The stock of Hawkins Cookers came into limelight only in the latter half of 2009 when investors were hunting for consumer stocks. But since then, the stock has had a spectacular rally.
The Sixth Pay Commission bounty to government employees, higher support prices for food crops to farmers, and the well-being of the overall economy helped boost demand for consumer durable players including the kitchen appliance makers over the last few years.
Hawkins Cookers has seen its sales grow at 18 per cent annually over the last three years and net profits recording an annualised growth of 40 per cent.
Fundamental performance apart, a valuation in re-rating triggered the stock's dream run on the bourses. From a price-earnings band of 8-10 times in 2007, the stock's valuation had jumped to 20 times by 2010. It is currently at a trailing twelve-month PE of 50 times.
The rally in the price of Hawkins Cookers started much after the rally began in TTK Prestige. Investors who missed catching TTK Prestige at its low, fled to Hawkins Cookers, expecting it to run up on same triggers. This move paid off well. However, the company reported a drop in net profits for 2010-11, even as sales expanded, on the backs of it being unable to hold profit margins on increased input prices.