Company profile:
It s the second largest sanitaryware company in India (behind Hindware) in tems of marketcap and is fast growing. Currently it enjoys about 22% market share and is targeting both premium and economy sections. It has a robust distribution and retail network across the country comprising of over 500 distributors and over 5000 retailers.
Performance:
The company s production plants ran at full capacity resulting in impressive financial figures. The increasing distribution and retail network helped the company to achieve a 31.4% increase in sales, highest in the industry in FY12. This translated into 20% growth in net profit. It enjoys a healthy net profit margin of 11.3% against industry average of only 4.5%. This is partly because of the fact that this company is very low on debt and has very low interest outflow. The company has best in industry ROCE of 38% and has been a rewarding company for the shareholders both in terms of dividends and capital appreciation.
Sales have grown at a 5 year CAGR of 19.22% and net profit has grown at 5 year CAGR of 25.9%. The value of company is rising, with net current assets growing at a CAGR of 25.93%. In the latest quarter result, net profit has risen by 44.18%.
Why should you invest?
Apart from the numbers mentioned above there are other reasons to invest in this stock. Some of these are:
The business is irreplaceable- This is not a flash industry, sanitation is a necessity for mankind.
Growth in housing commercial property projects- The real estate is again picking up pace with so many new projects going underway. Sales for sanitary ware will increase as a consequence.
Sanitation industry is set to see increased growth rate within this 5 year plan. Current penetration of sanitary wellness in the country is only about 40%. Government spending is going to increase in this segment with envisaged Rs.1 trillion infra investment.
The company plans to increase its capacity by 20-25% as it has managed to run at 100% capacity in previous fiscal years.
New faucet ware unit will provide incremental revenue in yeas to come.
The company has consistently strived and achieved cost reduction, resulting in industry leading margins.
Company profile: It s the second largest sanitaryware company in India (behind Hindware) in tems of marketcap and is fast growing. Currently it enjoys about 22% market share and is targeting both premium and economy sections. It has a robust dist...
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