TTK Prestige Ltd. share price target

TTK Prestige recently held a conference call to give an update on the business performance and to analyse the prospective impact of Covid-19. The company is constantly assessing the impact of Covid-19 but cannot quantify the real magnitude of the outbreak at the moment as it is yet to peak out. In the recent market fall, TTK Prestige witnessed significant correction of ~26%. With earnings in the short-term expected to be negatively impacted, TTK through its strong promoter pedigree and brand patronage...

Background: TTKPT broadly operates under 3 major segments - Pressure Cooker & Pans, Non-stick Cookware and Kitchen Electric Appliances. TTKPT enjoys high brand recall and they spend ~7.2% of their annual sales for brand building and promotional activity, which enables them to dominate most of the segments in which they operate. TTKPT has a market share of ~60% in the outer-lid pressure cooker, ~15% in inner-lid pressure cooker within the organized market and in Induction cook-top space they enjoy a market share of about ~25%. 80% of sales are from products introduced in the last 3 years. TTKPT has network of 65,000...

Focus on product innovation to capture market share On the segmental front, cookers segment reported revenue de-growth of 7% YoY to | 158.0 crore. The management indicated that while marginal volume growth was visible in the cookers segment, adverse product mix had a negative impact on absolute value growth. TTK in the quarter launched Svachh' an innovative range of pressure cookers that is the first no mess' pressure cooker in India. The new range has received positive traction. However, to ensure clearing of old inventory, primary sales of new models...

| 182.0 crore in Q2FY20. The company indicated that the rural revenue was impacted owing to restriction on Non-Banking Finance Companies (NBFC) to do trading activities for consumer products. Earlier NBFC used to buy from company and sell the products in rural areas but after the restriction on NBFC, the company has to reach the rural areas through own distribution channel which is taking longer time and impacting the revenue growth. Appliances (50% of revenues) and cookware (15.0%) registered revenue growth of 9% and 7% to | 279 crore and | 95 crore, respectively in Q2FY20....

Background: TTKPT broadly operates under 3 major segments - Pressure Cooker & Pans, Non-stick Cookware and Kitchen Electric Appliances. TTKPT enjoys high brand recall and they spend ~7.2% of their annual sales for brand building and promotional activity, which enables them to dominate most of the segments in which they operate TTK's volume / value market share (in general trade) for pressure cookers was 28% / 33% respectively and in cookware volume / value stood at 33% / 40% respectively. In glass stove / mixer grinder and induction cook top it stood at 18% / 8% / 29% respectively. TTKPT has network of 65,000 outlets (direct touch point:...

Sector: Consumer Discretionary /Mid-Cap | Earnings Update 4QFY19 Background: TTKPT broadly operates under 3 major segments - Pressure Cooker & Pans, Non-stick Cookware and Kitchen Electric Appliances. TTKPT enjoys high brand recall and they spend ~7.2% of their annual sales for brand building and promotional activity, which enables them to dominate most of the segments in which they operate. TTKPT has a market share of ~60% in the outer-lid pressure cooker, ~15% in inner-lid pressure cooker within the organised market and in Induction cook-top space they enjoy a market share of about ~25%. 80% of sales are from products introduced in the last 3 years. TTKPT has network of 65,000 outlets (direct touch point: 16,000) in India. They compete with major players like Bajaj Electricals, Hawkins, Preethi, Philips, Sunflame, Faber, Elica etc....

On the segmental front, appliances (50% of revenues) and cookers (31.0%) registered revenue growth of 11% and 5% to | 223 crore and | 138 crore, respectively in Q4FY19. Cookware division (15% of revenue) reported revenue de-growth of 4% YoY to | 66 crore. The management highlighted that mixer grinders (19% to appliance revenue) and small appliance categories have continued to witness robust growth. For Q4FY19, slowdown in rural consumption led to muted growth in cooker and cookware segment, but revival trends were observed in Q1FY20. While prices of key raw material...

TTK Prestige on March 22, 2019 made an announcement to consider issuing bonus shares, subject to the approval of the Board of Directors, shareholders and regulatory provisions. The Board recommended the issue of bonus shares in proportion of one bonus share (face value of | 10 each) for every five equity shares held. The record date for the same is May 16, 2019 while ex-date for the same is today i.e. May 15, 2019. Consequently, the TTK Prestige share price has dropped to | 7400/ share from | 8880/share. Our target price has also been revised to | 6745/share from the earlier...

ICICI Securities Ltd | Retail Equity Research TTK reported robust revenue growth (net of discounts) of 20.5% YoY to | 552.0 crore (I-direct estimate: | 549.9 crore). The healthy growth can be attributed to buoyant consumer sentiment and a shift of the festive season. Domestic sales grew 23% YoY to | 588 crore while exports grew 14.4% YoY to | 9.6 crore EBITDA margins for the quarter expanded 100 bps YoY to 15.5% (Idirect estimate: 14.5%) mainly on account of a favourable product mix and lower other expenses. Higher employee expenses (up 30%...