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  • 29 Jul 2022
  • ICICIdirect Research

TTK PRESTIGE’S REPORTS STRONG REVENUE GROWTH BUT COST INFLATION DENTS EBITDA MARGIN

TTKPRESTIG - 879 Change: -20.95 (-2.33 %)

News: TTK Prestige’s revenue for Q1FY23 grew by 68% YoY to Rs 600 crore. On account of price hikes taken, gross margins improved 140 bps QoQ (down 260 bps YoY) to 42%. However, on account of higher than anticipated other expenses (up 10% QoQ) EBITDA margins moderated to 13.8% (down 250 bps QoQ). Absolute EBITDA grew 112% YoY to Rs 83.0 crore (three-year CAGR: 14%). On the back of a steady operational performance, PAT grew by 112% YoY to Rs 57.6 crore (three year CAGR: 16.5%).

Views: Revenue growth for the quarter was better than expectation owing to strong performance of the cooker and cookware segment. Amongst categories, on a three year CAGR basis cookware grew at the fastest rate by 18% (53% YoY), followed by cooker which grew at 11.5% (87% YoY) and appliances segment by 9% (59% YoY). During the quarter all distribution channels were active. New products launched during the quarter have been received well especially in the grinding appliances segment. TTK continues to innovate and added 25 new SKUs during Q1FY23 across all product categories. The Company continues to focus on maintaining healthy margins through improved efficiencies as well as calibrated price increases without any adverse effect on volumes and market share. The company is comfortably placed on the liquidity front and carries free cash of  Rs 595 crore which would enable it to tide over the current challenging business scenario.

Impact: Neutral.