CMP (Rs) 3531.00

Target Price (Rs) 3955.00

ISIN: INE690A01010

Jan 17th

, 2013

TTK PRESTIGE LIMITED

Result Update: Q3 FY13

BUYBUYBUYBUY

Stock Data

Sector Home Appliances

BSE Code 517506

Face Value 10.00

52wk. High / Low (Rs.) 3996.00/2285.00

Volume (2wk. Avg ) 17000.00

Market Cap ( Rs in mn ) 39970.92

Annual Estimated Results (A*: Actual / E*: Estimated)

Years FY12A FY13E FY14E

Net Sales 11034.30 14565.28 17478.33

EBITDA 1751.20 2204.72 2659.70

Net Profit 1133.60 1427.74 1707.82

EPS 100.14 126.13 150.87

P/E 35.26 28.00 23.40

Shareholding Pattern (%)

1 Year Comparative Graph

BSE SENSEX TTK PRESTIGE LTD

SYNOPSIS

TTK Prestige Limited, has emerged as

India’s largest kitchen appliances company

catering to the needs of home makers in the

country.

During the quarter ended, the robust

growth of Net Profit of the company is

increased by 27.57% to Rs. 441.00 million.

Net addition to PSK (Prestige Smart

Kitchen) Net work during the quarter was

38, taking the total to 428 across 209

Towns in 21 states.

TTK Prestige Ltd has informed that the

Madras High Court have sanctioned the

Scheme of Amalgamation amalgamating

Prestige Housewares India Ltd, a TTK

Group Company with TTK Prestige Ltd.

The establishment of new facility in Gujarat

is in progress and the initial phase is

expected to be commissioned during the

last quarter of the current financial year.

TTK Prestige Ltd has received US Patent for

its Microwave Pressure Cooker under

Patent No.8247751.

Net Sales and PAT of the company are

expected to grow at a CAGR of 32% and

27% over 2011 to 2014E respectively.

Peer Groups CMP Market Cap EPS P/E (x) P/BV(x) Dividend

Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)

TTK Prestige Ltd 3531.00 39970.92 100.14 35.26 14.02 150.00

Hawkins Cookers Ltd 2395.00 12659.00 57.87 41.37 24.54 400.00

Bajaj Electricals Ltd 205.00 20441.80 12.11 16.93 2.96 140.00

La Opala RG Ltd 266.55 2834.80 13.34 20.05 5.09 20.00

Investment Highlights

Results updates- Q3 FY13,

TTK Prestige Limited, has emerged as India’s largest

kitchen appliances company catering to the needs of

home makers in the country, reported its financial

results for the quarter ended 31st Dec, 2012. The

third quarter witnesses a healthy increase in overall

sales as well as profitability enhanced, festive sales

took place in October & November of the current

financial year.

Months Dec-12 Dec-11 % Change

Net Sales 4371.30 3343.30 30.75

PAT 441.00 345.70 27.57

EPS 38.96 30.54 27.57

EBITDA 630.60 540.70 16.63

The company’s net profit jumps to Rs.441.00 millions against Rs.345.70 million in the corresponding quarter

ending of previous year, an increase of 27.57%. Revenue for the quarter rose 30.75% to Rs.4371.30 million from

Rs.3343.30 million, when compared with the prior year period. Reported earnings per share of the company

stood at Rs.38.96 a share during the quarter, registering 27.57% increase over previous year period. Profit

before interest, depreciation and tax is Rs.630.60 millions as against Rs.540.70 millions in the corresponding

period of the previous year.

Expenditure :

During the quarter total expenditure rose by 33 per

cent due to Other Expenditure indicates 44%

increase over the corresponding period of the last

year. Total expenditure in Q3 FY13 was at Rs.

3772.40 millions as against Rs. 2831.20 millions in

Q3 FY12. Cost of material consumed was stood at

Rs.952.70 millions against Rs.741.70 millions in the

corresponding period of the previous year. Other

Expenditure was at Rs. 1023.50 million and

Purchase of stock in trade was at Rs. 1192.90 million

in Q3 FY13 are the primarily attributable to growth

of expenditure.

Segment Revenue

Latest Updates

• A Scheme of Arrangement between TTK Prestige Limited and Triveni Bialetti Industries Private Ltd (TBI) has

been approved by the Sub-committee and confirmation by the High Courts of Chennai and Mumbai. The

Scheme of Arrangement if approved and confirmed by the Courts shall demerge the Kitchen Appliances

Division of TBI and vest the same with TTK Prestige Ltd.

