To raise $50m via QIP in Q1FY11: Hanung Toys
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In an interview with CNBC-TV18, Ashok Kumar Bansal, Chairman and Managing Director of Hanung Toys, spoke about his outlook for the company.
Here is a verbatim transcript of an exclusive interview with Ashok Kumar Bansal on CNBC-TV18. Also watch the accompanying video.
Q: Could you confirm if the company is indeed planning a qualified institutional placement (QIP) to the tune of USD 50 million?
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A: Yes we are working out and we will plan that in the first quarter of the next fiscal.
Q: How much dilution would this lead to?
A: We would prefer to keep at least 50% stake. Right now we have 65%.
Q: So a 15% dilution?
A: Yes
Q: How much would you be raising in the first tranche? Would you raise this entire amount because this approval did come in the month of August? Your board has approved this amount. How much would you be raising and what would these funds be used for from here on?
A: We will raise the full money. The fund would be raised partly for the working capital requirements and partly for the expansion.
Q: What expansion plans do you have currently? Could you tell us your orderbook position as to where it stands?
A: Right now the orderbook is close to Rs 1,500 crore. We are expecting one big tie up with one of the buyers which may happen in the next couple of weeks.
Q: From which geography this buyer is?
A: Our main markets are US and Europe.
Q: This particular tie up that you are talking about, the last time when we spoke to you, you announced a big order to the tune of Rs 450 crore that you got for exporting value added home furnishing. Where does that stand and has that been executed and is that a part of this that you are talking about?
A: That was separate. We have already started that order exaction.
Q: So when would that reflect in your revenues?
A: From March onwards, it has already entered into our sales turnover and that was for the first three years. This would be another big order. As soon as we sign it we will inform everyone.
Q: So what is your current orderbook? Could you quantify the sum for us?
A; Approximately Rs 1,500 crore
Q: Executable over?
A: The average period would be around two years.
Q: Just had a question for you in terms of your breakup in your toys and textiles because you have seen a bump up and this time we have done about Rs 85 crore in toys and Rs 129 crore in textile. On the back of this orderbook that you have got, how much of a percentage increase do you think both these segments will see from here on? Where would you maintain margins? It was down about 18% of margins this time. Do you think you would hold on to that level?
A: For toys and furnishing, it would be around 40% for toys and 60% for furnishing. In both the segments we are expecting a close to this business by about 25-30%.
Q: In both segments respectively?
A: Yes.
Q: Would you maintain your margins at 18% or more?
A: Margins will be better because our third and fourth are going to be a bit better.
Q: When would your QIP be completed?
A: Within the first quarter itself.
From: Deepak Aggarwal <aggarwaldeepak@
Date: Mon, Feb 8, 2010 at 11:26 AM
Subject: Hanung Toys and Textiles_ At Est.EPS of ~35_Current FY10 PE is 3.5x
To:
| (in Cr.) | Dec-09 | Sep-09 | FY08-09 |
| Revenue | 214.48 | 182.62 | 637.61 |
| Net Profit | 23.08 | 18.65 | 64.45 |
| EPS | 9.16 | 7.40 | 25.59 |
| EPS-TTM | 27.77 | 24.56 | 25.59 |
| Cash EPS | 10.90 | 9.06 | 30.08 |
| P/E | 4.30 | -- | 4.66 |
Hanung Toys & Textiles Ltd. (HTTL) is the only player in India to export stuffed toys to retail chains. In India, it has the distinction of being the leading manufacturer and exporter of Soft Toys and one of the leading manufacturers and exporters of Home Furnishings. It is the licensee of Walt Disney characters for soft toys in the country. HTTL's pioneering efforts on the shaped cushions have revolutionised the market, both domestic and international. This provides a strong revenue visibility for the company in the future.
In an interview with CNBC-TV18, Ashok Kumar Bansal, Chairman and Managing Director, Hanung Toys and Textiles, speaks about the latest happenings in his company and sector.Here is a verbatim transcript of the exclusive interview with Ashok Kumar Bansal on CNBC-TV18. Also watch the accompanying video.
Q: Can you give us details of this USD 100 million order that you bagged yesterday from a leading US buyer?
A: Yes. One of our US customer and we have tied up with for three years, it is a three year order. They are one of our old customers, who have tied up for a long-term contract. After signing the contract, our Home furnishing value added product will help the company to grow in the topline and as well as will substantially improve the margins of the company. So after signing up we have a total orderbook of almost Rs 1500 crore.
Q: So by which quarter, which financial year will any revenue impact start showing up for you of this deal?
A: Even for Q3 the number will be better, Q4 will be much better. In financial year '11, there will be substantial improvement in that turnover as well as substantial improvement in the bottomline of the company. Right now, all the textile business is booming and there is a lot of improvement and all the textile companies are performing very well. So the EBITDA margins on the textile companies are going to improve substantially.
Q: You were approved fund raising as well to the tune of about USD 50 million. Have you decided what instrument you want to use and how much you want to raise?
A: It is still in the pipeline and we are working with the merchant banker. So I think will take another 3-4 months to raise the money.
Q: What kind of margin profile does this new order come with? Is it higher than your average margins of 17-18% or lower?
A: Yes. It is 20% plus.
Q: And of the Rs 1500 crore orderbook that you spoke about, how much is from home furnishing now?
A: Almost Rs 1000 crore in home furnishing and Rs 500 crore in the toys.
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Deepak Aggarwal
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