Stock Synopsis: Hanung Toys & Textiles

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Hanung Toys & Textiles

Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=2292
Printed Date: 21/Apr/2025 at 6:23pm

Topic: Hanung Toys & Textiles

Posted By: SingleMalt
Subject: Hanung Toys & Textiles
Date Posted: 13/Aug/2009 at 12:20pm

Hanung Toys and Textiles Limited ( http://www.hanung.com/main.asp - http://www.hanung.com/main.asp )

(CMP: 72; MCAP: 183 cr; P/E: 2.6; Return on Avg. Equity ~25%)

HTTL engages in the manufacture, supply, and export of stuffed toys and home furnishings in India and internationally.

Toys: Soft toys made with acrylic/polyester fabric and stuffed with polyester staple fiber; holds license for Walt Disney characters for soft toys in India. It offers stuffed toys under Play-n-Pets and Muskan brands.

Textiles: Home furnishings that comprise curtains, sheet sets, duvet covers, comforters, throws, rugs, bolsters, pillows, cushions, sleeping bags, and bean bags. It offers home furnishings under Splash brands.

The company sells its products through distributors, retail stores, and importer/wholesale customers. It exports its products primarily to Europe, the United States, Latin America, and the Middle East. The company was formerly known as Hanung Toys (India) Limited and changed its name to Hanung Toys and Textiles Limited in January 2006.

Annual results in brief

	Mar ' 09	Mar ' 08	Mar ' 07	Mar ' 06
Sales	637.6	490.68	275.09	146.68
Operating profit	102.58	78.05	47.73	22.84
Interest	33.01	13.62	9.53	5.36
Gross profit	85.07	80.81	44.22	20.91
EPS (Rs)	26.3	24.18	11.04	8.25

From the company website:

IKEA, has certified us as I-WAY and 4-SIP vendor.

Target Group, USA has audited our facilities and we are their approved vendors.

Wal-mart has audited and certified our factory, making us their approved vendor.

JC Penny, USA audited and certified our factory, making us their approved vendor.

CHF Industries, USA takes shipments from us under our self-quality assurance.

The Metro Group of Germany has awarded us their 'Approved Manufacturing Practice Certificate'.

Lillian Vernon Corporation of USA has issued us their 'Certificate of Appreciation'.

I believe HTTL started off initially with an order from IKEA. It still sells its textiles through the IKEA stores. However, not sure of the scale and regularity of these orders. If I am not mistaken, it is also in collaboration with a South Korean company (Hanung apparently means 'stem of a tree' in Korean).

Has anyone else been following this company? Look forward to your comments.

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If only I knew then what I know now...

Replies:

Posted By: subu76
Date Posted: 13/Aug/2009 at 4:29am

Yup...this is one of the cheapest stock out there...

Any idea if the debt load is crushing for this company?

Also, i did not come across any management interviews....Have you seen any lately?

Posted By: chimak10
Date Posted: 14/Aug/2009 at 2:49pm

This one was sandeep sabharwal's fav stock

Posted By: neerajlulla
Date Posted: 14/Aug/2009 at 5:58pm

WHEN WE CAN BUY THIS SHARE?

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buy and forget for long term

Posted By: SingleMalt
Date Posted: 14/Aug/2009 at 6:56pm

Originally posted by subu76

Any idea if the debt load is crushing for this company?

Also, i did not come across any management interviews....Have you seen any lately?

Their debt is a little worrisome.. but perhaps not too out-of-the-ordinary for a small cap growth company? Anyway, I havent been convinced enough to pull the trigger yet. Might just take a small position within the next month or so and continue to monitor..

There was a write-up in the papers last year about their facility.. cant seem to find it now. This was the only other article I could locate..

http://in.reuters.com/article/domesticNews/idINBMB00307920080915 - http://in.reuters.com/article/domesticNews/idINBMB00307920080915

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If only I knew then what I know now...

Posted By: gbhupesh
Date Posted: 14/Aug/2009 at 7:30pm

One of my friend who works in HR function, in Roorkee plant of Everest Industries Ltd (Hanung' new plant is opposite to Everest Industries in Roorkee) did not had good impression of company' Management.

On worker relation, tax evasion .. etc etc ..

It is subjective if it is investment worthy company or not on the basis of above statement .. but I did cut half of my position in this company recently.

Posted By: subu76
Date Posted: 14/Aug/2009 at 9:36pm

Thanks for sharing this insight.

Posted By: TCSer
Date Posted: 14/Aug/2009 at 11:31pm

Originally posted by gbhupesh

One of my friend who works in HR function, in Roorkee plant of Everest Industries Ltd (Hanung' new plant is opposite to Everest Industries in Roorkee) did not had good impression of company' Management.

On worker relation, tax evasion .. etc etc ..

It is subjective if it is investment worthy company or not on the basis of above statement .. but I did cut half of my position in this company recently.

Hanung is a typical Lala company whose promoter heavily plays into shares n takes the help of Operatirs like sandip sabharwal.Have visited the company.Investment to be avoided.

Posted By: subu76
Date Posted: 14/Aug/2009 at 11:55pm

As Basant Ji mentioned sometime ago...such a company would not be able to resist the temptation to pick up huge debts during good times......

Posted By: chimak10
Date Posted: 14/Aug/2009 at 12:12pm

Originally posted by TCSer

Have visited the company.Investment to be avoided.

Details please?? Like what did u see.....that made u to avoid this company

Posted By: valuepicks
Date Posted: 19/Aug/2009 at 5:06pm

gbhupesh & TCSer,

Even I am curious to know more about this company, as I plan to invest in Hanung. Please share more details about their worker relationship and tax evasion.

The CEO is from a financial background and such profiles are known to create financial maze to evade taxes. However, they have been reporting decent growth with most financial parameters being satisfactory.

Moreover, their client base is impressive and the idea to license famous cartoon characters is commendable.

Posted By: tjjeykumar
Date Posted: 02/Sep/2009 at 11:33am

thk u
can we buy this stock or not.

Posted By: amol.karale
Date Posted: 27/Oct/2009 at 8:45am

Company has debt of around 380 Cr. at the end of FY09 & they just secured nod from its shareholders for raising funds up to $50 million (about Rs 238 crore) through the issue of securities. Stock is no longer cheap, assuming that it will have debt of around 600 cr in it's balance sheet.

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Amol

Posted By: venkat
Date Posted: 27/Oct/2009 at 8:54am

Originally posted by amol.karale

Company has debt of around 380 Cr. at the end of FY09 & they just secured nod from its shareholders for raising funds up to $50 million (about Rs 238 crore) through the issue of securities. Stock is no longer cheap, assuming that it will have debt of around 600 cr in it's balance sheet.

One would second that! Order book of 800 crores is just 1 year and 3 months of revenues. Sure Orders for Toys would be for the year ahead but Textiles can surely have 2-3 years of order backlog.

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Life is always a fight....to finish at the start line.
Problem-Use challenge, Tension-Use excitement,Ican't-Use i can,avoid no at the beginning of sentence.

Posted By: respondvignesh
Date Posted: 09/Jun/2011 at 1:29pm

hanung at 52 week low now. Trading below its book value at a PE of 3.5. Is it the right time to enter this stock??

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