Chennai floods hampered ops; could have grown by 20%: TTK

Kitchen appliances company, TTK Prestige has reported a revenue growth of 16.5 percent to Rs 447.8 crore for the third quarter of this fiscal. However, margins and net-profit have missed street estimates.

TT Jagannathan, Chairman of TTK told CNBC-TV18 that the revenues would have grown by 20 percent had the Chennai floods not impacted operations.He further informed that the cookers and cookware segment grew by 11 percent while the appliances segment saw a 28 percent growth for this quarter.Below is the transcript of TT Jagannathan’s interview with Reema Tendulkar and Nigel D’souza on CNBC-TV18. Reema: Could you walk us through the topline. 16.5 percent growth is better than what we have seen in the prior quarter. Was it on account of the festive season sales? Was there any impact of the Chennai floods and do you believe this 15-16 percent revenue growth is sustainable in the coming quarter? A: Remember that the festival season was this year and last year also. That is not why 16 percent growth came. There are green shoots in the markets certainly. And if not for the Chennai floods, we would have grown by 20 percent. Nigel: Could you give us a few details and what was the growth in the cookers, the cookware as well as appliances segments? Could you give us those individual numbers? A: Cookers and cookware grew by about 11 percent. Nigel: And what about the appliances segment? A: Appliances by about 28 percent. Reema: 10 percent? A: 28 percent. Reema: Let me come back to that point that you made about Chennai. Your revenues would have been close to about 20 percent, if it was not for the Chennai floods impact. Did it have an impact on the margins as well and if yes, if you could walk us through, were there any pressures, what aided the margins? Just take us through the key factors behind the margins this quarter. A: Whenever the sale is impacted, the margins do go down. So, margins would have been better if Chennai had not had floods. Reema: Is there any way to quantify if what the Chennai floods impact would have been on the margins? A: I do not have that detail in my head right now. Nigel: Could you tell us. We were just looking through your last quarter’s presentation that you have given analysts. Your non-south markets grew pretty well while southern markets continue to be sluggish. This time around, has anything changed over there? A: Obviously, it has become worse because of Tamil Nadu. Non-south has done much better and south markets, Tamil Nadu has pulled it down. Nigel: So, how much does your non-south market currently contribute to your total topline? A: 53 percent. Reema: So, does that mean we should start expecting 20 percent growth in the coming Q4 quarter that we are in because there are green shoots in the economy? A: That you will have to ask the government. Reema: I meant the momentum that you see or you saw in the prior quarter, it has sustained even now? A: I am not able to predict whether it will sustain in the next quarter. Reema: In terms of you advertisement spends, was that one of the reasons why there was margin compression, or it is only because of lower topline. Was you margin expansion really restricted because of higher advertisement spends in this past quarter? A: Advertisement is at 6 percent of sales and it does not compress margins.