TTK Prestige trading at Demand Zone

4 Mac 2022

TTKPRESTIG

TTK Prestige is among the leading brands in the kitchen equipment space, especially in the pressure cooker segment. It is the No. 1 Brand in Pressure cookers, No. 1 Brand in Cookware, No. 1 Brand in Value-added Gas Stoves, No. 1 Brand in Induction Cooktops, India’s only company to offer the complete Induction Cooking solution and it is the No 1 Brand in Rice Cookers.

Fundamentals: -

1. The product profile is diversified, with 31% of the revenue coming from pressure cookers, 15% from cookware, 14% from gas stoves, 12% from mixer-grinders, and the remainder from other kitchen and home appliances and cleaning solutions. 98% of the revenue comes from domestic sales.

2. Distribution Network
The company has more than 545 Prestige Xclusive stores in over 305 cities. 24 Regional Sales Centre and 350+ Authorized Service Centre. The number of outlets as of FY20 was 588. The network now covers 26 States and 345 Towns. The company during FY20 opened two Prestige Lifestyle Stores in Bengaluru.

3. New launch
The company launched an innovative and revolutionary range of Pressure Cookers under the Svachh platform during the second half of FY 20. The company is progressing on a new category of Cleaning Solutions. The operating subsidiary Horwood Homewares Limited introduced new products and a new category SMIDGE range. The Company launched 146 SKUs in FY20 and is geared to launch 100 new SKUs in the market during FY 20-21. TTK Prestige Limited is launching a new category - Stainless Steel Casseroles in two versions viz. Royale and Prime. Totally 7 SKUs of different sizes are being offered at the launch stage.

4. Capex
As per Long-Range Plan intend to do ₹ 200 Cr Capex over three years, the Company has spent about ₹70 Cr in FY20.

5. It is trading at a PE multiple of 36, less than 10year average PE of 42.

6. Average ROE for the last 3 and 5 years more than 15.

7. TTM Sales growth at 31% and TTM Profit growth at 88%.

8. Debt to equity at 0.06 (less than 1 is good), Interest Coverage at 61.7 (greater than 3 is good), Current ratio at 2.96 (greater than 1.5 is good).

9. Dividend Yield of 0.64% (consistent dividend payer since 2006)

The stock is currently trading at a demand zone where 3 resistances and 1 support meet. If anyone consider it for buying, put only 3% of your capital right now, buy with another 3% if it falls another 40% and invest the rest 4% (don't invest more than 10% of your entire capital in one stock) when the share closes at a 52 week high.