Hawkins Cookers Ltd is engaged in Manufacturing, Trading and Selling Kitchenware. The Company’s products include Pressure Cookers and Cookware.
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- About
- About the Founder
- Shareholding Pattern
- Executive Management
- Business Segments
- Cost Structure
- Financial Highlights
- Ratios
- Management Discussions
- Strengths & Weaknesses
(A) Introduction
- Hawkins Cookers Limited established as a Private Limited company in 1959 by H.D. Vasudeva, in technical collaboration with L.G. Hawkins of England.
- Today, it has two Offices and three Manufacturing Plants at Thane – Maharashtra, Hoshiarpur – Punjab and Jaunpur – Uttar Pradesh.
- The Company exported its products since 1974 to various countries - in each of the six continents of the world.
- In 1975, company converted into a Public company and changed to its present name “Hawkins Cookers Limited”. It manufactures its products under its own brand names – Hawkins, Futura and Miss Mary.
- Hawkins has an extensive product range consisting of Pressure Cookers, Cooker Accessories, Non-stick Cookware, Cuisinettes and Satilon Cookware. All Hawkins pressure cookers are guaranteed for five years.
(B) About the Founder
Mr. H.D. Vasudeva, professional manager turned entrepreneur found Hawkins Cookers Ltd. He found success early in life but by the partition of India, he had to start in mid-life all over again. He started the company in technical collaboration with England based company L.G. Hawkins at the age of 54 in the year 1959 with a capital of Rs.20,000, when pressure cookers were virtually unknown in India.
Then after 25 years, he stepped down from the management passing on his legacy to his son ‘Mr. Brahm Vasudeva’. Later in 1984, Mr. Brahm Vasudeva became the Managing Director of the Company.
(C) Shareholding Pattern
(D) Executive Management
(i) Mr Brahm Vasudeva - Non-Executive - Non Independent Director
He passed away on 10 July 2020 at the age of 84 years. Mr Brahm was the son of founder Mr H.D. Vasudeva. In 1984, he joined the company as Chairman & Managing Director. In 2006, Mr. Brahm Vasudeva retired as Chairman and CEO.
(ii) Mr. Subhadip Dutta Choudhury - Chairman, MD/CEO
He joined the Company in 1992 as a Management Trainee & worked for 8 years as a Sales Manager. Mr Subhadip became Vice President in Marketing in 2000. Then, he became Executive Director - Marketing in 2004. His age is 54 years. By qualification, he did B. Tech. Electrical Engineering, IIT, Kharagpur, Post Graduate Diploma in Management, IIM, Calcutta.
He is not related to Vasudeva family.
His remuneration for FY21 amounted to Rs. 5.32 crore which is 6.59% of Net profit for the year & 0.69% of Net Sales.
Recent Controversy experience: As on 11 April 2019, Chief Judicial Magistrate, Hoshiarpur, under Factories Act, 1948, alleged that the company's Hoshiarpur factory has not provided the facility of an Ambulance Room & related staff in the factory. Then, an order passed on April 11, 2019, for the accused Mr. Subhadip Dutta Choudhary & factory manager, Mr. Sandeep Singh Toor to undergo simple imprisonment for a period of six months & also to pay fine of Rs.25,000 each. Bail granted to both accused.
(iii) Mr Sudeep Yadav - Vice Chairman Executive Director
He is son in law of Mr Brahm Vasudeva. Mr Sudeep did B.Tech. from Indian Institute of Technology, Delhi & Postgraduate Diploma in Business Management from Indian Institute of Management, Calcutta. He joined the company on 22 July 2013. Also, he worked with Citibank N.A. for 12 years & in ANZ Grindlays & Standard Chartered Bank for 9 years. At Hawkins, he holds position of Director in Finance & Administration. He is 54 Years old.
His remuneration for FY21 amounted to Rs 3.90 crore which is 4.83% of Net profit for the year & 0.50% of net sales.
