TTK Prestige Limited - First quarter results : Q1 FY 2013 + ANNUAL REPORT 2011-12 EXCERPTS - consistently good performances - Future Promising

TTK Prestige Limited

First quarter results : Q1 fy 2013

& ANNUAL REPORT 2011-12 EXCERPTS

Financial Results of TTK Prestige for the First quarter ending June 2012 are analysed below .

HIGH LIGHTS

Net Sales for Q1 FY 12 stands at Rs.302.53 Cr; up by 30.13% from Q4 FY 12 (Rs.232.48 Cr); and up by 29.76% from Q1 FY 12 (Rs.233.14 Cr).

Total Expenditure for Q1 FY 12 stands at Rs.256.75 Cr; up by    26.58% from Q4 FY 12 (Rs.202.83 Cr); and up by 30.28% from Q1 FY 12 (Rs.197.08 Cr).

Profit before Interest, Dep. & Taxes      for Q1 FY 12 stands at Rs.45.78 Cr; up by          54.4% from Q4 FY 12 (Rs.29.65 Cr); and up by 26.96% from Q1 FY 12 (Rs.36.06 Cr).

Net Profit  for Q1 FY 12 stands at Rs.30.68 Cr; up by 55.42% from Q4 FY 12 (Rs.19.74 Cr); and up by 21.07% from Q1 FY 12 (Rs.25.34 Cr).

Diluted EPS for Q1 FY 12 stands at Rs.27.1 ; At Rs.17.44 for Q4 FY 12; at Rs.22.38 for Q1 FY 12. The FY 2012 EPS was Rs.100.13.

The Paid up equity is just rs.11.32 Cr and the Public shareholding is as low as 25.08%. The Face Value is Rs.10.

The annualized EPS works out to Rs.108.4.

52 week high/low price : 3761.90/2161.00; Current MP is around Rs.3655. The current PE Ratio works out to 33.72.

The company’s performance is very good, and its future outlook also is very bright - considering its product range and expansion Plans (see Directors' report below). 

But, part of the High Valuation seems to be due to LOW LIQUIDITY in the share.

RESULTS TABLE

INDICATING  Q1 FY13;QoQ % DIF; Q4 FY 12; YoY % DIF; AND Q1 FY 12. Amounts are Lakhs.

TTK Prestige	30-Jun-12	QoQ % dif	31-Mar-12	YoY % dif	30-Jun-11
Net Sales	30253	30.13	23248	29.76	23314
Total Expenditure	25675	26.58	20283	30.28	19708
Profit before Interest, Dep. & Taxes	4578	54.4	2965	26.96	3606
Net Profit	3068	55.42	1974	21.07	2534
Diluted EPS	27.1	55.39	17.44	21.09	22.38
Net Sales	30253	30.13	23248	29.76	23314
Cost of materials	7940	56.58	5071	54.14	5151
Purchases of SIT	9999	2.03	9800	41.77	7053
Employee benefits	2017	17.82	1712	25.98	1601
Depreciation	204	4.62	195	90.65	107
Other expenses	6161	37.89	4468	6.17	5803
Total expenses	25675	26.58	20283	30.28	19708
Profit  before tax1	4386	50.83	2908	20.76	3632
Net Profit	3068	55.42	1974	21.07	2534
Face Value of Share (Rs )	10	0	10	0	10
Paid-up Equity	1132	0	1132	0	1132
Diluted EPS	27.1	55.39	17.44	21.09	22.38
Public Shareholding (%)	25.08	0	25.08	0	25.08

DIRECTORS’ REPORT

FOR 2011-12 (EXCERPTS)

FINANCIAL RESULTS   (Rupees in lakhs)

Ø  ITEM :: 2011-12 :: 2010-11

Ø  Sales (inclusive of excise duty)  :: 112271 :: 77558

Ø  Tax Provision  :: 4988 :: 3660

Ø  Net Profit ::  11336 :: 8375

REVIEW OF PERFORMANCE

• Sales grew by 44.75%    

• All time high absolute value growth - around Rs.347 crores

• Profit before extra-ordinary items increased by 35%.

• Profit after tax increased by about 35.35%.

• Operating EBIDTA margin was 15.6% - compared to 16.2 % in previous year.  Minor drop in margin was largely contributed by sharp rupee depreciation.

• EPS rose to Rs.100.13 from Rs.73.98  -  a growth of 35%

• Ratio of Operating EBIDTA/ Operating Capital employed (excluding CWIP) in Kitchen Segment was more than 60% notwithstanding substantial additions to asset base for future needs of production.

