Thread by @LnprCapital

HINDWARE HOME Analysis!!
#HINDWAREAP

A detailed thread 🪡🧵
#StockMarket #Investing

About -

Hindware Home Innovation Limited is a leader in Building Products & one of the fastest growing players in the Indian Consumer Appliances segment. The co is involved in manufacturing, branding, marketing, sales & distribution service of various product categories.

The Consumer Appliances business consists of household appliances such as kitchen appliances: chimneys, built-in hobs, dishwashers, cooktops, built-in ovens, cooking range, water purifiers & sinks. The co also houses air coolers & ceiling fans. Hindware also has a

strategic marketing tie-up with leading Italian co, Formenti & Giovenzana in the furniture & kitchen fittings segment. Hindware expects to grow its
revenue by ~20% CAGR & EBITDA by ~40% CAGR by FY25 largely on the back of Consumer & pipes business.

Business Model & Revenue Mix -

~ Building Products Business –

Well entrenched distribution network supported by strong & efficient manufacturing and sourcing capabilities
− Leading player in sanitaryware & faucets space
− Leading growth in plastic pipes & fittings
solution

~ Consumer Appliance Business –

Innovative offerings across varied product categories.

~ Retail Business -

Specialty home interior products under brand ‘Evok’

~ Hintastica Private Limited (HPL) is a 50:50 JV with Groupe Atlantic, a leading French Group in heating solutions

Financial Summary -

FY 2022 (YoY)

Revenue at ₹ 2294 Cr vs ₹ 1775 Cr
EBITDA at ₹ 204 Cr vs ₹ 161 Cr
PAT at ₹ 203 Cr vs ₹ 55 Cr

Product Line :

▪️ Building Products -

Leading player in sanitaryware & faucets segments

~ Brands available across price points.

~ Control over entire value chain & strong network of distribution and service

~ In-house manufacturing and sourcing capabilities of Sanitaryware

& Faucets, to have better and efficient control over processes

~ 310+ Brand Stores for an immersive customer experience

~ 290+ Distributors for wide network

~ 20,000+ retail touchpoints

~ Catering to 1100+ institutional clients

~ A service network of 400+ technicians pan India covering more than 640 districts, with a TAT of 24 hours in metro markets and 48 hours in upcountry markets

▪️ Plastic Pipes & Fittings -

~ TRUFLO by Hindware, is the fastest growing plastic pipes & fittings brand in India

~ With 1,200+ SKUs already being offered and many more being added, TRUFLO aims to be amongst the top 5 players in 5 years

~ In-house manufacturing for better efficiencies & end to end logistics and supply chain control

~ Co offers CPVC pipes for hot and cold water plumbing applications, along with lead-free UPVC pipes, SWR pipes, PVC pipes for potable water, column pipes & overhead water storage tanks

~ Currently, the business has 270+ active distributors with more than 20,000 retail outlets

Marquee Clients -

▪️ Consumer Appliances -

Forward looking portfolio spanning categories like Kitchen appliances, Air coolers, Ceiling & pedestal fans, Water heaters (part of 50:50 JV with Groupe Atlantic), Water purifiers o Kitchen & Furniture fittings (brand FGV Powered by Hindware,

a strategic tie-up with Italian company Formenti & Giovenzana)

Strong Distribution reach of 12,500+ Retail outlets, 1,400+ Distributors, dealers and modern & large retail
outlets of 140+ Exclusive Kitchen galleries.

Retail Business -

~ Specialty home interior products through modern format stores & digital platforms under the brand ‘EVOK’

~ Offering a range of 5,000+ products across 17,000+ pin codes

~ Display and Sales centres in Delhi and Faridabad & a growing chain of franchise stores

~ Strong e-commerce presence through online portal EVOK.in & other e-commerce giants such as Amazon, Flipkart, Pepperfry, etc.

Risks -

~ Downward pressure on EBITDA margin

~ Slowdown in housing market: Any unexpected demand slowdown in housing market will adversely affect growth of Co.

~ Sharp fall in PVC resin prices: A sharp and sudden fallen in PVC resin prices will adversely affect the profitability of the company.

Conclusion -

Co has now entered segments to increase its addressable market opportunities to ₹ 40,000 Cr in last few years.

Co has rapidly gained market share in newer segments including Faucets (2nd largest player), Kitchen Chimney (2nd largest player), Air Coolers

(5th largest player), Water Heater (6th largest player), which is a testimony of its execution is its ability.

Increase in EBITDA margins will be contributed by operating leverage benefits contributed from the Pipes & Consumer appliance business.

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