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HNGI is the largest container glass (bottles) manufacturer in India with a market
share of 55% (source: company). Its key customers include players from liquor,
pharmaceutical, soft drinks and food industries. HNGI is in the process of expanding
its glass bottling capacity from current 3,250TPD to 5,650TPD by FY15 to cater to
rising demand. It has also recently entered the float glass market, through its associate
company HNGFL in which it has 47.4% interest. HNGFL operates a 600TPD plant,
which has rapidly gained market share (21% pan-India share in first year of
operations according to company) in the clear glass segment.
End user demand continues to be strong: According to the management, Indian
glass container market is growing at about 12% per annum driven by end user
industries of Liquor, Pharma, food and carbonated drinks. Management has not
seen any material slowdown in demand recently and believes it will be able to
grow revenues 12%-15% going forward.
Capacity expansion, entry in float glass could drive growth: HNGI is in the
process of expanding its capacity from current 3,250TPD to 5,650TPD by FY15 in
order to cater to increasing demand. It has also recently entered the float glass
market, through its associate company HNGFL in which it has 47.4% interest.
HNGFL operates a 600TPD plant has rapidly gained market share in the clear
glass segment (21% pan India, 30% in west India).
Management expects German acquisition to turn profitable next year: HNGI
has acquired a glass container plant in Germany recently to gain a foothold on the
German market as well as to acquire technology know-how. The German facility
is currently loss-making as the PTM ratio (usable to defective bottles) is low.
According to management, it has made a plan to improve the ratio by reducing the
number of defects and expects the plant to turn profitable next year.
Consensus valuation: Based on Bloomberg consensus estimates, HNGI is trading
at 6.5xFY12E P/E and 4.6xFY13E P/E. On a P/BV basis, it is trading at 1.1x
FY12E and 0.9x FY13E vs FY12E ROE of 14%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
HNGI is the largest container glass (bottles) manufacturer in India with a market
share of 55% (source: company). Its key customers include players from liquor,
pharmaceutical, soft drinks and food industries. HNGI is in the process of expanding
its glass bottling capacity from current 3,250TPD to 5,650TPD by FY15 to cater to
rising demand. It has also recently entered the float glass market, through its associate
company HNGFL in which it has 47.4% interest. HNGFL operates a 600TPD plant,
which has rapidly gained market share (21% pan-India share in first year of
operations according to company) in the clear glass segment.
End user demand continues to be strong: According to the management, Indian
glass container market is growing at about 12% per annum driven by end user
industries of Liquor, Pharma, food and carbonated drinks. Management has not
seen any material slowdown in demand recently and believes it will be able to
grow revenues 12%-15% going forward.
Capacity expansion, entry in float glass could drive growth: HNGI is in the
process of expanding its capacity from current 3,250TPD to 5,650TPD by FY15 in
order to cater to increasing demand. It has also recently entered the float glass
market, through its associate company HNGFL in which it has 47.4% interest.
HNGFL operates a 600TPD plant has rapidly gained market share in the clear
glass segment (21% pan India, 30% in west India).
Management expects German acquisition to turn profitable next year: HNGI
has acquired a glass container plant in Germany recently to gain a foothold on the
German market as well as to acquire technology know-how. The German facility
is currently loss-making as the PTM ratio (usable to defective bottles) is low.
According to management, it has made a plan to improve the ratio by reducing the
number of defects and expects the plant to turn profitable next year.
Consensus valuation: Based on Bloomberg consensus estimates, HNGI is trading
at 6.5xFY12E P/E and 4.6xFY13E P/E. On a P/BV basis, it is trading at 1.1x
FY12E and 0.9x FY13E vs FY12E ROE of 14%.
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