CMP: 77.3
Recommendation: Buy
Hanung toys is my most recent pick. It is the only Indian company in the stuffed toys segment and exports stuffed toys to retail chains. Apart from toys it is a leading manufacturers and exporters of home furnishing. Hanung has the license for Walt Disney characters in India.
The company has a Book value of Rs 123.76 which is way below the CMP of 77.3.
The F09 revenues grew by almost 30% to Rs 637 crores. The company has an EBIDTA of 16% and PAT margin at 10.39%. The EPS is at 24.88 and the PE stands at close to 3. The company has a healthy order book of close to Rs. 1200 crores and has clients like Walmart, Metro, lifestyle. The Stock has a 52 week high of Rs 201. At a price of Rs 77 the stock looks to be undervalued and can easily command a PE of 5 valuing the stock at Rs 120.
Disclaimer: All the views expressed in this blog are based on my analysis and investor's discretion is required before investing in the above stocks
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Dude amazing.....looking fwd to more small caps recommends like this....
ReplyDeletebt few doubts....
Don't the chinese have a huge price advantage in this sector. So won't the company face a growth problem with its ability to grow its revenues limited and also pressure on its margins?
What about PE of similar companies? Is it the biggest organized player in the market?
Does the company stand to benefit from any big Walt Disney animation movie release along with the merchandise for it?
Isn't the EBITDA a little low for a stuffed toy manufacturer? Also it would be useful to know the inventory turnover ratio, as some of the inventory will be unviable to sell cos it gets outdated...
Too many questions I know, but I will also be looking into the same before investing.
Hey dude ... purely relevant questions ..... As u would have already seen the stock is up 10% from the levels i had suggested ....the company is the only Indian player in this industry ...... China is a big threat but with Hanung having an order book of close to 1300 crores which would suffice for the next 2 years this should not be a matter of concern...... for the short term you can bet on the fact that with Christmas and New year's around 3 months from now the 3rd quarter is expected to show good results because the shipping for the same would have commenced by now ... also if i take a P/E of 5 for the company which is way below the Sensex P/E the stock could well trade at around Rs 120. Which would be a return of 50% which I think is good enuff
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