TTK Prestige - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 7900; MCap: Rs. 10949 crore)

TTK Prestige reported yet another solid operational performance with results coming in above our estimates across all parameters. The key highlight of the results was better than anticipated gross margins (despite recent increase in RM prices) which resulted in company reporting its highest ever EBITDA margin in Q4FY21.

Q4FY21 Earning Summary (Standalone)

- TTK reported healthy revenue growth of 44.7% YoY (2-year CAGR: 6.4%) to Rs. 554.9 crore (I-direct estimate: Rs. 518.2 crore), partially attributable to the benign base (revenue decline of 21%). Domestic kitchen and home appliance demand continued to be encouraging as people were working from home most of the time. Domestic sales grew by 41.5% YoY to Rs. 377 crore, whereas exports witnessed sharp increase of 218% YoY to Rs. 21.9 crore. On the segmental front, cooker (31% of sales), cookware (16% of sales) and appliances (48% of sales) categories registered strong revenue growth of 49%, 67% and 34% YoY, respectively

- Despite increase in RM prices, gross margins improved by 210 bps YoY (410 bps QoQ) to 45.6%, largely on account of price hikes and better product mix. Owing to positive operating leverage (employee and other expenses as a % to sales down by 245 bps and 480 bps YoY, respectively) TTK reported one of its all-time high EBTDA margins of 17.4% (up 930 bps YoY, 110 bps QoQ)

- On the back of healthy operational performance and exceptional gain worth Rs. 11.9 crore (reversal of provision for export obligation made in the previous years), ensuing PAT stood at Rs. 82.4 crore (I-direct estimate: Rs. 54.5 crore) vs. Rs. 20.9 crore in Q4FY20

The company continues to remain positive both in terms of sales and profits notwithstanding widespread lockdown. From the experience of the previous lock down the company has been adequately geared up to ensure that the lockdowns do not severely affect the operations that are possible during current period as well as post lockdown period. It continues to carry substantial free cash worth Rs. 535 crore.

We will get further clarity on the numbers after a detailed interaction with the management during a conference call today. We will release a detailed note thereafter.

Shares of TTK PRESTIGE LTD. was last trading in BSE at Rs.8390 as compared to the previous close of Rs. 7359.1. The total number of shares traded during the day was 10782 in over 3786 trades.

The stock hit an intraday high of Rs. 8659.15 and intraday low of 7378.2. The net turnover during the day was Rs. 86751883.

Source : Equity Bulls

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