1
Please refer to important disclosures at the end of this report
1
1
Johnson Contls-Hitachi Air Conditioning India is engaged in the business of
manufacturing, selling and trading of Hitachi brand of Air conditioners,
refrigerators, chillers and VRF (variable refrigerant flow) systems. It is one of
the market leaders in the RAC segment with 12% share and has been in
India for more than 30 years. The company has consistently grown and its
15 years CGR stands at 15.3% in revenue.
JCH has one of the largest air conditioning manufacturing facilities in India
with a strong R&D team, after it recently set up a Global Development Centre
(GDC) in Kadi, Gujarat, at a capex of Rs 1.5bn. This global R&D centre for
PAC and RAC will provide design and development services to JCH
companies in South-East Asia, Middle East and Europe. Further, it is
planning to: (1) ramp up its presence in the mass segment, (2) move up the
value chain in more than 2tonne ACs where not many players are present,
(3) make aggressive and innovative product launches, (4) increase its
distribution strength in south and west India, and (5) reinvent its brand
Hitachi.
On the financial health front, the company has a very strong balance sheet
with reduction in debt burden over the years from 0.6x debt-equity ratio in
FY14 to 0.2 in FY19. The company has also managed its capex investments
with an asset turnover of 6.2x. Tthe stock trades at 12.1x of book value and
delivers ROE of 15%. Hence BUY.
BUY
CMP `3,218
0.8
Reuters Code
JCHA BO
JCHAC IN
BSE Sensex
38,471
Nifty
11,269
Consumer Durables
Market Cap (` cr)
8,748
52 Week High / Low
3438/1470
Avg. Daily Volume
1,808
10
Face Value (`)
Jaikishan Parmar
022 – 3935 7600 Ext: 6810
jaikishan.parmar@angelbroking.com
Hitachi Air Conditioning India Ltd.
Others | Consumer Durables
Mar 06, 2020
2
Hitachi Air Conditioning India| Consumer Durables
2
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Hitachi
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)