• TTK Prestige Ltd has informed that the Madras High Court have sanctioned the Scheme of Amalgamation

amalgamating Prestige Housewares India Limited (PHIL), a TTK Group Company with TTK Prestige Ltd. TTK

Prestige Ltd has allotted 20,106 equity shares to the shareholders of Prestige Housewares India Ltd.

• Net addition to PSK (Prestige Smart Kitchen) Net work during the quarter was 38, taking the total to 428

across 209 Towns in 21 states.

Expansion Programme

• The Company has completed the expansion/addition of facilities for manufacture of Pressure Cookers in

Roorki, Coimbatore and Hosur. With this the overall capacity for pressure cookers is in excess of 8 million

pieces. The establishment of new facility in Gujarat is in progress and the initial phase is expected to be

commissioned during the last quarter of the financial year 2012-13. With this the Company will have in its

command around 12 million capacity for coated and impact bonded cookware.

• The overall capital expenditure including modernization/automation of certain processes in the existing

facilities is pegged at Rs.300 Crores out of which Rs.215 Crores has been spent and the balance will be spent

by the end of the current financial year.

Company Profile

TTK Prestige Limited is part of TTK Group. Over the past five decades TTK Prestige Limited, has emerged as

India’s largest kitchen appliances company catering to the needs of home makers in the country. Every Prestige

brand product is built on the pillars of safety, innovation, durability and trust, making the brand the first choice

in millions of homes.

They always begin by understanding the needs and requirements of customer and then they design and deliver

innovative products. TTK Prestige Limited is one of the world’s largest manufacturers of Pressure Cookers and it

has been forefront in introducing several innovations like Gasket Release System (GRS), Gasket Offset Device

(GOD) and Double Locking System, all firsts in India.

TTK Prestige Limited is also the first Kitchenware Company in India to receive the ISO 9001 Certification and the

PED/CE Certification by TUV, Germany. Prestige has been awarded with Selected “Super Brand” validated by

Consumers and also it is the most preferred brand in Kitchenware segment.

TTK Prestige Limited exports its products to USA, Europe, South Africa, Kenya, Australia, Singapore, Middle East,

Sri Lanka and many other countries. Products manufactured by TTK Prestige Limited meets every relevant global

standard such as CE, GS, UL etc. Today, Prestige has matured from a traditional pressure cooker brand to

complete kitchen solution provider.

Products

Today, TTK Prestige Limited has the widest product portfolio covering all aspects of the Kitchen making it the

only brand to offer TOTAL KITCHEN SOLUTIONS to the customer. The product range includes:

• Pressure Cooker: Deluxe, Popular, Money Saver, Nakshatra

• Pressure Handi: Deluxe, Nakshatra,

• Baby Handi

• Pressure kadai: Non-Stick Cookware, Omega select, Omega Die-Cast, Omega Deluxe

• Elec. Appliances: Mixer Grinders, Juicer Mixer Grinder, Rice Cookers, Champion Food Processors(M),

Oven Toaster Griller, Irons, DryIrons, Steam Irons, Kettles, Sandwich Toaster, Pop-up Toaster, Hand

Blender, Wet Grinder

• 6 Gas & Glass Tops: Conventional, Royale, Glass Tops

• Microwaves, Hoods & Hobs Kitchen Accessories, Knife Sets, Kitchen Tools, Barbeque

Plants Locations

The company presently has manufacturing facilities in Hosur, Coimbatore and Roorkee and distributes from

sales branches located across the country to cater to the needs of specific markets.

Financial Highlight

Balance sheet as at March31st, 2012

(A*- Actual, E* -Estimations & Rs. In Millions)

Particulars March (Rs.in.mn) FY12A FY13E FY14E

1.Shareholder’s Funds

a) Capital 113.35 113.35 113.35

b) Reserves & Surplus 2737.70 4165.44 5873.26

Total Net worth 2851.05 4278.79 5986.61

2.Loan Fund

a) Secured loans 151.10 157.14 161.86

b) Unsecured loans 21.70 21.92 22.36

c) Differed Tax liability 68.09 78.30 86.13

Total Liabilities (1+2 ) 3091.94 4536.15 6256.96

1.Fixed Assets

a) Gross block 2001.28 2421.55 2784.78

b) Depreciation 494.70 514.49 529.92

c) Net Block 1506.58 1907.06 2254.86

d) Capital Work in Progress 793.66 1047.63 1320.02

Total Fixed Assets 2300.24 2954.69 3574.87

2. Investments 3.90 4.49 5.02

Current Assets, Loans & Advances (A)

