1/ Somany Home Innovation Limited
Proxy play company to real estate
#SHIL #HINDWARE
Attempt to analyse the company as a movie rather than a static picture.
Motivated by @ishmohit1.
"Legacy business nurturing the baby segments"
Proxy play company to real estate
#SHIL #HINDWARE
Attempt to analyse the company as a movie rather than a static picture.
Motivated by @ishmohit1.
"Legacy business nurturing the baby segments"
2/ About the Company
SHIL was formed after the demerger of HSIL to separate retail and customer products by the end of CY19. Brilloca is a fully owned subsidiary.
SHIL was formed after the demerger of HSIL to separate retail and customer products by the end of CY19. Brilloca is a fully owned subsidiary.
3/ Careful to keep business asset-light and prefers to act as contract manufacturer so that management can focus to improve distribution and marketing.
4/ SHIL's legacy business is building material (sanitaryware) under the famous brand HINDWARE. HINDWARE is one of the oldest and most famous brands in this industry.
5/ 💸💰💴💶 Revenue streams 💸💰💴💶
6/ -[1]- 🚽🛁 🧱Building materials ~70% 🚽🛁 🧱
They operate in this segment for more than 60 years and excelled to gain a major market share of 40%. The market size of sanitaryware is considered to be 4000Cr among the organised players.
They operate in this segment for more than 60 years and excelled to gain a major market share of 40%. The market size of sanitaryware is considered to be 4000Cr among the organised players.
7/ CERA, KAJARIA CERAMICS, and SHIL cater to the most organised players market.
8/ Apart from HINDWARE SHIL managed to build brands among other brands across different price segments.
Luxury: #QUEO
Premium: #HINDWARE
Economical: #BENELAVE
Luxury tiles: #NEOM
Luxury: #QUEO
Premium: #HINDWARE
Economical: #BENELAVE
Luxury tiles: #NEOM
9/ - This vertical has an EBIT margin of 8~10% and runs profitable but the growth seems to flattish for the last 2 years.
10/ - Distribution reach:
Retail outlets >7000.
Indirect reach >20,000.
Distribution partners >220
Brand outlets >250
Institutional clients >1100
Retail outlets >7000.
Indirect reach >20,000.
Distribution partners >220
Brand outlets >250
Institutional clients >1100
11/ -[2]-📺🔌💡🖥️ Consumer Appliances 📺🔌💡🖥️
Leveraging the brand HINDWARE, SHIL successfully launched sub-brands in household appliances.
Leveraging the brand HINDWARE, SHIL successfully launched sub-brands in household appliances.
12/ - Aggressive investments for product design, branding, and innovations have already been done during the past 2-3 years.
- Managed to get significant market share.
#2 Player in the kitchen chimney
#5 Player in Air Cooler
#6 Player in Water heater
- Managed to get significant market share.
#2 Player in the kitchen chimney
#5 Player in Air Cooler
#6 Player in Water heater
13/ - Entered into kitchen fitting and furniture segment via marketing tie-up with Forementi & Giovenzana. (brand FGV powered by Hindware)
14/ -[2]-🚿🛋️🛏️Pipe Fitting and Furniture 🚿🛋️🛏️
- #TRUFLO by Hindware is the brand operating in the pipe fitting segment.
- Able to make own grip in the segment despite newly entered.
- EBIT margins are standing at the lower end still, 9%.
- #TRUFLO by Hindware is the brand operating in the pipe fitting segment.
- Able to make own grip in the segment despite newly entered.
- EBIT margins are standing at the lower end still, 9%.
15/ - Brand #EVOK operates in the furniture retail segment.
- Still in the early stages of the segment.
- Looking forward to focusing on the franchise model and e-commerce.
- Still in the early stages of the segment.
- Looking forward to focusing on the franchise model and e-commerce.
16/ 👁️👁️Promoter Guidance for next 8-14 Quarters 👁️👁️
- Building Material 🚽🛁 🧱
Expand EBITDA Margins to 15% from 9%
Growth of 10% in revenue.
- Building Material 🚽🛁 🧱
Expand EBITDA Margins to 15% from 9%
Growth of 10% in revenue.
17/ - 📺🔌💡🖥️ Consumer Appliances
- EBIT just turned positive in recent quarters.
- Asset light business model might help them to improve the EBITDA and EBITDA Margins once reached critical mass.
- EBITDA growth 30%.
- EBIT just turned positive in recent quarters.
- Asset light business model might help them to improve the EBITDA and EBITDA Margins once reached critical mass.
- EBITDA growth 30%.
18/ - Pipe Fitting and Retail 🚿🛋️🛏️
- EBIT Margins will be expanded as they reach the critical mass.
- Revenue growth of 26% expected.
- EBIT Margins will be expanded as they reach the critical mass.
- Revenue growth of 26% expected.
19/ Conclusion:
- SHIL identified the growth potential of the legacy vertical (sanitaryware) is getting limited due to the consolidated nature of the organised market.
- SHIL identified the growth potential of the legacy vertical (sanitaryware) is getting limited due to the consolidated nature of the organised market.
20/ Being the leader of the segment with a successful business model, growth may get limited to (+-2%) of market growth.
21/ - Gradually entering into the new segments leveraging the leading brand name HINDWARE and existing distribution network is perfect combincation to scale up those verticals as well.
22/ - Focused to keep the business model asset-light might benefit in the long run.
- Building Material vertical's profitability at the moment nurturing the new segments.
- Building Material vertical's profitability at the moment nurturing the new segments.
23/ - Initial quarter suppressed the return ratios, but, now, start to improve as the new segments achieve the critical mass.
24/ - The decision made by SHIL is actually building the business vertical around their competency by perfectly leveraging their advantages in the industry and allocating capital in a significantly good manner.
25/ Technical View
Currently in consolidation mode.
Resistance zone marked in Red Line (470-480).
The best way to enter is a buy now is via staggered manner.
Currently in consolidation mode.
Resistance zone marked in Red Line (470-480).
The best way to enter is a buy now is via staggered manner.
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