HNGI - Bottling India
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Printed Date: 20/Apr/2025 at 10:24pm
Topic: HNGI - Bottling India
Posted By: manish_okhade
Subject: HNGI - Bottling India
Date Posted: 31/Dec/2009 at 6:29pm
Hindusthan National Glass & Industries Ltd. looks cheal at current level and i am unable to locate any post on TED hence creating new one.HNGI is a leading bottling player of india and caters to liquer, cosmetics, FMCG etc. Find below key financials:CMP: 144
PE: 8 (TTM), 11 (FY08-09)
MCap: 1257 Cr
RoE: 13
Profit margin : 8%
Companies profit i less or more erratic on YOY basis but overall grown from mere singl digit to 3 digits in last 10 yrs in Crs. Last year due to interest cost increase profit has come down but its not cpmparable to last year. Last year there was a gain on tax so profit has inflated by 20 Crs.
Companies balance sheet is healthy with debt/equity has come down to 0.36. BV has consistantly increased to 125 to 475 in last 5 years. Stock is still quoting much below the BV. Recent 2 qtrs results are way ahead of previous 2 qtrs. MCap is lower than last years sale.
Growth drivers: Its amarket leader in bottling industry. Impetus in economy will increase the sales of Beer, FMCG, Cosmetics etc.
I don't know why this is not covered by any MF and quoting so low, Any comments?
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Replies:
Posted By: hit2710
Date Posted: 31/Dec/2009 at 7:34pm
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The stock was split somewhere in Nov09 and currently it is a Re 2 face value and hence book value will reduce to that extent.
last two quarters have been extremely good with H1 fy10 profits at 97 crores compared to 107 crores for whole march 09. Debt has increased in March 09 to 510 crores from 410 crores a year earlier. They paid a dividend of rs 5 on fv of 10 in march 09. They seem to have good operating cash flows but net cash flows is low because funds are used in investing activity. Overall looks a good stock. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: hit2710
Date Posted: 31/Dec/2009 at 7:47pm
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The company seems to have reduced/renegotiated debt because in first half there seems to be interest payment of 10 crores as compared to 16 crores in half year ending sep08.
Directors have highlighted the risk of replacement of their product with pet bottles in their report. Dont know how significant a threat that could be. Their loss could be a gain for companies like manjushree. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: manish_okhade
Date Posted: 31/Dec/2009 at 10:27am
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Hi Hit2710,
Overall what do you feel? Looks like safe bet at compelling evaluation considering bottling business will continue to thrive due to doemstic consumption, whats your say?
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Posted By: hit2710
Date Posted: 31/Dec/2009 at 10:39am
Hi, Valuation wise looks cheap to me.appears low risk. Prospects wise, I dont know too much about it. What are the user industries for its bottles? Is it similar to haldyn glass/HSIL glass business? Hitesh. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: manish_okhade
Date Posted: 31/Dec/2009 at 10:43am
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Closest is Asahi glass (Mcap -1K Cr) which is in a loss. Other players are borosil etc but they are small players with very less MCap. Looks like HNGI is a mkt leader. I am getting really serious on this scrip now :-). |
Posted By: hit2710
Date Posted: 31/Dec/2009 at 10:53am
I think vivek was tracking this one. On the face of it looks something to be worth investing. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: hit2710
Date Posted: 31/Dec/2009 at 11:10am
Hi Manish, I will go through this one's annual report and will be able to come out with more details by tonight. The AR is very impressive at first look. regards, Hitesh. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: manish_okhade
Date Posted: 31/Dec/2009 at 11:13am
| Thnx Hitesh, looking forward to more intelligent discussion before locking the money. |
Posted By: hit2710
Date Posted: 31/Dec/2009 at 11:15am
Hi, You can reciprocate with your views on JOCIL. Please go through it and let me have your viewpoint. Hitesh. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: hit2710
Date Posted: 01/Jan/2010 at 12:41pm
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HERE IS SOME MORE DETAILS OF THIS COMPANY.
