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* In Q1CY22, the net Sales of the company grew by 10% and 15% on a QoQ and YoY basis respectively.

* The company reported EBITDA of Rs. 50.7 cr with margins of 7.0%.

* PAT for Q1CY22 was reported at Rs. 24.6 cr which grew by 52% on a YoY basis, PAT margins reported was 3.4%. EPS reported is Rs. 3.26.

* The company has passed a resolution in its board meeting that it will be monetizing its land bank in Chikoli MIDC which can generate considerable free cash flow for the company.

OUTLOOK AND VALUATION

We believe that the growth in the FMCG and the Pharma segment due to increased demand from consumers will be one of the major factors in the growth of the business of HIL. Additionally, innovative packaging products which form ~25% of the company’s total topline coupled with geographical diversification will have a substantial positive impact on the margins of the company. The strong and superior financials will enable the company to tackle any adverse factors in the industry with ease.

Hence, for CY22E & CY23E we have maintained our projections and expect the company to deliver sales growth of 7% & 10% respectively. In addition to the growth in the revenue, we expect the company to deliver EBITDA and PAT margins of 9.1% and 4.1% respectively for CY23E. EPS for CY23E is projected to be ~Rs.16.9. We have assigned a P/E multiple of ~16.6X and arrived at a target price of Rs.280 which provides an upside of ~41% from the current market price of ~Rs.199 within an investment horizon of 16-18 months. Hence, we maintain our rating at ‘BUY’.

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