Reduce TTK Prestige; target of Rs 725: HDFC Securities

HDFC Securities' research report on TTK Prestige

TTK Prestige’s Q1FY24 revenue was in line with our estimates falling by 8% YoY; however, it disappointed on EBITDA/PAT, which fell 22/12% YoY. Domestic revenue (down 8%) and exports (down 12%) continued to remain weak on (1) demand softness due to an inflationary environment; (2) consumer wallet share moving away from kitchen appliances; (3) high base of LY; (4) pricing-led competitive intensity; and (5) weak global macroeconomic environment. Gross margin expanded by 110bps YoY to 43%, while EBITDAM fell 210bps YoY to 11.8% (HSIE 13.5%) on negative oplev. With no near-term trigger in sight and a high base, we expect near-term demand to remain soft. We expect positive revenue growth only from Q3 onwards.

Outlook

We maintain our estimates and value the stock on 30x Jun-25 EPS to derive a TP of INR 725. Maintain REDUCE.