(iv) Mr. Tej Paul Sharma
Mr. Tej Paul Sharma was appointed as the Executive Director – Sales with effect from August 1, 2021. He is 61 years of age and has joined the company in 1983. He is a B. Com. graduate from St. Xavier's College, Calcutta. He has 41 years of experience in sales.
His remuneration for FY21 amounted to Rs 2.49 crore which is 3.08% of Net profit for the year & 0.32% of net sales.
(v) Other Family Members in Business
- Wife of Mr Brahm Vasudeva, Ms Susan Vasudeva, is also on the Board as Non-Executive Director.
- Mr Neil Vasudeva, son of Mr Brahm Vasudeva, holds the position of Executive Vice President - Marketing since 1997. Earlier, he worked as Product Manager Pest Control in Reckitt & Colman of India Limited. He is 51 years old. He received remuneration of Rs. 1.40 crore for FY21.
Total managerial remuneration for FY21 amounted to Rs. 18.69 crore which is 23.14% of Net profit & 2.43% of net sales for FY20.
(E) Business Segments
(i) Pressure Cookers
Hawkins is one of the largest pressure cooker manufacturers in India and exports its products to more than 40 countries since 1974. Company manufactures its products under its own brand names – Hawkins, Futura and Miss Mary. Hawkins Ltd manufactures 88 different models of Pressure Cookers in 13 different types.
Hawkins Classic was the first range of Pressure Cookers, introduced by the company. It is also the largest selling & most popular Pressure Cooker range of Hawkins Cookers Ltd.
India Pressure Cooker Market size is projected to grow at a CAGR of 6.4% during 2021-27F. Increasing number of modular kitchens and rising disposable income in India are also the major factors contributing to the growth of the pressure cooker market.
(ii) Cookware
Company offers Cookware under its own brands name – Futura and Hawkins. Company provides cookware in 4 types -
- Futura Cookware: Includes wide range of Pots, Pans and Tavas. Futura Cookware is offered in 2 types of cooking surfaces – Hard Anodized and Nonstick.
- Hawkins Tri-Ply Stainless Steel Cookware: Hawkins launched this range of Cookware in 2019-20. The vision of the Company behind launching this range is to remove the disadvantages of sticking & burning that is faced by the Non-stick users.
- Hawkins Stainless Steel TPan: Launched in 2018-19. Ideal for making Tea, Coffee and Soup, for boiling Water and Milk, for cooking instant Noodles & for re-heating food.
- Die cast Cookware: Die-cast Technology allows for metal thickness exactly where needed, so your pan is strong and heats evenly, yet is light and easy to handle.
(iii) Accessories
This includes pressure cooker accessories namely Grids, Separator, Futura Steaming Basket, Molds, Combi set, Idli Stands etc.
(F) Cost Structure
Advertisement & Sales Promotion Cost as a % of Net Sales
(G) Financial Highlights
(For each Financial year ended 31 March)
(i) Sales Growth
Hawkins net sales grew at CAGR of 8.67% over last 10 years. In FY22 sales grew by 24.66% YoY to Rs 958.01 Cr compared to Rs 768.46 Cr in FY21.
(ii) Earnings
PAT growth for FY22 is 4% YOY. This is due to the rise in raw material prices.
(iii) Margins
Hawkins Cookers' margins as well as growth has remained strong over last 10 years. Expansion in profit margins is a strong attribute.
(iii) Free Cash Flow
(iv) Dividend Payout
Dividend payout ratio of Hawkins Cookers is consistently very high from last 10 years. For FY20, management decided not to pay dividend on account of current unclear circumstances due to Covid-19 pandemic. Thus, management decided to maintain cash.
(H) Ratios
(i) ROCE
Hawkins has the highest return on capital employed (ROCE) amongst the industry peers. The company has been able to maintain its ROCE. More cost saving efforts by the management, as highlighted in the Annual Reports, may result in expansion of return.
(I) Key Highlights from Management Discussion from last 5 years:
(i) Effective Advertising in Sales Growth
Advertisement & sales promotion expenses as a % of net sales remain as 4-5% over last 10 years.
