I was looking at HSIL (Hindustan Sanitaryware) and it came across as an excellent and boring business!! They make about 50% revenues from sanitaryware and the other 50% from glassware, specially colored bottles for soft drinks like Sprite, beer and industrial chemicals. It is a good solid business, run by what seems to be able management. I have bought a small initial quantity as well.
Then I stumbled upon Cera sanitaryware. It is a much smaller company but focused on only the sanitaryware segment. The basic comparison is given in the table below.
Then I stumbled upon Cera sanitaryware. It is a much smaller company but focused on only the sanitaryware segment. The basic comparison is given in the table below.
HSIL
|
Cera
|
|
Sales
|
1073.88
|
254.95
|
PAT
|
87.35
|
26.54
|
EPS
|
13.23
|
20.97
|
Sales growth (5 yrs CAGR)
|
21.79%
|
23.39%
|
PATgrowth (5 yrs CAGR)
|
31.61%
|
30.79%
|
EPS growth (5 yrs CAGR)
|
25.76%
|
29.48%
|
OPM%
|
17.68%
|
19.47%
|
NPM%
|
7.21%
|
10.79%
|
Div Yield%
|
1.67%
|
1.19%
|
RoE%
|
11.66%
|
23.79%
|
RoCE%
|
13.38%
|
29.65%
|
Asset Turnover ratio
|
0.99
|
2.14
|
Debt-Equity ratio
|
0.59
|
0.34
|
Div payour ratio
|
24.49
|
13.85
|
PE
|
9.2
|
8.6
|
P/B
|
1.4
|
2.3
|
Stock returns (last 5 yrs)
|
63.09%
|
183.19%
|
Sensex return (last 5 yrs)
|
26.80%
|
|
Having looked at Cera, I think it definitely merits a closer look and probably a bigger slice of the investment pie than HSIL.
P.S: I am an interested part in these stocks as I hold HSIL and intend to buy into Cera. Please do your own due diligence before investing.
Hi abhishek,
ReplyDeleteVery nice blogs indeed. In my opinion, Cera is a steady compounder in years to come with likely re-rating also. Cera Promoters have recently bought reasonable quantum of stock in the range of 200-212. I have done some analysis of Cera in http://www.valueinvestinginpractice.blogspot.in/2011/11/cera-sanitaryware-prospective-steady.html and http://www.valueinvestinginpractice.blogspot.in/2012/02/my-first-tryst-with-scuttlebutt-cera.html.
Do share your views,whatever I have missed in the analysis from endowment bias.
Hi Dhwanil,
DeleteGood analysis on Cera. I think HSIL's margins are lower due to their bottling business. An interesting aspect of sanitaryware companies is that India has more mobile phones than toilets! And with newer housing coming up, the total addressable market size is likely to increase for a long time to come (atleast 10 years in my mind). Add to that the replacement demand. So future looks good for both the companies.
Discl: I have positions in both and intend to add more.
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ReplyDeleteGood info about HSIL & Cera Sanitaryware.Thanks for sharing.
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