TTK PRESTIGE: CMP: 698 | LONG TERM GR: 12% | CYEAR:(-5%) | Q3_FY_24 RESULT
(1ST Quarter with +ve growth after declining of 2 quarters & mutated 2 Post_Covid)
Company: TTK Prestige Limited is an Indian company that manufactures kitchen appliances and cookware, under the "Prestige" and "Judge" brand. The company is best known for its pressure cookers. TTK Prestige was incorporated as a private limited company on October 22, 1955, in Madras (now Chennai) under the name TT Private Limited. It began manufacture of pressure cookers in 1959 with technical collaboration from Prestige Group of the United Kingdom. The company went public in 1988, and changed to its present name in 1994. It is known for its innovative marketing strategy, be it distributing pamphlets from helicopters in the fifties or introducing the exchange scheme.
History: Sales and Profits during the year 2001 were 139 Cr and 1.6 Cr. The company was able to grow today with sales & Profits of 2800 Cr and 260 Cr. This is the growth of 20X in Sales while 160X in profits, hence if invested 20 years back we saw the price appreciation of around 500X and the dividends today we would receive would be around 4X to the invested amount. Yes, huge wealth has been created.
Current Trend: The trend from last year Q3 was in declining mode which even continued till Q2_fY24 where we saw decline in sales growth by 10%. This q3_fy24 was the 1st quarter with +ve turnaround after 2 declining quarters in the row and 4 quarters of muted growth. All channels were active throughout the quarter though the overall demand continued to be subdued. Festival season also has shifted to quarter 3 which made this quarter further weak for the consumer durable industries. Due to sluggish demand excessive discounting continued during this quarter at certain product levels by some brands. We saw a decline in sales by 5% which was yet better than what estimated due to good to average Q3. The cost fell by just 2%. Hence we saw the pressure in profit margins which contracted by 90 basis points y-o-y and 10 basis points q-o-q. Hence the profits has fallen by15% again which was better than the earlier trend. Moving further we may see 2-3% decline in sales and 14% decline in Profits this year.
Considering the 4 quarters of muted growth along with 2 quarters of completely declining sales growth the stock is trading near a 52 week low even in a good market. After the 1st good quarter we may see the trend of improvement continue but strong growth could still take 2-3 more quarters. Hence, New buying could be done during such a fall near 693 while targets could be set towards 1419 in the next 2 years but this will be seen only once growth of 12-15% is visible. Till the growth returns pressure will be there in the share price.
Long term: we may see the company grow by 12% sales and profits in future. This will help TTK Prestige to reach landmark sales of 5000 Cr till 2030. Consistent growth and Profits can be expected from this debt free company.
20 Years back just 3% holding with the MF & FII were 0%. Today we can see that this strong company where 70% holding is with promoter itself the MF and insurance companies hold around 14% while FII hold around 9%. SBI MF just added around 32 lakh shares last year near the price of 830 while again they added 9.5 Lakh shares just this month.
Disclosure: This document is not prepared for any recommendation; this is prepared for educational purposes.