ALLIANCES

(i) The Company has concluded agreements with World Kitchen, USA which will enable it to enter  high-end Tableware/Cookware and Store-ware segments. Its  basket of products will henceforth include international brands such as Corelle,  Corningware, Pyrex, Vision and Snapware. Except Corelle, all other products will carry the brand of Prestige also. The initial arrangement is one of distribution and after gaining sufficient experience and volumes, a manufacturing Joint Venture may be set up for decoration of Corelle range of products and manufacture of Snapware range of store-ware products. The sale of  these products will commence during the first quarter of the financial year 2012-13.

(ii) The Company has concluded a business collaboration agreement with Vestergaard  Frandson Group, Switzerland which will enable it to enter the fast growing domestic water filter segment. The products  will be made with the patented LifeStraw  technology of Vestergaard. The products will be assembled in India through the Company and  it will market and distribute the same across India.

(iii)  The Company has also entered into agreements with Bialetti Industries Spa, Italy whereby it has bought their pressure cooker and cookware manufacturing plants in Romania and Italy for installation in India. Some of the machineries have already been installed and commissioned and the balance will be installed and commissioned during the year 2012-13.

Pursuant to these arrangements Stainless Steel Pressure cookers are being outsourced by them from the Company. It has also entered into outsourcing arrangements with  their Indian subsidiary.

MANAGEMENTS’ DISCUSSION AND ANALYSIS

The product categories consist of Pressure Cookers, Non-stick Cookware, Gas Stoves and Domestic Kitchen Electrical Appliances.  The market for Pressure Cookers is shared amongst organized national branded players, regional players and unorganized players. Over the years, the share of the unorganized players has been gradually coming down as there has been a shift in the consumer preference to reliable branded players. The market for organized brands is estimated at more than 60% of the total market. The share of unorganized players is greater for Non-stick cookware as compared to pressure cookers. For the rest of the product categories, the market structure is fragmented and the share and the role of regional brands and unorganized players continue to be significant. 

Multinational Corporations are entering the domestic kitchen electrical appliances segment by acquiring regional brands. A couple of regional brands have been able to attract private equity investments at interesting valuations.

Some State Governments have started providing select domestic electrical appliances like mixer-grinders, fans etc. free of cost to low income groups.  While the free supplies by State Government will tend to commoditize the concerned product segment, the entry of multinationals and large domestic companies can lead to the growth of organized branded players. The real impact of all these on the growth of the organized sector can be felt only in the next couple of years. 

The Central Government has increased the excise duty on various products  of the Company. The increase is between 1% and 2%. This will have a cascading effect and push up the end prices of the products.

All the products introduced in the last two years have been receiving good response .The strategy of focusing on Total Kitchen Solutions continues to create newer and newer opportunities every year to add new product categories and new customer base.  The Company has already taken steps to foray into Tableware and Cookware (both glass and ceramic) segments, Kitchen Store ware and Domestic Water Filters the details of which are given separately under the heading “Alliances”.

 

 ‘Micro Chef’, the microwave pressure cooker range, mainly intended for the export market is attracting good interest in the export markets

 During the year , the Company introduced around 60 new products covering Pressure Cookers, induction Cook Tops, Mixer Grinders, Rice Cookers, Gas Stoves and other small electric appliances.

The company has extended its coverage to another 26 towns. The net addition to the number of  stores was 77. The number of outlets as at 31.3.2012 was 356. The network now covers 21 States and 179 towns.

OUTLOOK

Earlier during the beginning of the financial year 2011-12, the Company had given guidance  that during the five year period beginning April 2011, your Company expected to grow at CAGR of 25%. Having achieved 45% growth in the first year itself, the prospects of meeting the said average rate growth of 25% appears to be feasible especially on account of the entry into new product segments barring unforeseen circumstances.

The Company has already embarked on a strategy to lower the dependence on imports for some finished goods. This is possible once the manufacturing facilities in Western India are commissioned. This step is expected to have a favourable influence on working capital investments and margins.

 CAPITAL EXPENDITURE & EXPANSION PLANS

The company has completed most of its capital expenditure investments in Uttarakhand,  Coimbatore and Hosur units. All these expansions have started commercial production.  The Company has completed most of the formalities relating to the acquisition of land in Gujarat and the construction of the factory has commenced. Most of the machines have arrived. The first phase of this project is expected to be in place before the end of the financial year 2012-13.

The overall capital expenditure plan for the three years commencing April 2010 is pegged at around Rs.300 crores out of which around Rs.190 crores has been incurred till 31st  March 2012. The balance will be incurred during the financial year 2012-13. With this the Company would have installed sufficient capacities for Pressure Cookers and Cookware to meet the long-term  requirements.

DIVIDEND : Rs.15/- per share for the year. 

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