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7/31/2019 First Call- Haldyn Glass Gujarat Ltd Detailed Report
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SYNOPSIS
We initiated coverage of HALDYN
GLASS GUJARAT Ltd and set a
target price of Rs.18.00 for Medium
term investment.
HALDYN GLASS GUJARAT LTD
manufactures a very wide variety of
glass bottles and containers of
different sizes and volume.
During the quarter ended, the Net
profit of the company increased to
Rs.80.95 millions and registering a
growth of 191.50%.
The company has recommended a
Dividend of Rs. 0.75 per equity
Share of Re. 1 each (75%) for the
year ended March 31, 2012.Net Sales and PAT of the company
are expected to grow at a CAGR of
13% and 29% over 2011 to 2014E
respectively.
YearsNet sales(Rs.Mn)
EBITDA(Rs.Mn)
Net Profit(Rs.Mn)
EPS(Rs.) P/E
FY 12 1769.19 456.77 242.55 4.51 3.53
FY 13E 2034.57 529.21 291.88 5.43 2.94
FY 14E 2278.72 599.54 336.58 6.26 2.55
Stock Data:
Sector: Containers& Packaging
Face Value Rs. 1.00
52 wk. High/Low (Rs.) 17.50/10.02
Volume (2 wk. Avg.) 99448.00
BSE Code 515147
Market Cap (Rs.In mn) 857.31
Share Holding Pattern
1 Year Comparative Graph
BSE SENSEX HADYN GLASS GUJARAT
C.M.P: Rs. 15.95Target Price: Rs. 18.00Date: June 14th, 2012 BUY
HALDYN GLASS GUJARAT LTD
Result Update: Q4 FY 12
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Peer Group Comparison
Name of the company CMP(Rs.)Market Cap.
(Rs.Mn.) EPS(Rs.) P/E(x) P/Bv(x) Dividend (%
Haldyn Glass Gujarat 15.95 857.31 4.51 3.53 1.10 25.00
Piramal Glass 105.10 8504.30 9.67 10.87 1.65 35.00
La Opala RG 106.20 1125.50 11.89 8.93 1.94 15.00
Uflex 102.30 7423.30 19.87 5.17 0.57 75.00
Investment Highlights
Q4 FY12 Results Update
Haldyn Glass Gujarat Ltd disclosed a phenomenon rise in standalone net profit
for the quarter ended March 2012. During the quarter, the profit of the company
surged 191.50% to Rs 80.95 million from Rs 27.77 million in the same quarter
previous year. Net sales for the quarter rose 24.66% to Rs 510.36 million from Rs
409.41 million, when compared with the prior year period. It reported earnings of
Rs 1.51 a share during the quarter, registering 191.50% increase over previous
year period.
Quarterly Results - standalone (Rs in mn)
As At Mar-12 Mar-11 %change
Net sales 510.36 409.41 24.66%
PAT 80.95 27.77 191.50%
Basic EPS 1.51 0.52 191.50%
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Break up of Expenditure
Recommends Dividend
Haldyn Glass Ltd has recommended a Dividend of Rs. 0.75 per equity Share of Re.
1 each (75%) for the year ended March 31, 2012.
Company Profile
Haldyn Glass Gujarat Limited (H.G.G.L) incorporated in 1991, promoted by Haldyn
Glass Limited in the state of Gujarat, India. Haldyn Glass Limited is a closely held
company engaged in manufacture of Soda Lime Flint & Amber Glass containers since
1964. The company creates new design and shapes of bottles to give cutting-edge
advantage to the products of our esteemed clients of food, pharmaceutical, beverages
and liquor industries. Company try to produce most sophisticated and ahead of times
designs to suit the quality standard of its clients.
HGGL a listed company at Mumbai Stock Exchange, currently has total melting
capacity 320 tons per day. The two Glass Melting Furnaces capable of producing (220
+ 100) tons per day on 10 I.S. machines give them leverage over the competition in
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manufacturing a wider range of containers from 10 ml to 1000 ml. The I.S. machines
installed at the modern plant are capable of producing 1.5 million high quality
containers every day to their discerning customers which are supplied at a very short
lead time.
Containers manufactured by the company go through various stages of stringent
quality tests.The Company is re-accredited for Quality Management System ISO 9001:
2008 certification and for Environment Management System ISO 14001: 2004
certification.
