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Analysis: Haldyn Glass Limited

Modified on January 2, 2019

This article provides fundamental analysis of Haldyn Glass Ltd, an Indian company manufacturing bottles for food, pharmaceutical, beverages and liquor industries.

Haldyn Glass Ltd  

One of the readers, Venkatasubramaniyan Natarajan, has done an excellent analysis of Haldyn Glass Ltd. He has captured almost all the pertinent points with respect to company analysis. His analysis can serve as a template for any investor wishing to analyse a stock. I compliment Venkatasubramaniyam for his analysis and wish him good luck for his investing journey.

Haldyn Glass Ltd analysis research report


Q: Hi Vijay! Thanks for guiding novice and young investors like me to understand the market. I have done an analysis of glass container maker Haldyn Glass Ltd and I want to know your views.


Financial Analysis of Haldyn Glass Ltd:

1. Sales growth is 13% CAGR for the 10 yrs, 2013 experienced a dip of -14% but recovery started in the next year by 5%, seems there is not much to worry for a sales dip in a single year.

2. Maintaining healthy margins, OPM – 20-25%, NPM – 8-14%, though the fuel prices have hit lower levels now, the supply cut by GAIL has already impacted the production reduction by 20%, which may have an impact on margins by this Q4.

3. Tax – Yes paying

4. Interest coverage – Virtually debt free company, paid off nearly all debts in 2012, 2013

Balance sheet analysis:

1 . D/E leverage – Company has constantly reduced its D/E from 2.4 to 0 – a positive sign

2. M.Cap is 16% greater than the total shareholders fund available as on today.

3. CR – Maintaining a good CR of 2 +/- 0.2

Cash flow analysis:

1. Company is having a positive and increasing cash flow for the past 10 yrs (except 2013, but no negative).

2. Paid off nearly all its debt from its own cash flow and keeping investments within control.

Relative valuation:

At the current levels compared to its peers, the company looks cheaper.

Business analysis of Haldyn Glass Ltd:

1. No significant moat in business found as the company is having a nearly same amount of CAGR sales.

2. Sales increased by 13% (10 yrs CAGR) and Net profit after tax improved 16%

3. Cumulative PAT – 121Cr, Cumulative CFO – 169Cr – But Days Sales Outstanding is slightly higher than the peers – Needs improvement.

4. Value creation for shareholders – 1.17

Management analysis of Haldyn Glass Ltd:

1. There company has been alleged for making a counterfeit product long years ago.

2. Succession plan details not available as of now.

3. Management has reduced the debt

4. Improved the production capacity

5. Increasing dividend payout.

6. Management remuneration is increasing – Not flexible with the profit.

7. Promoter holding is 52% and 0% FII and DII.

This is a financially healthy company with a good customer base and a possibility to explore more customers. Will be a buy on dips? – Expecting the reply in your style 🙂


Author’s Response

Thanks for writing to me! I am very happy looking at your analysis. You are approaching stock selection in a very methodical way as it should be done. Please accept my congratulations!

You have made correct observations regarding Haldyn Glass Ltd. It is a fundamentally strong company with good profitability and nil debt. It has high cash on its balance sheet as its operations are generating about INR 18-20cr. of cash each year.

I had Haldyn in my portfolio since December 2012 till Oct. 2014. I have detailed my investment in Haldyn in article:

Trading Diary of a Value Investor

Reasons for my purchase decision of Haldyn Glass Ltd are very well covered in your analysis.

Reasons for my sell decision of Haldyn are also covered in your analysis. It was primarily due to subsidized gas supply cut enforced by GAIL. I analysed and found that if Haldyn continues to use the same amount of gas it had used in FY14, then each $1 of gas price hike would increase expenses by INR4cr. Such huge cost hike would be sufficient to wipe out the profitability of about INR 15-20cr. per year. In Oct. 2014, subsidized Gas was about $4-5 per mmbtu and market price was $12-14 per mmbtu.

The lobby fighting against the gas cut,South Gujarat Small Gas Consumers Association, does not bear very high influence. It could not affect the decision of gas supply cut. It resulted in plant shutdowns by most of the affected players. Haldyn cut capacity by 20%.

In Dec 2014 quarterly results, despite 20% capacity reduction and more than 50% fall in crude prices, Haldyn’s fuel & power costs have increased. It means that company is yet to find solution of any alternate fuel, which can keep it competitive.

I believe that business dynamics of Haldyn have undergone a change since Oct. 2014 and past financial numbers, though good, may not reflect the future strength.

One should wait until the fuel arrangement issues are settled at Haldyn before making any investment decision in Haldyn.

Hope it helps!




  • The above discussion is only for educational purpose to help the readers improve their stock analysis skills. It is not a buy/sell/hold recommendation for the discussed stocks.
  • I am registered with SEBI as an Investment Adviser under SEBI (Investment Advisers) Regulations, 2013.
  • Currently, I do not own stocks of the companies mentioned above in my portfolio.

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