Geojit Financial Services
Target: ₹885
CMP: ₹786.10
TTK Prestige Ltd (TTK), the flagship company of TTK group, mainly focuses in the Kitchen Appliances segment. The company has five manufacturing plants and a strong distribution network, including 665 Prestige Xclusives. The company has introduced 28 new SKUs during the quarter and has slated for the launch of about 33 new SKUs for Q1-FY23 (127 in FY21).
Despite high base, Q4FY22 revenue grew by 17 per cent year-on-year (43 per cent year-on-year in Q4-FY21) aided by price hike and a healthy growth across channels.
Gross margin declined by 540 bps to 40.3 per cent (42.4 per cent quarter-on-quarter) but due to other cost savings, EBITDA margin declined only 240 bps to 15.6 per cent year-on-year. Exports continued good performance, and the company targets to double its exports.
TTK targets ₹5,000 crore revenue by FY25 (from current ₹2,700 crore) and has almost doubled its capacity for the cookware segment and has significantly expanded its distribution in high growth areas. It added over 2,000 outlets in FY21 and looking to enhance further in Tier-II/III cities. All these initiatives will support market-share gains.
The company acquired a 40.8-per cent stake (₹20 crore) in Ultrafresh Modular Solutions (modular kitchen business).
Short-term demand and margin outlook has dimmed due to current sharp increase in inflation. However, long-term demand will be supported by GoI’s strong thrust to revive the economy, and TTK’s strong brand-recall.