Buy Hind Nat Glass; target of Rs 351: Unicon Investment

Unicon Investment is bullish on Hindusthan National Glass and Industries (HNG) and has recommended buy rating on the stock with a target of Rs 351 in its March 7, 2011 research report.

Hindusthan National Glass and Industries (HNG) is the leader of container glass market in India, with 55% share. The Company has pan India presence and its container glass portfolio ranges from 5ml to 3,200 ml in various colors, such as amber, flint and green. As of FY10, the Company has an installed capacity of 2825 TPD of Glass Bottles and Vials. It also has 47.5% stake in the float glass venture, HNG Float Glass Ltd, with an option to increase it.With sustained growth in user industry, we expect HNG's revenue to grow at13%&14%and Net Profit to grow at9%&11%in FY11E&FY12E respectively.” 

“Container glass market is expected to grow at 10% - 12% per annum backed by a CAGR of ~ 10%, 16%, 15% and 14% in liquor, pharma, beverages and processed foods respectively. We believe HNG with its pan India presence is well placed to exploit the user industry growth. HNG has embarked upon an ambitious INR 25 bn expansion plan to cater to rising demand from user industry. The management plans to increase the total capacity from 2825 TPD in FY10 to 4,805 TPD by FY13, an increase of 70%. The green field plant at Naidupeta is strategically placed in the highest liquor consuming state of Andhra Pradesh, making company's growth prospects better. Power accounts for ~28% of total operating cost. HNG has shifted from Furnace Oil and LPG to Natural Gas in Bahadurgarh & Neemrana plants and is in the process of shifting to Natural gas in Rishra by Apr ‘11, Nashik by Sep ’11, Puducherry by Oct ‘12 , Rishikesh by Jun ‘13; which will lead to a saving of ~INR 50 mn per plant per annum thus improving the overall operating margins. Improvement in draw and pack efficiencies, economies of scale in sourcing, production and customer service will further add to margins. HNG Float Glass Ltd (HNGFL) captured 15-18% (clear float glass) market share in 6 months and expects to more than break even at the net level in a full year's working in FY11.HNGhas 47.5% stake in the float glass venture. Rising stake in HNG Float Glass would be EPS accretive for HNG.” 

Read more below.

600450 Buy Hind Nat Glass; target of Rs 351: Unicon Investment
Date: 22 March 2011

See more news about:

Others also read

Proprietary laminate windows collect, store energy; convert it to electricityRIVIERA BEACH, FL – An innovative new patented technology transforms office building windows into "solar farms" and allows these structures to reuse collected energy and become self-sufficient in the event of a power outage.
DALLAS, Texas, December 22, 2011 /PRNewswire/ --ReportsnReports adds new market research report 'Solar Photovoltaic (PV) Power - Global Market Size, Installation Prices, Module Market Shares, Market Segmentation, Regulations and Key Country Analysis to 2020' to its store.
The University of Minnesota's historic Folwell Hall completed three years of extensive renovation, just time for the 2011 academic year.
Today designers and architects are looking to the hotel bathroom as the new frontier of the guestroom, turning what has long been a mostly functional space into a haven and means of escape.
Glassman as one of the largest glass processing machine manufactures in the world presented ZAK Glass Technology Exhibition during 8-11 December 2011, in Mumbai, India.
The development of ESG’s privacy glass product, ESG Polyvision™, has quite literally reached new heights.

Add new comment