CUSTOMERS: Hindustan Unilever, GlaxoSmithKline, Nestle, Koeleman, Global Green, Heinz and Dabur (foods); Pfizer, Cipla, GlaxoSmithKline, Reckitt Benckiser, Ranbaxy and Himalaya (pharmaceuticals); United Breweries, SABMiller, Asia Pacific Breweries and South Asia Breweries (beer); United Spirits, Pernod Ricard, Diageo, Radico and Bacardi (liquor) and Coca Cola and Pepsi (soft drinks). For the year 2008, there was a tax write back of around 39 crores and for fy09 there was increased cost of interest to the tune of 20 crores and these together have contributed to decline in profits from 160 crores in 08 to 107 crores in 09 inspite of sales increasing from 1148 crores(08) to 1438 crores.(09) PROMOTER HOLDING IS 74% -- NO PLEDGING. A Mr Dilip Damle holds 20% stake. No MF/FII holding. MARKET CAP 1257 CRORES FINANCIALS YEAR 05 06 07 08 09 H1FY10 SALES 470 474 596 1148 1324 632 NET PROFIT 31 24 33 160 107 97 EQUITY CAPITAL IS 17.47 CRORES AND THERE ARE AROUND 8.735 CRORE OUTSTANDING SHARES OF RS 2 EACH. IN LAST FEW QUARTERS THERE HAS NOT BEEN ANY SCORCHING GROWTH BUT THE COMPANY IS CHUGGING ALONG AND BASED ON GROWING DEMAND FROM BEVERAGES, FMCG AND PHARMA COMPANIES, THERE WOULD BE SUSTAINED GROWTH. TECHNICALS THE STOCK MADE ITS ALL TIME HIGH OF 360 IN JAN 08 AND FELL DOWN TO FORM A BOTTOM OF 45 IN OCT 08 AND THEN RALLIED TO POST A HIGH OF 148 IN MAY08, THEN FELL TO A LOW OF 90 AND SINCE MAY HAS BEEN IN AN UPWARD SLOPING TRIANGLE FORMATION. THE DOWNSIDE SUPPORT COMES IN THE RANGE OF 130-135 LEVELS. THE BREAKOUT FROM THIS TRIANGLE IS AT AROUND 155 LEVELS AND ONCE THIS HAPPENS THERE COULD BE SHARP UPMOVE. TO ME THIS ONE LOOKS LIKE A LOW RISK MODERATE RETURN KIND OF STOCK. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: manish_okhade
Date Posted: 01/Jan/2010 at 3:03pm
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Thnx Hitesh.
Let me know if something wrong below:
FV is reduced by 1/5 so no of shares would be 8.735 Cr. This gives HY FY09-10 PE of 12.86 and if assuming that next 2 qtrs will give NP of approx 50 Cr then FY10 PE will be 8.5 at CMP of 144.
Now i checked with Moneycontrol charts that following is a historic PE
If my above reading is correct then mkt seems to did not pay such high PE of 8 in the past so doeas it mean its still expensive?
EPS is on pg 11 of AR and prise is gathered from Moneycontrol .
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Posted By: hit2710
Date Posted: 01/Jan/2010 at 5:40pm
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There is something wrong about the data from moneycontrol. Maybe something to do with split of the stock. I think earnings are on 10 rs FV stock and pe could have been calculated on basis of price of a Re 1 Fv stock (considering it to be 10Rs stock value)
Otherwise it does not make any sense. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: manish_okhade
Date Posted: 01/Jan/2010 at 6:04pm
Above is a typo, its split for FV of Rs 2/-?
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Posted By: hit2710
Date Posted: 01/Jan/2010 at 6:53pm
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Religareonline people seem to be more accurate than moneycontrol.
Here is eps for particular years adjusted on face value of Rs2 05 06 07 08 09 eps 5.7 4.3 6 18 12 price 14-44 44-94 87-255 45-360 82-154 The price indicated is high low in that particular year. For practical purposes consider 05 as the year 04-05 and so on for the high low data. So you can calculate the pe range for the data provided and as can be seen it is all over the place and I feel it is stastically not too significant or consistent. Currently it seems to be a good level to buy. Biggest problem with this company seems to be the lumpiness of earnings from quarter to quarter and on year to year. But looking at the price range for each year, if you get in at the correct price, there is almost 50% to be made each year.  ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: manish_okhade
Date Posted: 01/Jan/2010 at 8:55pm
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Hitesh,
Nice analysis!
Just thinking that even if i have entered at higher prise of 44 in FY05 still i would be in 100% profit in FY09 at lower band of prise of 82. I am doubling the money as a very bad investor in 4 years :-).
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Posted By: excel_monkey
Date Posted: 02/Jan/2010 at 12:29pm
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Sanjay Somany arrested for stealing blackberry at airport
http://timesofindia.indiatimes.com/city/delhi/Industrialist-arrested-for-stealing-blackberry-at-airport/articleshow/5193201.cms NEW DELHI: A prominent industrialist of a Rs 1000 crore company was arrested at the airport here for allegedly stealing a high-end mobile phone of a passenger after CCTV visuals indicated that he took it, police said on Tuesday. Sanjay Somany (51), the Managing Director of Hindustan National Glass and Industries Limited, was caught last evening at the airport when he returned from Chennai, Deputy Commissioner of Police (IGI Airport) K C Trivedi said. "He was produced before a magistrate who granted him bail," Trivedi said. The arrest came following probe into the complaint by one N K Puri, who claimed early on Monday morning that his blackberry phone had been stolen from inside the airport premises just before he boarded his Mumbai bound flight. Soon after the complaint was received airport authorities checked the CCTV footage which showed a person wearing a blue attire picking up a phone during the security check process at the airport. It was also ascertained that the accused, later identified as Somany, boarded a Chennai bound flight. His his presence on the aircraft was confirmed by co-passengers and flight crew, the official said. Somany was caught by CISF officials on his return to Delhi in the evening after a passenger on the return flight told officials about his presence. On being confronted he said he had kept the phone in the toilet of the aircraft, the official said. |
Posted By: manish_okhade
Date Posted: 02/Jan/2010 at 8:35am
| Wow! It emans one should be careful with HNGI? |
Posted By: hit2710
Date Posted: 03/Jan/2010 at 5:40pm
I think this news was discussed in some other thread probably HSIL thread and I feel this factor may not affect the company's prospects materially and I think the decision to buy/hold/sell should be based on fundamentals. The news mentioned is almost two three months old. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: Chetan Panchal
Date Posted: 04/Jan/2010 at 12:11pm
| Whats reason scrip up by 18%? |
Posted By: manish_okhade
Date Posted: 04/Jan/2010 at 12:22pm
Seems to be a block deal, well i am happy with my stock picking :-).