In 2015-16, management highlighted the effectiveness of advertisement campaigns & increasing viewership amongst target audience. Thus, increased efforts in advertising is one of the reasons of sales growth. Moreover, Mr Brahm Vasudeva focused on building brand identity with campaign focused on selling the product.
In 2016-17, the company did not take a price increase. This, along with effective advertising, led to a growth in demand for pressure cookers & cookware.
(ii) Distribution Network
Hawkins Limited has a strong Distribution Network that ensures a wide reach through its Authorized Dealers who sell and stock Hawkins products. Currently, Hawkins Limited has around 700 Service Centers all across India, Nepal & Bhutan. Company also sells its products to the top Departmental Stores of Europe, Yugoslavia, Japan, Panama, Mexico, Finland, & the Netherlands.
As last specified, the company's authorized dealer count was 5,050 as on 31 March 2018.
Company has improved the distribution amongst dealer by 29%.
(iii) Market Share of Hawkins
Hawkins Limited is one of the leading manufacturers of Cookers in India. Besides cities, company widened its reach to the Rural Markets also, on account of Government’s Pradhan Mantri Ujjwala Yojana. Every year company tries to innovate its products in order to grab a good Market Share. In F.Y. 2019-20, Hawkins holds a Market Share of 30%, competing with more than 100 models of Cookers in the Market amongst both the organized & unorganized players.
Implementation of GST during FY18 was a great positive factor for organized players in consumer goods. Thus, tendency of for traders to deal in Hawkins products grew stronger.
Currently, the share of unorganized players is about 40% in the Market. It is expected that the organized brands will grow faster in coming years as compared to unorganized players. This may lead to market share gains for Hawkins.
In addition to above, the Government of India made the ISI mark compulsory for all pressure cookers sold in India from February, 2021. The company is the undisputed leader on the aspect of quality & thus expects to gain from this development.
(iv) Raw Material Prices
Fluctuation in aluminum prices is one of the major factors of impacting cost & margins.
Raw material prices are cause for concern as most items have increased sharply in the last few months due to which company has also increased their prices.
In FY18, the company took a price increase of 4.8% in Pressure Cookers & 4.2% in Cookware effective April 1, 2018 consequent to increase in input costs. Then, from April 1, 2019, the company took price increase of 2.5%.
(J) Strengths and Weaknesses
Strengths
(i) Established brand, one of the leading players in the pressure cooker segment
Incorporated in 1959, the company is one of the leading players in the pressure cooker segment with a strong brand equity in the domestic market, built over decades. The company continues to invest in brand building and for generating higher demand.
(ii) Established distribution network, with pan-India presence
The company has an established and growing pan-India distribution network, ensuring a wide reach. The same helped the company build a strong brand, supporting its revenue growth. In FY2021, the domestic market contributed 91% to the total sales with the balance contributed by exports.
Weaknesses
(i) Exposed to intense competition
The company is exposed to intense competition in the industry from other branded players, resulting in limited pricing power. Further, the company requires considerable spends on advertising and trade discounts to sustain and build market share.
(ii) Vulnerability to raw material prices
Aluminum and stainless steel are the key raw materials for the pressure cooker industry and cookware industry. The company’s profitability remains exposed to volatility in raw material prices, chiefly aluminum, prices of which have exhibited fluctuations in the past. The company’s profitability decreased to 14.4% in FY2021 compared to 15.6% in FY2020 primarily due to a sharp increase in aluminum and stainless-steel prices in H2 FY2021.
(iii) Relatively concentrated product portfolio and limited market size
The company’s product portfolio remains relatively concentrated towards the cooker and cookware segments and is vulnerable to any economic downturns. In FY2021, pressure cookers contributed around 75% to the total sales, cookware about 21% and the balance was contributed by others and spare parts sales. Further, its overall growth prospects remain constrained by the limited market size of the pressure cooker segment.
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References: Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews, Industry's Publications.
Disclaimer: The report only represents personal opinions and views of the author. No part of the report should be considered as recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.
