TTK Prestige share price: Add TTK Prestige, target price Rs 1000: HDFC Securities

Securities has add call on with a target price of Rs 1000. The current market price of TTK Prestige Ltd. is Rs 792.85. Time period given by analyst is one year when . price can reach defined target.

TTK Prestige Ltd., incorporated in the year 1955, is a Mid Cap company (having a market cap of Rs 10959.52 Crore) operating in Consumer Durables sector.

TTK Prestige Ltd. key Products/Revenue Segments include Domestic Appliances and Scrap for the year ending 31-Mar-2021.

Financials

For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 710.88 Crore, down -7.76 % from last quarter Total Income of Rs 770.72 Crore and up 17.81 % from last year same quarter Total Income of Rs 603.39 Crore. Company reported net profit after tax of Rs 80.61 Crore in latest quarter.

Investment Rationale
TTK Prestige’s Q4FY22 revenue was a beat while EBITDA margin was a miss. Standalone revenue was up 17% YoY (HSIE 7%) and delivered a three-year CAGR of 13%. The revenue growth was driven by a strong performance in cookers, which were up 26% YoY (17% three-year CAGR). Gross margin contracted 501bps YoY to 40.6% (HSIE 43%). The company had taken some price hikes in Q4-end, the impact for which will be visible in the coming quarters. Tight cost control restricted the fall in EBITDA margin, which was at 16.3% (HSIE 16.9%), down 213bps YoY. EBITDA was up 3% YoY to 1,058mn (HSIE 1,002mn). The company has managed to protect its EBITDA margin in FY22 (consolidated margin at 15.6%); however, the brokerage expects the margin to trend downwards in FY23. It models single digit growth for cooker on sustainable basis, given this product is highly penetrated (90% urban penetration). It models 10% revenue CAGR between FY19-24E at company level. It projects FY23/24 EBITDA margin at 14.7/15.1% (14.9/15.6% for FY21/FY22). It maintains FY23/24 EPS estimates and value the stock at 38x P/E (40x earlier) on FY24E EPS to derive a TP of INR 1,000.

Promoter/FII Holdings
Promoters held 70.41 per cent stake in the company as of 31-Mar-2022, while FIIs owned 9.3 per cent, DIIs 13.19 per cent.