All my identified stocks are doing well from the day of recommendations (eClerx, Ahaluwalia Contract, SPICE Aireline).
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Posted By: prabhakarkudva
Date Posted: 04/Jan/2010 at 1:36pm
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i feel one should be a little careful with these mediocre businesses especially when their price is rising.It takes a 900% jump to get from 100 to 1000 but just a 90% fall to get back to 100.Its a cliche but worth remembering.
I think what we need to focus on is how sustainable is the current valuation.All it takes is a person with some cash to drive prices higher but the real question is will the market respect that person's judgement over a period of time. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: manish_okhade
Date Posted: 04/Jan/2010 at 1:42pm
You are 100% correct. Just let me know still you feel why its overvalues or having any fundamental problem. HNG is a mkt leader in its industry and almost no siginificant competition is there. Why itsundervalued is already discussed in the beginning of the thread.
Its not a challenge of any type, just would like to know if you see anything wrong. Thats the purpose of this forum.
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Posted By: prabhakarkudva
Date Posted: 04/Jan/2010 at 1:53pm
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No offence taken manishji
I dont know much about this business and my comment was generally referring to some small caps that run up very fast but then it doesnt take them long to fall back to the original levels. All i know is that this packaging business is a low return(ROE or ROIC) business with no significant moats hence growth needs to come in from debt going forward which can get dangerous if some problem suddenly crops up and your order inflow is reduced.I gave Manjushree technopack a pass and every since its up 20% or more.But i feel safe investing 25% of my portfolio in a quality business,thats it. I dont know the specifics of HNGI and hence it would not be fair for me to comment on it in particular. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: hit2710
Date Posted: 04/Jan/2010 at 2:34pm
I feel that currently while the overall markets are not going up significantly, there seems to be a heavy dose of rerating going on in stocks which were quoting at pe of less than 5-8 because the large caps are perceived to be fairly valued. Regarding the differentiation and fates of small caps, I think companies need to be looked on their merits on basis of fundamentals rather than classifying them into large caps and small caps and so on. At one point of time unitech, suzlon, hfcl, pentamedia etc were all large caps or close to large caps and look at the fall they had. It happened because of poor fundamentals. Punj Lloyd still may be a large cap but people are not too attracted to it. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: manish_okhade
Date Posted: 04/Jan/2010 at 2:38pm
True, huge money can only be made by choosing small/mid caps only. Trick is to identfiy tomorrow's large cap but its definitly risky.
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Posted By: prabhakarkudva
Date Posted: 04/Jan/2010 at 3:00pm
Hit ji, That is exactly my point.Unitech, suzlon, hfcl, pentamedia were also small caps at one time.But bad management/bad businesses brought them from the very top to rock bottom.We should not fall in to the same trap again in small caps that we dont understand much about.Of course if one has done the research and is satisfied there should be no problems but just looking at EPS growth and not looking at how the growth is coming in might lead to problems later.That is my only concern. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: smartcat
Date Posted: 04/Jan/2010 at 4:24pm
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HSIL is better investment than HNG at the current market prices. A pure bottle making company like HNG should ideally be bought at a P/E of around 5 - not 10.
HSIL is a different - one can pay 10 P/E for it. Because 50% of its revenues come from glass bottles while other 50% come from branded business (bathroom fittings).
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Posted By: sumit_sultania
Date Posted: 04/Jan/2010 at 5:33pm
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http://www.business-standard.com/india/news/hng-setsrs-550-crore-float-glass-unit-in-state/378148/ |
Posted By: manish_okhade
Date Posted: 04/Jan/2010 at 6:05pm
Can you also check the Apar industries posting on TED. ITs also look like a gem to me.
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Posted By: lokeshmr
Date Posted: 16/Apr/2010 at 4:26am
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Good discussion on HNG. In my openion the reason for high PE its commanding is low floating stock. It has barely 4% floating stock. Promoters hold 74.16% and out of the public shareholding 2 peopld hold 22.15% rest i.e 3.69% is owned by true public. Check BSE for the shareholding pattern.
I'm not sure who Dilip Damle is and what's his relationship with the promoters.
Company is fundamentally good and has moderate growth prospects.
Could be a candidate for de-listing.
Any thoughts?
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