Hindustan Foods reports highest turnover and profitability

Hindustan Foods Limited, India's most diversified contract manufacturers of FMCG, announced their unaudited financial results, for the quarter and half year ending 30th September, 2020.

Key Standalone Financial Highlights for the quarter are as follows:

- Gross Revenues grew by 85% from Rs. 172.5 crores in Q2FY20 to Rs. 318.4 crores in Q2FY21
- EBITDA grew by 72% from Rs. 12.8 crores in Q2FY20 to Rs. 22.0 crores in Q2FY21
- PAT grew by 71% from Rs. 4.9 crores in Q2FY20 to Rs. 8.4 crores in Q2FY21

Key Standalone Financial Highlights for the half year are as follows:

- Gross Revenues grew by 64% from Rs. 317.1 crores in Q2FY20 to Rs. 520.3 crores in Q2FY21
- EBITDA grew by 54% from Rs. 24 crores in Q2FY20 to Rs. 37 crores in Q2FY21
- PAT grew by 37% from Rs. 9.2 crores in Q2FY20 to Rs. 12.6 crores in Q2FY21

Key Developments

- Highest quarterly revenues and PAT in the history of the Company

- The Company entered into a long term contract to manufacture a national brand of Disinfectant Toilet Cleaner for its newly built Silvassa facility. The facility was built in 7 months in spite of the CoVID restrictions Commercial production started in September 2020 and the plant has a capacity of 100KL/day

- The Company has started building another dedicated plant to manufacture a National brand of Surface Cleaner in Silvassa. Expects commercial production to start from February 2021

- Merger of Beverage plant in Mysuru is in progress

- Merger of Malt Beverages making plant in Coimbatore is in progress

- Pursuant to Board sanction of additional investment of Rs. 150 crores, project work commenced for manufacturing of personal care and home care products in Hyderabad

Commenting on the results, Mr Sameer R. Kothari, Managing Director said, "We are delighted to achieve the highest turnover and profitability for Q2FY21 despite the current pandemic. The numbers are a vindication of the team's effort in building a resilient business capable of performing even in the most adverse conditions. This quarter saw us being able to service demand from our customers in face of continuing localized lockdowns and a wider spread of the pandemic. I am pleased that all of our factories have delivered record production in this quarter ensuring that our service levels to the customers were unmatched. We were happy to enable our customers to cater to the increased demand for their Foods, Health & Hygiene products by ramping up production as required.

We have ensured that all our employees are safe and have assured them of a secure working environment. No employee faced a pay cut, and we were able to retain all the employees without any layoffs. In fact, the management was able to give out increments to our team as a small token of our appreciation of the super-human efforts put in during the CoVID times. Even during current times, we continue with all our CoVID-19 policies.

The disruption of the supply chains has made it imperative for FMCG Companies to relook at the sustainability of their business partners and that would lead to consolidation in the contract manufacturing space. We believe that HFL is well positioned to leverage these developments. The emphasis of self-reliance and localisation of sourcing should further help in generating new opportunities for us. In addition, any shift of the global supply chain away from China and towards India should also create further opportunities.

The pandemic has further reinforced our strategy for decentralized manufacturing and also proven the benefits of contract manufacturing. On the back of this vision, we have invested more than Rs. 300 crores in the last 2 years and with the upcoming investment of Rs. 150 crores, our goal for FY2022 continues to be a topline of Rs. 2,000 crores of turnover."

Shares of HINDUSTAN FOODS LTD. was last trading in BSE at Rs.976.35 as compared to the previous close of Rs. 928.55. The total number of shares traded during the day was 2857 in over 389 trades.

The stock hit an intraday high of Rs. 985 and intraday low of 936.05. The net turnover during the day was Rs. 2727869.

Source : Equity Bulls

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