Geojit's research report on TTK Prestige
TTK Prestige Ltd (TTK), the flagship company of the TTK group, mainly focuses on the kitchen appliances segment. The company operates five manufacturing plants and has strong distribution networks. We revise our target price to Rs. 857 (from Rs.1,025), factoring lower volumes and margins, but upgrade to BUY rating due to lower valuation. Revenue declined by 9%YoY in Q3FY23 due to tepid demand amidst inflation and a shift in festival season. For 9MFY23, growth was 7%YoY. Operating margin declined by 550bps YoY to 11.4%. Margin pressure is expected to reduce in the coming quarters as input prices declined. Ultrafresh, the recently acquired modular kitchen business has recorded a sale of Rs.17.6cr in 9MFY23. TTK has added 52 new stores (total 134 stores now) and expects ~ Rs200cr in the next 3-4 years. TTK aims to increase revenue to Rs.50bn by FY27 through organic & inorganic routes. TTK has doubled its capacity for the cookware segment and has significantly expanded its distribution networks. Expect Revenue/PAT to grow at 10%/17% CAGR over FY23E-FY24E. We value TTK at 33x FY25E EPS (5Yr avg=37).
Outlook
The stock currently trades at ~28x 1Yr Fwd P/E. We value TTK at 33x FY25E EPS to arrive at a revised target of Rs. 857, upgrade to BUY rating due to the correction in valuation.
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