hawkins cooker ltd share price Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

We operate in the market consisting of Pressure Cookers and Cookware. The industry structure is quite competitive with both small-scale and organized sector units.

The unprecedented inflation in raw material costs has moderated. Along with more efficient operations this has helped improve our margins. We expect the competition to be intense, but your brand has strengthened during the pandemic and is now stronger.

We expect our products to continue to do well with the 53 new product launches we have done during the year at a rate of almost one launch per week. We have further plans.

Our permanent employees as on April 1, 2022, were 589 and as on March 31, 2023, were 582 through normal attrition and recruitment. The morale of our employees at all locations is high and industrial relations are normal. We appreciate the contribution of our employees to the successful working of your Company.

Net profit after tax as a percentage of net sales in 2022-23 was 9.4% as against 8.8% in 2021-22. The average shareholders funds/net worth grew to Rs.244.66 crores vs. Rs.195.40 crores in 2021-22. The net return after tax on shareholders funds/net worth was 39% (in 2021-22: 43%).

Control Systems

In our judgment, the Company has adequate financial and administrative systems and controls and an effective internal audit function.

Key Financial Ratios

The required details of significant changes (25% or more) in the key financial ratios for the year 2022-23 as compared to the year 2021-22 are as follows:

Ratio	FY 2022-23	FY 2021-22	Formula used	Reason for change
Debt Service Coverage Ratio	16.72	6.81	Earnings available for debt service/ Debt service	The debt service coverage ratio has improved due to better profits and reduced debt repayment obligations during the year.

Cash flow during the year was good. Cash and cash equivalents plus balances with banks on deposit accounts as on March 31, 2023, were Rs. 100.82 crores (previous year: Rs.59.88 crores). We have plans to utilise these funds appropriately, including for managing working capital, improving quality and in further expanding production capacity.

Risks and Concerns

Your Company has constituted a Risk Management Committee as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of which are provided in the Report on Corporate Governance.

Foreseeable risks that the Company may encounter and concerns have been addressed in a documented Risk Management Framework and Policy which is reviewed by the Risk Management Committee and the Board from time to time.

Our capital and financial resources, liquidity position, supply chain and assets remain healthy.

Opportunities and threats

The excellent demand for our brands augurs well for the future of the Company.

While the cost of Aluminium, our main raw material, has moderated, the future outlook on the trend continues to be difficult to predict. Your Company is taking effective steps to deal with the challenge.

General inflation can impact the purchasing power of our customers.

Management continues to diligently watch the cost trends and pursues effective cost controls from time to time to keep our products affordable.

Outlook

We believe the outlook for our business is excellent under the circumstances. In this year, we have further strengthened the good reputation we have amongst our consumers and traders, associates and vendors. We expect to continue to increase our sales and profits.

All forward-looking statements in our report are based on our assessments and judgments exercised in good faith at this time. Of course, actual developments and/or results may differ from our present anticipation.