Products
VialsPharmaceutical industry use these Clear glass Vials of various shapes and sizes
to package injectibles, eye-drops, ear-drops and other life saving drugs.
LiquorLiquor manufacturing industry use these bottles with capacities ranging from
60ml to 1000 ml in various shapes and sizes for packaging Whisky, Gin,
Brandy, Vodka and other liquor products. Industry uses these bottles with
capacities ranging from 60ml to 1000ml in various shapes.
Cosmetics
Cosmetics industry uses these clear bottles for packaging products like nail-
polish, perfumes, hair oil and toiletries that look vibrant in different colours.
Industry uses these bottles with capacities ranging from 60ml to 1000ml in
various shapes.
Food and Beverages
Food and Beverages industry uses these bottles to package consumableproducts. The clear transparency of the Bottles gives shelf appeal to the
products. Industry uses these bottles with capacities ranging from 60ml to
1000ml in various shapes.
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Clients
Local clients United Spirits Limited Pernod Ricard Tilaknagar Industries Amul Bajaj Consumer Care Champagne Indage
Fosbel Sarabhai Zydus Denischem Khemani Distilleries Shiva Distilleries Empee Distileries
Export (International) Mohd Ali - Yemen
Dabur - Dubai Bentos Pharma - Nigeria Saga Concept - Beirut Al-Maya Dubai Weikfield International Dubai
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Financials Results
12 Months Ended Profit & Loss Account (Standalone)
Value(Rs.in.mn) FY11 FY12 FY13E FY14E
Description 12m 12m 12m 12m
Net Sales 1563.04 1769.19 2034.57 2278.72
Other Income 0.12 0.20 0.22 0.24
Total Income 1563.16 1769.39 2034.79 2278.96
Expenditure -1221.20 -1312.62 -1505.58 -1679.41
Operating Profit 341.96 456.77 529.21 599.54
Interest -46.53 -36.34 -32.71 -34.34
Gross profit 295.43 420.43 496.50 565.20
Depreciation -98.62 -82.27 -88.85 -97.74
Profit Before Tax 196.81 338.16 407.65 467.47
Tax -38.30 -95.61 -115.77 -130.89
Profit After Tax 158.51 242.55 291.88 336.58
Equity capital 53.75 53.75 53.75 53.75
Reserves 528.02 723.72 1015.60 1352.17
Face value 1.00 1.00 1.00 1.00
EPS 2.95 4.51 5.43 6.26
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Quarterly Ended Profit & Loss Account (Standalone)
Value(Rs.in.mn) 30-Sep-11 31-Dec-11 31-Mar-12 30-Jun-12E
Description 3m 3m 3m 3m
Net sales 415.28 463.22 510.36 525.67
Other income 0.00 0.00 0.11 0.00
Total Income 415.28 463.22 510.47 525.67
Expenditure -317.27 -342.87 -370.14 -392.15
Operating profit 98.01 120.35 140.33 133.52
Interest -9.60 -8.32 -6.86 -7.20
Gross profit 88.41 112.03 133.47 126.32
Depreciation -20.94 -20.63 -20.24 -21.25
Profit Before Tax 67.47 91.40 113.23 105.07
Tax -16.58 -29.53 -32.28 -29.63
Profit After Tax 50.89 61.87 80.95 75.44
Equity capital 53.75 53.75 53.75 53.75
Face value 1.00 1.00 1.00 1.00
EPS 0.95 1.15 1.51 1.40
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Key Ratios
Particulars FY11 FY12 FY13E FY14E
No. of Shares(in mn) 53.75 53.75 53.75 53.75
EBITDA Margin (%) 21.88% 25.82% 26.01% 26.31%
PBT Margin (%) 12.59% 19.11% 20.04% 20.51%
PAT Margin (%) 10.14% 13.71% 14.35% 14.77%
P/E Ratio (x) 5.41 3.53 2.94 2.55
ROE (%) 27.25% 31.20% 27.29% 23.94%
ROCE (%) 48.14% 47.81% 43.01% 38.91%
Debt Equity Ratio 0.57 0.45 0.34 0.27
EV/EBITDA (x) 2.51 1.88 1.62 1.43
Book Value (Rs.) 10.82 14.46 19.89 26.16
P/BV 1.47 1.10 0.80 0.61
Charts:
Net Profit & PAT
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P/E Ratio (X)
Debt Equity Ratio
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EV/EBITDA(X)
P/BV Ratio
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Outlook and Conclusion
At the current market price of Rs.15.25, the stock is trading at 2.94 x FY13E
and 2.55 x FY14E respectively.
