TTK Prestige (TTKPT.IN) - Festive season bonanza - CSEC Research - Earnings Update

- Cons. Revenue (net of GST) stood at INR 5.45bn; due to transition into GST regime, previous quarter numbers are not strictly comparable. Domestic business revenue stood at INR5.41bn and as per management estimated the adjusted domestic revenue growth was 24% YoY. Advancement of festive season, price increase of ~4-5% in 4QFY17 and partial restocking by channel post GST has led to the robust domestic revenue growth. Exports fell by 39.6% YoY to INR 78.3mn (gross sales), however management have indicated the export growth to pickup from 1QFY19 onwards.

- In 2QFY18, volume growth across the segments was in the range of 16-20% YoY. Cooker, cookware, appliances and others reported revenue of INR 1.84bn, INR 970mn, INR 2.51bn and INR 170mn respectively. Cleaning segment continues to grow double digit and revenue stood at INR 66mn.

- Gross margin stood at 41.1%; EBITDA stood at INR 683.2mn with an EBITDA margin of 12.5%, adjusting for the onetime charge of INR 105.3mn towards non recovery of part of indirect taxes embedded in the transition stock held by the company and trade, adj. EBITDA margin stood at 14.5%.

- Adj PAT grew by 29.8% YoY to INR 505mn with Adj PAT margin of 9.3%.

Valuation: At CMP, the stock is trading at 40X and 36.6X to FY18E & FY19E earnings respectively. Owing to rich valuation, we rate the stock as an UNDERPERFORMER with a target price of INR 5,851 valuing the stock at 33X FY19E earnings. Risks: Stronger than expected recovery in the consumer sentiment and low competition in the traditional segment.

Shares of TTK PRESTIGE LTD. was last trading in BSE at Rs.6458 as compared to the previous close of Rs. 6166.95. The total number of shares traded during the day was 54693 in over 464 trades.

The stock hit an intraday high of Rs. 6599.9 and intraday low of 6300.1. The net turnover during the day was Rs. 354090910.

Source : Equity Bulls

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