Geojit's research report on TTK Prestige
Despite high base, Q4FY22 revenue grew by 17%YoY (43%YoY in Q4FY21) aided by price hike and healthy growth across channels. Commodity price inflation impacts cost of production, but the company has taken price hikes in recent quarters to reduce margin pressure. Gross margin declined by 540bps to 40.3% (42.4% QoQ) but due to other cost savings, EBITDA margin declined only 240bps to 15.6% YoY. TTK targets Rs.50bn revenue by FY25 (from current 27bn) and has almost doubled its capacity for cookware segment and has significantly expanded its distribution in high growth areas. TTK acquired 40.8% stake (Rs.20cr) in Ultrafresh Modular Solutions (Modular Kitchen business), expects market size of ~2,500cr. Rising inflation can impact demand & margins in the short-term. So, we reduce our valuation to 32x (5Yr avg=38) on FY24E EPS.
Outlook
TTK Prestige Ltd (TTK), the flagship company of TTK group, mainly focuses in the Kitchen Appliances segment. The company has 5 manufacturing plants and strong distribution networks, including 665 Prestige Xclusives. We downgrade our rating to Accumulate factoring on the current high inflation and margin pressure with a revised Target price of Rs. 885 (from Rs. 975).
More Info
At 14:38 hrs TTK Prestige was quoting at Rs 790.80, up Rs 22.30, or 2.90 percent.
It has touched an intraday high of Rs 794.00 and an intraday low of Rs 772.90.
It was trading with volumes of 1,111 shares, compared to its thirty day average of 7,492 shares, a decrease of -85.17 percent.
In the previous trading session, the share closed down 0.07 percent or Rs 0.50 at Rs 768.50.
The share touched its 52-week high Rs 1,269.60 and 52-week low Rs 748.55 on 14 December, 2021 and 17 June, 2022, respectively.
Currently, it is trading 37.71 percent below its 52-week high and 5.64 percent above its 52-week low.
Market capitalisation stands at Rs 10,961.60 crore.For all recommendations report, click here
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