Earning per share (EPS) of the company for the earnings for FY13E and FY14E
is seen at Rs.5.43 and Rs.6.26 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 13% and
29% over 2011 to 2014E respectively.
On the basis of EV/EBITDA, the stock trades at 1.62 x for FY13E and 1.43 x for
FY14E.
Price to Book Value of the stock is expected to be at 0.80 x and 0.61 x
respectively for FY13E and FY14E.
We expect that the company will keep its growth story in the coming quarters
also. We recommend BUY in this particular scrip with a target price of
Rs.18.00 for Medium to Long term investment.
Industry Overview
Indian glass packaging industry is poised to grow at 12 - 15% compounded annual
growth rate [CAGR]. It is buoyant due to the growth shown by its user industries
especially the liquor sector, which is projected to sustain 12% CAGR on account of
changing lifestyles and rise in disposable incomes. 65% of the Indian demand for glass
bottles arises from Southern & Western Indian regions. The Indian Pharmaceutical
domestic market is currently growing at CAGR of 12 - 15%. The retail food sector in
India is expected to double by 2025 on account of a growing health consciousness
resulting in the increased use of glass packaging. In India, 10-12% of all food and
beverages are packed in glass containers as against 40-50% in developed economics.
Beverages and processed food industries are expected to have 14-15% CAGR. The
demand for Glass Containers is expected to increase driven by growing consumer
awareness about health and hygiene and eco friendly products.
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The global glass packaging industry is about $30 bn in size and out of this $28 bn is
the moulded glass industry. It can be further divided into Cosmetics and Perfumery
(8.2%), Pharma (7.1%) and Specialty F&B (4.6%). Balance 80% is Food and Beverages.
PGL is present in the niche high value added flacconage segment and thus it has an
addressable market of 20% of the total market size. The Indian glass industry is
pegged at $2.7 billion. Glass consumption growth is expected in construction (9 per
cent), automotive (19 per cent), consumer goods (10-12 per cent) and pharmaceuticals
(12-15 per cent) sectors.
As per industry sources, the Indian packaging industry was valued at around $14 bn
in the year 2009 and it registered a growth rate of more than 15% annually in the last
few years. Within the packaging industry, glass containers occupy an important
position with a share of ~9%. Despite the development of other packaging alternatives,
glass, being chemically inert and transparent, is most suitable for liquor,
pharmaceutical, life-saving drugs and food articles.
The market for glass containers in India has been growing at more than 10% during
the last few years. Despite this growth, Indias per capita consumption of glass
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over the next 12-18 months. For this, it would set up a new plant at Naidupeta in
Andhra Pradesh and expand capacity of its Nasik plant.
City-based AGI Glaspac will also invest Rs 600 crore to double its capacity at its
Bhongir plant here to 900 tpd by January 2012, company president Arun Kumar
Dukkipati said.
The per capita glass consumption in India is 1.2 kg, compared with 8-9 kg in
developed countries and 30-35 kg in the US.
The flat glass market, at present, stands at 4,500 tpd and is growing at 16 per cent
year-on-year while the container glass is at 7,000 tpd and contributes 55-60 per cent
to the overall glass market. Other glass (lighting, bangles, and beads) market is at
1,500 tpd.
Around 1.3 pounds waste is generated per person per day in India, whereas it is 4.6
pounds in the US. The glass recycling was very high in developed countries at 70-80
per cent. In Denmark, 98 per cent of bottles are refillable and 98 per cent of those are
returned to consumers. However, in India, only 40-45 per cent of the finished
products come for recycling and the rest goes for land filing.
________________ ____ _________________________
Disclaimer:
This document prepared by our research analysts does not constitute an offer or solicitationfor the purchase or sale of any financial instrument or as an official confirmation of anytransaction. The information contained herein is from publicly available data or other
sources believed to be reliable but do not represent that it is accurate or complete and it
should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of itsaffiliates shall not be in any way responsible for any loss or damage that may arise to any
person from any inadvertent error in the information contained in this report. This document
is provide for assistance only and is not intended to be and must not alone be taken as thebasis for an investment decision.
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