Buy TTK Prestige; target of Rs 920: ICICI Securities

ICICI Securities research report on TTK Prestige

TTK’s Q2FY24 primarily indicates impact of steep increase in competitive intensity. Revenues declined 13.4% YoY with likely market share loss (in our view) on subdued consumer demand and aggressive discounting by peers. We model weak performance in Q3FY24 but a recovery by Q4FY24 and H1FY25. We expect benefits of investments to be realised in FY25 and beyond. Key initiatives by TTK: (1) higher investments in Judge brand and likely market share gains at bottom-of-pyramid, (2) likely launch of premium brand to tap consumers at top end and (3) favourable base. We remain structurally positive on TTK Prestige due to high RoCE, FCF generation, established brand, distribution and strong promoter/ management background. Maintain BUY.

Outlook

We model TTK Prestige to report revenue and PAT CAGR of 4.2% and 6.2%, respectively over FY23-25. We also model the FCF generation to remain strong. We also model revival H1FY25 onwards due to favourable base and improving maturity of Judge brand. We maintain BUY rating with DCF based revised target price of INR 920 (implied P/E 44x FY25E).