"Every individual, every family, every company, from time to time, goes through hard times. The hard times may be self-inflicted or imposed by external circumstances. In my experience and to my way of thinking, it hardly matters whether the hard times are the result of a fault of character or whether they are a result of the forces of history or an Act of God. What matters is how the individual or the company deals with the hard times. Whether one is overwhelmed by the misfortune or whether one survives and emerges stronger from the experience, to a great extent, depends upon how one deals with the hard times."
This is speech of Chairperson of a company having tremendious record of capital allocation, honest & intregated management, rich dividend history and having a decades Old brand which we trust in our Kitchen.
I am talking about the "Curious case of Hawkins Cooker". Company is facing different issues since a more than a year now and according to Chiarperson, going through "Hard times" or a special situation as we call in investing term.
What is problem: Lets dig Chairperson speech again: "Supply was hindered by deteriorated labour relations in our Jaunpur Factory and an order of the Punjab Pollution Control Board (PPCB), dated October 13, 2011, instructing our Hoshiarpur Factory to cease operations in view of their allegation that it was producing effluents with pollutants beyond permissible limits.”
What Management Did/Doing: Well, in this Era, Honesty is something which became undesirable and We know How our Governance is functionaing. But this problem is faced by all "Well Managed" companies like In Bajaj Auto AGM, Rahul Bajaj mentioned How Industries is facing hurdles and now Industries are forced to obey many meaningless rules, he said they will follow "letter of the law" not the "spirit of the law". In other sense this is happening in every aspect of Life where We do not follow the Spirit. Spirit has been pushed to end and Everything which matters is WINING.
Lets come to topic, So Why to blame this Old aged, MBA Educated Chairperson "Mr. Brahm Vasudeva" who wanted to be Honest and deal issues with honesty. He does not want to hire any "NIRA as Consultant". Honesty has its own price which is being paid by Company and its Shareholders since more than a year, in terms of Restricted Production, Pending Unfulfilled Orders and So Economy of the Company. But what a less price for the Own values if one believes in them. Finally theoretically Honesty has to Win! Not agree? Okay lets see what Chairperson says about dealing the issues.
Chairperson: Jaunpur Factory Issues: "Meanwhile, though there are still some sections of workmen trying to go slow, the factory as a whole is giving much better production than was the case a year ago. We are hopeful that the matter will be resolved shortly. "
Hoshiarpur Factory Issue: "The Environmental Engineer of PPCB has been directed by PPCB to visit our Hoshiarpur Factory immediately after August 15, 2012, to verify the facts and to submit a detailed report along with his recommendations. PPCB has declared that they shall decide the matter on merit based upon the report of the Environmental Engineer."
So what is there for Investors:
I was in the Hawkins AGM, and Chairperson who never speculate on any thing, told very confidently that, "All Issues pertaining to this Hard time, will get sorted out very shortly, and this short time is not in years, not even months, but is in Weeks".
Its been 4 weeks now, Any time this Special Situation will get overcome by the Company and the business can reward its patience share holders. Note it, Mind it, Read it again.. As per the Chairperson, this is one of the 4 those "hard time" for the company, and Once Company is out of that mess, That should be the Higher times for its business, so growth and hence earning to stock prices as happened in the past. Boat of Hawkins would sail quite fast after this storm!
So if you are already a share holder, Do Smile and if wanted to make some time pass till these issues sorted out, Solve this Puzzle from a Fundoo Professor: The Hawkins-Unitech Puzzle
Note: These are personal views, please as always, educate and investigate self before putting your hard earned money. This article is just for education and sharing purpose!