Please refer to important disclosures at the end of this report
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
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.
CMP `3,218
Reuters Code
BSE Sensex
Consumer Durables
Market Cap (` cr)
52 Week High / Low
Avg. Daily Volume
Face Value (`)
Jaikishan Parmar
022 3935 7600 Ext: 6810
Hitachi Air Conditioning India Ltd.
Others | Consumer Durables
Mar 06, 2020
Hitachi Air Conditioning India| Consumer Durables
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Disclosure of Interest Statement Hitachi
1. Financial interest of research analyst or Angel or his Associate or his relative No
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3. Served as an officer, director or employee of the company covered under Research No
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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)