Hawkins dishes out delicious earnings and dividends thanks to corporate tax cuts
- Hawkins shares surged 38% over the past year.
- September, 2019 tax rate cuts cushioned Hawkins quarterly growth.
- Hawkins revenue grew 10.6% in the past quarter.
AdvertisementUnlike the most Indian companies that suffered the slowdown last year, Hawkins has been dishing out earnings which few companies could. It reported a fantastic quarter with as its net profits jumped by a massive 80.6%. The stock has been on an upswing and surged almost 38% in the last one year.
The cooker maker owes its success to new product launches and enhanced marketing - which showed a turnaround last year..
“With the company reporting moderate revenue growth in FY13-18, FY19 was a turnaround year for Hawkins Cookers. The company reported one of its highest topline growth of 18% YoY to 652.8 crore in FY19,” said a brokerage report by ICICI Direct Research.
Perks of corporate tax cut
The truth behind the surge in profits is not just good sales but government’s stimulus packages that reduced tax rates.
The government cut corporate tax rates from 30% to 22% in September 2019. It turned out to be a game changer for Hawkins. What’s more, the company intends to pass on the tax benefits to shareholders in the form of higher dividend payouts.
“The recent cut in corporate tax rate has been a big positive for Hawkins as it was hitherto a full tax paying company,” said the company in its latest quarterly financial report.
|Financial Performance (year end March)||FY15||FY16||FY17||FY18||FY19|
|Net Profit (₹crore)||₹32.1||₹40.3||₹47.4||₹48.7||₹54.2|
The brand being in business for the last 61 years is the most popular kitchenware brand in Indian households. It also sold over 72 million cookers worldwide.
The legacy started by H.D. Vasudeva at the age of 54, in technical collaboration with L.G. Hawkins of England. Today, it has 800 full-time employees working at 5 different locations on various brands like Futura, Ventura and Hevibase.
The head of Hawkins Cookers is non-executive chairman Brahm Vasudeva who also holds a position at the board of The Indian Society of Advertisers. Vasudev’s net worth is valued at $93 million according to Market screener, and it might only increase if Hawkins shares continues its run at the exchanges.
Popular on BI
- Adani Ports Q1 profits declines to ₹1,091 crore
- Unicorns and startups should prepare for a longer funding winter, says SoftBank's Masayoshi Son
- Lok Sabha passes Energy Conservation Bill to promote non-fossil fuels
- Indian government is reportedly planning on restricting Xiaomi, Realme, Vivo and Oppo from the budget smartphone segment
- Less than 50% of children able to catch up with age-appropriate learning, claims survey