Buy TTK Prestige; target of Rs 825: ICICI Securities

ICICI Securities's research report on TTK Prestige

Highlights: (1) TTK reported revenue decline of 3.6% in FY24 primarily due to weak consumer demand. However, there was revival in H2FY24 with 3.6% revenue growth YoY. We believe it indicates higher growth in FY25. Favourable base of FY24 will also aid in FY25. (2) TTKPT has likely defended its market share across product categories despite higher- competitive pressures over past three years. (3) Strong momentum in alternative channels has partly offset weakness in general trade. (4) Client additions in exports segment may aid in delivering higher growth in FY25 YoY. (5) Gross margin has largely remained intact despite higher sales promotion expenses. We remain structurally positive on TTK Prestige led by its high RoCE, FCF generation, established brand, distribution and strong promoter background.

Outlook

We model TTKPT to report revenue and PAT CAGRs of 9.9% and 17.6%, respectively, over FY24-26E. We also model FCF generation to remain strong. We envisage a revival in performance H2FY25 onwards led by favourable base and improving maturity of Judge brand. We maintain BUY on TTKPT with a revised DCF-based target price of INR 825 (earlier TP: INR 920; implied P/E 37x FY26E).