Analyst Meet / AGM     21-Feb-19
Conference Call
Hindustan Sanitaryware & Industries (HSIL)
Expects revenue growth of ~10% in Building Products, 15% in Faucet segment
The company has conducted a conference call on 5th February 2019 to discuss the financial performance for the third quarter ended December 2018 and way forward. Management team of the Company addressed the conference call.

Key highlights

  • The Company has posted 64% jump in net profit to Rs 25.50 crore on the back of 27% gain in income from operation to Rs 735.72 crore for the third quarter ended December 2018. The consumer business division of the company grew 55 per cent year-on-year (Y-o-Y) in the quarter and the packaging business saw strong growth in revenue of 30 per cent year-on-year.
  • The Company solid sales gains, along with cost efficiencies generated profit for this quarter. The Company substantial investment in businesses outside of bathware space yielding results, and this is visible from Company initial success of plastic pipes and fittings business and profitability of consumer business.
  • The Company installed capacity for sanitaryware (2mn pieces per annum) and faucets (~2.5mn pieces per annum), pipes and fittings (14000TPA). The Company expects ~10% revenue growth in the Building Products segment in FY20. Faucet segment revenue expected to grow at a CAGR of 15% over the last 3-4 years. Average operating margin of this segment is expected to be at 16-17% (20-21% for Sanitaryware and 12-14% for faucets).
  • The Company Pipes segment, which got commissioned in Mar-18, revenue expected to reach to Rs 300-350 crore in next two years. In the Consumers segment, the target is to reach Rs500 crore revenues in FY20E against Rs 210 crore in FY18 (Rs220 crore in M9FY19, growth of 45.7% yoy). The gross margin of the consumers segment is above 35%.
  • The Company packing segment margin has improved post refurbishment of the furnace and re-building of the generator. Utilization rate in packaging segment is at 85-90% against industry average utilization of 65-70%. The Company has hiked Rs 2-3 in this segment and average realization was up 15% in Q3FY19. Realization is further expected to improve by 2-3% in Q4FY19. The Company expects OPM to be 16% going forward for this segment. In Caps and Closures, the capacity will be expanded to 1bn from 600mn.
  • The Company net debt stands at Rs1191 crore vs. Rs990 crore at FY18-end. Average cost of borrowing is 7.43%.
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