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The top line of the company has declined by 3.7% YoY basis to Rs 5.99bn vs our estimates Rs.6.7bn backed by muted home improvement demand. However, Bathware segment revenue de-grew by of 10% to Rs 3.2bn vs CEBPL est of Rs 3.9bn and margins declined by 287bps to 7.2%. whereas Pipes segment reported a revenue growth of 5% on YoY to 1.6bn vs CEBPL est of 1.7bn backed by healthy volume growth of 24% on YoY basis to 10,188MT, Pipes Realization down by 16% YoY led to decline in EBITDA/MT by 16% to Rs 10,699 and margins down by 10bps YoY to 7% in Q1FY25. Consumer Appliance segment delivered an unexpected performance, surprising the market with a 5% revenue growth YoY to 1.1bn vs CEBPS est of Rs 1.2bn backed by muted demand.

* Capacity expansion Pipes: Hindware via its brand “TRUFLO” has done excellent sales growth to Rs 7.7bn in FY24 a revenue CAGR of 43% over FY19 to FY24. overall pipes volume up by 5% YoY to 10,188MT and we expect going forward Volume/Revenue to grow at CAGR 20/12% over FY23 to FY26E and anticipates going forward the revenue contribution from this segment to increase from 28% in FY24 to 32% by FY26E. To capture ongoing demand Hindware expanding and putting up the new capex in Roorkee (Uttarakhand) of Rs 1.8bn and increasing pipes capacity by 12,500MT P.A (expandable up to 25,000MT P.A.) after this, total capacity will be 66,500MT P.A. and this project is expected to complete by 3QFY25, this capacity will also lead to reduction of logistic cost and margin improvement of 1 to 2%.

*  Muted Demand Undermines Growth in the Bath ware Market: Bathware segment revenue de-grew by 10% to Rs 3.2bn, whereas launching of new products in faucet were segment and better product mix has helped to maintain market share. The gross margins mainly down due to lower sales, Management has combined both sanitary were and faucet were business which led to increase of employee cost by 25%.

* Better Demand Consumer Appliances: The Consumer Appliance segment exceeded market expectations with an impressive 5% year-on-year revenue growth, bringing in ?1.1 billion, HINDWARE retained its leading position in the kitchen appliances segment. The company is actively expanding its kitchen appliance portfolio, leveraging its strengths, and streamlining product offerings to enhance margins amidst rising inflation and increased competition.

* View and valuation: HHIL to witness healthy Revenue/EBITDA/PAT growth of 6/19/32% CAGR over FY23-26E backed by 1) Strong position in bathware 2) greater presence in Pipes & fittings and consumer appliance 3) Strong brand call 4) strong distribution reach and better product offerings Further its upcoming new facility in Roorkee and strong presence in Bathware segment will likely to improve the overall profitability of Hindware Home’s (improvement in margin by 345bps over FY23 to FY26E from 8.5% to 12%. We like to maintain our BUY rating on the stock led by with a TP of Rs. 458 (23x of FY26 EPS).

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