Buy TTK Prestige, target price Rs 1050: ICICI Securities

ICICI Securities has buy call on TTK Prestige with a target price of Rs 1050. The current market price of TTK Prestige Ltd. is Rs 790. Time period given by analyst is one year when TTK Prestige Ltd. price can reach defined target.

TTK Prestige Ltd., incorporated in the year 1955, is a Mid Cap company (having a market cap of Rs 11149.42 Crore) operating in Consumer Durables sector.

TTK Prestige Ltd. key Products/Revenue Segments include Domestic Appliances and Scrap for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 770.72 Crore, down -11.06 % from last quarter Total Income of Rs 866.55 Crore and up 4.95 % from last year same quarter Total Income of Rs 734.37 Crore. Company reported net profit after tax of Rs 90.70 Crore in latest quarter.

Investment Rationale
TTK has been able to protect margins as well as market shares via judicious price hikes and cost-saving initiatives. That’s the key insight from the conference call with TTK Prestige. Other highlights (1) The company is in investment mode for its chimney business and will steadily expand the distribution network, (2) the company reiterated its focus on brown goods. It has also rolled out water purifiers. However, it does not want to compete in white goods segment. (3) TTK does not want to discount its premium image and it will continue to invest 6-7% of net sales on brand-building efforts. The brokerage models TTK Prestige to report revenue and earnings CAGR of 15.9% and 17.6% over FY21-FY24E with: (1) strong volume growth, (2) price hikes and (3) market share gains from unorganized sector. Post 31% stock price correction over past six months, the brokerage upgrades it to BUY with a DCF-based TP of Rs1,050 (implied P/E 39x FY24E EPS).

Promoter/FII Holdings
Promoters held 70.41 per cent stake in the company as of 31-Dec-2021, while FIIs owned 9.57 per cent, DIIs 13.09 per cent.