Rationale

 The ratings reaffirmation continues to factor in Hawkins Cookers Limited's (Hawkins) position as one of the leading players in the pressure cooker industry with a strong brand franchise and vast experience of the professional management. Further, Hawkins' strong pan-India distribution network has ensured a wide reach and mitigates any geographical concentration risk. The company's robust financial risk profile is reflected in its superior RoCE and strong cash generation ability, resulting in its net debt free status and strong debt protection metrics. Despite adverse effects of the COVID-19 pandemic in Q1 FY2021, the company recorded a smart recovery over the rest of the quarters, leading to a healthy revenue growth of 14% in FY2021. The same is largely attributable to expansion in sales volume, driven by a strong brand recall and a rise in cooking at home (during the pandemic-induced lockdown). The ratings, however are constrained by the vulnerability of the company's profitability to volatility in raw material prices and intense competition from other leading national and regional players as well as from the unorganised sector. The ratings are also constrained by the company's relatively concentrated product portfolio and limited market size. The company's ability to diversify its products into new categories to reduce its concentration on a single product remains a key rating monitorable. ICRA's Stable outlook factors in the company's strong brand equity and leadership position in the pressure cooker market and a strong financial risk profile, as reflected in its healthy cash generation from operations, strong debt protection metrics and a comfortable liquidity position.