HomeFinanceAnalyst Corner – TTK Prestige: Maintain ‘buy’ with unchanged TP of Rs 9,897

Analyst Corner – TTK Prestige: Maintain ‘buy’ with unchanged TP of Rs 9,897

On going via the FY21 annual report, we keep our positive stance on TTK Prestige. The corporation has emerged stronger in FY21 and the development momentum would continue in FY22 as solution variety and geographic attain continue expanding pan-India, supported by SKU expansion. Growth in cleaning options can be higher as the corporation intends this brand to be the initially across all India in this category, on levering its promoting network and brand proposition. Exports are a different development lever, which can provide.

Innovation continues unhindered regardless of FY21 getting difficult: Innovation and comfort look to be crucial differentiators for TTK and have supported development in an particularly competitive market place. The trend continued unhindered in FY21 as the company’s complete variety of stress cookers was upgraded to the Swatch platform. Also, TTK entered casseroles in FY21. It launched 127 SKUs in FY21 and plans to launch a different one hundred in FY22.

Exports on a spree / import dependence getting decreased in FY21: TTK is also keen on ramping up exports as numerous worldwide brands, which depended on China, are diversifying their provide chains. FY21 exports have been Rs 714million, up 70% y/y on the reduce base. Effective Oct’20, TTK stopped imports from China, resulting in non-availability of some SKUs in Q2 FY21. However, it plugged provide-side constraints by growing capacity and constructing a provide chain in India.

Valuation: In preparing this note, we have not altered our estimates. We keep our ‘buy’ recommendation on the stock with an unchanged target cost of Rs 9,897, (37x FY23e EPS of Rs 267.50). At the CMP of Rs 8,529, the stock trades at 41x/ 32x FY22e/FY23 EPS of Rs 206/267.50. Risks: Constrained demand for kitchen appliances, which could influence the company’s domestic business enterprise development prospects. Unfavourable sentiment across the United Kingdom, which could hurt the demand prospects of its subsidiary, Horwood.

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