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Hawkins Cooker: High RoCE business available at reasonable valuations

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Consumer-centric businesses, which generate consistent high return on capital, have been a favourite among both domestic and international investors as this translates into hefty returns in terms of stock performance over long periods of time. Such companies also offer safer investment proposition in the current scenario as the market volatility appears elevated in light of the upcoming elections and concerns of a global slowdown.

Hawkins Cooker, the manufacturer of pressure cookers and cookware, is one such company that has delivered a return on capital of more than 50 percent in each of the last 10 fiscals. The company merits investor attention as the current valuations are at a steep discount to its closest competitor: TTK Prestige. The recent fall in metal prices augurs well for the company.

Operational performance better than TTK Prestige

TTK Prestige and Hawkins Cookers are two of the largest players in the Indian kitchen appliances market and are extremely popular household names in the country. The former has a much broader product portfolio, which spans pressure cookers to appliances to cook tops and chimneys. In contrast, Hawkins operates in two major business segments: pressure cookers and cookware. The pressure cookers are marketed under the flagship brand Hawkins and also under Futura and Miss Mary. Cookware is sold under the Futura brand name.