In this edition, we have reviewed Hester Biosciences Ltd. and Havells India Ltd. We suggest our reader-investors to HOLD in Hester Biosciences Ltd. and Havells India Ltd.
We had recommended Hester Biosciences Ltd. in Volume 36, Issue No. 10, dated March 30, 2021 to April 12, 2021, under the ‘Analysis’ segment.The recommended price for the stock was Rs2,013.05. We had recommended the stock on the basis of positive indications regarding the growth of the company’s business through its expansion plans and its efforts towards providing best quality services for animal healthcare. Hester Biosciences is one of India’s leading animal healthcare companies and the second-largest poultry vaccine manufacturer in the country.
The financial performance of the company reveals that on a consolidated quarterly basis the net sales and other operating income was recorded at Rs60.19 crore in Q1FY22 as compared to Rs39.85 crore in Q1FY21, giving a rise of 51.02 per cent. The operating profited ascended by 54.16 per cent from Rs12.60 crore in Q1FY21 to Rs19.42 crore in Q1FY22. The net profit for the quarter registered a strong growth at Rs11.02 crore in Q1FY22 as compared to net profit of Rs5.05 crore in Q1FY21. On the annual front the net sales and operating income improved by 16.95 per cent from Rs183.27 crore in FY20 to Rs214.33 crore in FY21.
The operating profit of Rs61.77 crore of FY20 grew by 18.74 per cent to reach operating profit of Rs73.34 crore in FY21. FY21 reported a net profit of Rs34.7 crore in comparison to net profit of Rs31 crore reported in FY20. The company achieved an improved operational and financial performance in Q1FY22 as compared to the corresponding quarter of FY21. The EBITDA margin was reported at 31.02 per cent and the net profit margin at 20.92 per cent in Q1FY22. The market and economic recovery have augured well for the growth of the poultry and animal industry. The company is constantly investing in geographical market expansion and marketing manpower to achieve the budgeted top-line. Hence, we recommend HOLD.
We had recommended Havells India Ltd. in Volume 36, Issue No. 10, dated March 30, 2021 to April 12, 2021, under the ‘Choice Scrip’ segment. The recommended price for the stock was Rs1,058.10. We had recommended the stock on the basis of an optimistic growth outlook for the company. Havells India is a leading fast moving electrical goods (FMEG) company and a major power distribution equipment manufacturer with a strong global presence.
The financial performance of the company indicates that on a consolidated quarterly basis the net sales and other operating income was recorded at Rs 2,598.20 crore in Q1FY22 as compared to Rs1,479.12 crore in Q1FY21, giving a significant rise of 75.66 per cent. The operating profit was reported to be Rs163.07 crore in Q1FY21 as compared to Rs387.30 crore in Q1FY22. The net profit for the quarter jumped robustly and registered at Rs234.30 crore in Q1FY22 as compared to net profit of Rs63.34 crore in Q1FY21. On the annual front the net sales and operating income improved by 10.77 per cent from Rs9,440.26 crore in FY20 to Rs10,457.30 crore in FY21.
The operating profit of Rs1,142.06 crore of FY20 rose 54.03 per cent, standing at Rs1,759.14 crore in FY21. FY21 reported a net profit of Rs1,044.31 crore, which ascended by 42.02 per cent from Rs735.35 crore recorded in FY20.
Recently, the company has launched a new series of kitchen appliances branded ‘Hexo’, including eight new products ranging from three juicer mixer grinders, two mixer grinders and three blenders. Positioned as ‘Bold, Strong and Tough’, the new range aims at a blend of performance, convenience and style. The continuous rise in sales of fans as a household necessity and the premiumisation theme has driven growth for consumer durables companies like Havells India." before the last line beginning Owing to sustaining growth momentum, healthy underlying demand driven by housing activities, share gains and revival in B2B business, we recommend HOLD.
(Closing price as of Oct 14, 2021)