TTK Prestige eyes 25% sales growth for FY15; to hike prices

TT Jagannathan, Chairman, TTK Prestige is confident of achieving 25 percent sales growth for FY15. The company has plans to launch 40 new products in the appliances space in the current financial year.According to Jagannathan, South India based sales have rebounded in the first quarter of FY15. For the compnay market share depends from category to category, for example it has around 67 percent market share in the pressure cooker segment in South India and 74 percent market share for cookware, said he.With the aluminium prices rising sharply, the company would be looking at hiking prices, said Jagannathan.

Below is the transcript of TT Jagannathan’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Latha: We saw the northern grid getting connected with the southern grid. In past conversations, you have complained about how power shortage was one of the big problems for you. Has that completely eased now, is power a non issue for you?A: I won’t say completely eased but it has eased considerably. Power is becoming less of an issue now than it was last year. Latha: How has that reflected on the P&L?A: The south sale for instance has grown robustly in the last quarter. Sonia: Can you just give us a sense of how much the business environment has improved or if it has improved substantially at all because the sense we get from a lot of people is that the sentiment has picked up but sales have not picked up on the ground?A: I would agree with that statement expect that south because the power situation has improved, south sales have picked up quite nicely. However, rest of the country it is still sluggish. To turn an economy around is not like a car, it is more like a ship; it will take a while.Latha: We were talking to much bigger consumer durable makers like air conditioners and they were telling us that they had a very good first quarter largely because of a long summer but they see that as a one-off. They don’t still see first time buyers walking into shops. What about your case because the product at least is more affordable?A: I agree that sentiment is not great. The market has not improved dramatically albeit has shown growth. We have grown 10 percent in the first quarter, August growth has been little better at 15 percent. Market is improving but like I said it will take a while for us to see the effects of the new government. Sonia: You think it would be hard for you to meet your 25 percent sales growth target for FY15?A: I don’t believe that. I believe we will achieve that.

Latha: What about margins, have you had to give up something by way of not increasing prices or even give discounts?A: That is not the case up till now. However, now aluminium price have gone up by 25 percent over the same period last year. So we are looking at price increases now. Latha: Will that dent sales or you think you can get away with it? A: It will dent sales. However, so if you were maybe getting 25 percent growth, then it will be 21-22 percent growth.Sonia: What is the overall market share that TTK Prestige enjoys now, not just in the overall market but in south as well?A: It depends upon product category. Each product category we have different market shares. Pressure cookers for instance in south we have 67 percent market share, in cookware we have 74 percent market share.Latha: The currencies should have given you some advantage in the export markets. Generally what is the export strategy?A: That is not true. Last year this time dollar was at 68. It has dropped to 60. Currently Indian rupee has strengthened. However, our export strategy is good and we are making a lot of money in export. Latha: What is the percentage of exports to domestic?A: 5 percent, it is not very large.Sonia: Any new product launches that the company has in the next 6-12 months?A: We will be launching at least 40 new products over the next six months. Latha: Broadly what categories? A: Appliances.