients.
Plastic Pipes & Fittings Business
"TRUFLO by Hindware" is among the fastest-growing plastic pipes and fittings brands in India. With over 2,000 SKUs currently available and more being added, TRUFLO aims to become one of the top five CPVC players within three years.
Consumer Appliances Business
Despite inflation and rising competition, Hindware continues to lead in the kitchen appliances segment. The company is actively expanding its product portfolio and streamlining offerings to improve margins. Its range of IoT-enabled, voice-controlled smart appliances include water heaters, air coolers, chimneys, and air purifiers, setting a high industry standard.
Financial Performance (March 2021 to TTM)
Revenue Growth: From ₹1,775 crore to ₹2,766 crore.
Operating Profit: Increased from ₹143 crore to ₹241 crore.
Operating Profit Margin (OPM): Improved from 8% to 9%.
Net Profit: Declined from ₹55 crore to ₹23 crore.
Cash Flow from Operations: Rose from ₹234 crore to ₹241 crore.
Debtor Days: Reduced from 84 to 59.
Cash Conversion Cycle: Increased from 123 days to 171 days.
Promoter Holding: Increased from 51.11% to 51.32%.
FII Holding: Grew from 3.74% to 6.05%.
DII Holding: Increased from 5.74% to 7.09%.
Market Cap: ₹2,084 crore.
Stock PE Ratio: 61.10, compared to the industry average of 64.00, positioning it as the second-best in its peer group.
Credit Rating and Outlook
Long-term Bank Facilities: CARE A; Stable (Revised from CARE A+; Stable).
Short-term Bank Facilities: CARE A1 (Revised from CARE A1+).
The stable outlook reflects expectations of continued benefits from the company's established market presence, large distribution network, and sequential improvements in financial risk profile. HHIL aims for sustained growth in revenue, profitability, and cash accruals, which should lead to an improved capital structure and better debt coverage indicators in the near-to-medium term.
Weekly Chart
Technical Outlook
Hindware Home Innovation's stock (HINDWAREAP) has recently experienced a downward trend, with a decline of approximately 47.81% over the last year. The current stock price hovers around ₹287, showing a 10.59% drop over the past month. Despite this decline, technical indicators suggest potential support levels between ₹282 and ₹287, indicating possibilities for a future price rebound.
Relative Strength Index (RSI):
Weekly chart: RSI stands at 32.66, suggesting neutrality.
Daily chart: RSI is at 14.41, indicating oversold conditions, often a precursor to a potential stock reversal.
Future Outlook
The future outlook for Hindware Home Innovation is cautiously optimistic. While recent stock price declines pose challenges, the company's leadership position in building products and consumer appliances provides opportunities for growth. Analysts anticipate that if the company effectively leverages its market position, innovation, and strategic investments, it could deliver strong returns over the long term.
Conclusion
The long-term outlook for Hindware Home Innovation appears positive despite recent market corrections. The company's strong market leadership, innovative products, and sound financial strategies suggest that it has the potential to deliver impressive returns over an extended period, contingent on favorable market conditions and competitive dynamics.
Disclaimer: This document is for informational purposes only and does not constitute investment advice. All opinions expressed are personal and may contain errors.