The company has lined up a capital expenditure of Rs 250 crore for the next three years
Kitchen appliances maker and owner of the Prestige brand, TTK Prestige, is looking to be Rs 5,000-crore company in five years. In an interaction with Moneycontrol, Chandru Kalro, Managing Director, TTK Prestige said the company has lined up a capital expenditure of Rs 250 crore for the next three years to enhance the capacity in India.
“Our next round of capital expenditure (Capex) cycle is on. We are looking to spend about one-third of the Rs 250 crore capex every year for the next three years,” he said.
While Prestige is a market leader in induction cooktops, rice cookers, and pressure cookers, Kalro said they are also working towards increasing their business from the mixer-grinder segment.
For Q1FY19, TTK Prestige's profit was Rs 35.9 crore. In the June quarter last year the company had posted a one-time exceptional income of Rs. 128.96 crore on account of monetisation of property development rights. Net of this exceptional item the profit was Rs 27.02 crore for that quarter.
Kalro said the goods and services tax (GST) did not have an impact on the business and that it has completely settled down at present. “We saw a growth in all the segments as well as the geographies. We hope to carry it forward."
He explained the Pradhan Mantri Ujjwala Yojana that aims to provide clean cooking fuel (LPG) to women, has been another factor aiding rural demand to pick up.
There has been a ‘deliberate premiumisation’ of Prestige as a brand, according to Kalro. He added they have positioned it as a mass-premium brand.
The company acquired UK-cookware brand Horwood Homewares in April 2016. Last year, the latter’s brand ‘Judge’ was launched in India. Kalro said that this brand will offer the SEC B and C segments across smaller towns, quality kitchen solutions at lower price points.
“Judge is our defense strategy where there is a danger of losing market share due to pricing. But wherever there is an opportunity, we will push Prestige as the first option,” he added.
On the other hand, Prestige products would be sold through the Horwood Homewares distribution channel globally. The products, he said, would primarily constitute pressure cookers and cookware.
In the next five years, Kalro said the aim was to touch revenues of Rs 5,000 crore from Rs 2,000 crore now. This, he said, would be through a mix of organic and inorganic growth.
“When it comes to inorganic growth through acquisitions, we would look at those business segments where we do not have a footprint,” he added.In product distribution, 90 percent of the revenues come in from brick-and-mortar stores while 10 percent comes from the online channel.