a) Inventories 1748.95 2413.55 3041.07

b) Sundry Debtor 1060.37 1336.07 1589.92

c) Cash & Bank Balance 223.37 256.25 287.01

d) Other Current Assets 4.53 5.66 6.80

e) Loans & Advances 1494.50 2421.09 3536.97

Total Current Assets 4531.72 6432.62 8461.76

Less: Current Liabilities & Provisions (B)

a) Liabilities 2305.18 3042.84 3681.83

b) Provisions 1438.74 1812.81 2102.86

3. Net Current Assets (A-B) 787.80 1576.97 2677.06

Total Assets( 1+2+3 ) 3091.94 4536.15 6256.96

Annual Profit & Loss Statement for the period of 2011 to 2014E

Value(Rs.in.mn) FY11 FY12 FY13E FY14E

Description 12m 12m 12m 12m

Net Sales 7635.70 11034.30 14565.28 17478.33

Other Income 43.00 30.80 34.50 37.95

Total Income 7678.70 11065.10 14599.77 17516.28

Expenditure -6425.00 -9313.90 -12395.05 -14856.58

Operating Profit 1253.70 1751.20 2204.72 2659.70

Interest -7.60 -56.40 -84.60 -120.13

Gross profit 1246.10 1694.80 2120.12 2539.56

Depreciation -42.60 -62.40 -80.50 -99.82

Profit Before Tax 1203.50 1632.40 2039.63 2439.75

Tax -366.00 -498.80 -611.89 -731.92

Net Profit 837.50 1133.60 1427.74 1707.82

Equity capital 113.20 113.20 113.20 113.20

Reserves 1801.48 2737.70 4165.44 5873.26

Face value 10.00 10.00 10.00 10.00

EPS 73.98 100.14 126.13 150.87

Quarterly Profit & Loss Statement for the period of 30th June, 2012 to 31st March, 2013E

Value(Rs.in.mn) 30-Jun-12 30-Sep-12 31-Dec-12 31-Mar-13E

Description 3m 3m 3m 3m

Net sales 3025.30 3355.50 4371.30 3322.19

Other income 6.90 10.00 9.40 7.71

Total Income 3032.20 3365.50 4380.70 3329.90

Expenditure -2547.10 -2858.80 -3750.10 -2867.05

Operating profit 485.10 506.70 630.60 462.85

Interest -26.10 -35.90 -31.10 -21.15

Gross profit 459.00 470.80 599.50 441.70

Depreciation -20.40 -21.50 -22.30 -22.75

Profit Before Tax 438.60 449.30 577.20 418.95

Tax -131.80 -146.50 -136.20 -121.50

Net Profit 306.80 302.80 441.00 297.46

Equity capital 113.20 113.20 113.20 113.20

Face value 10.00 10.00 10.00 10.00

EPS 27.10 26.75 38.96 26.28

Ratio Analysis

Particulars FY11 FY12 FY13E FY14E

EPS (Rs.) 73.98 100.14 126.13 150.87

EBITDA Margin (%) 16.42% 15.87% 15.14% 15.22%

PBT Margin (%) 15.76% 14.79% 14.00% 13.96%

PAT Margin (%) 10.97% 10.27% 9.80% 9.77%

P/E Ratio (x) 47.73 35.26 28.00 23.40

ROE (%) 43.74% 39.76% 33.37% 28.53%

ROCE (%) 66.92% 59.98% 51.24% 44.67%

Debt Equity Ratio 0.01 0.06 0.04 0.03

EV/EBITDA (x) 31.47 22.80 18.10 14.99

Book Value (Rs.) 169.14 251.85 377.97 528.84

P/BV 20.88 14.02 9.34 6.68

Charts

Outlook and Conclusion

� At the current market price of Rs.3531.00, the stock P/E ratio is at 28.00 x FY13E and 23.40 x FY14E

respectively.

� Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.126.13 and

Rs.150.87 respectively.

� Net Sales and PAT of the company are expected to grow at a CAGR of 32% and 27% over 2011 to 2014E

respectively.

� On the basis of EV/EBITDA, the stock trades at 18.10 x for FY13E and 14.99 x for FY14E.

� Price to Book Value of the stock is expected to be at 9.34 x and 6.68 x respectively for FY13E and FY14E.

� We recommend ‘BUY’ in this particular scrip with a target price of Rs.3955.00 for Medium to Long term

investment.

Industry Overview

The term “appliances” can imply many different pieces of equipment. The most recognizable are items like

refrigerators, freezers, cooking ranges, and clothes washers and dryers. Other items like coffee makers,

microwaves, and air purifiers are also home appliances.

Kitchen appliances are the most commonly recognized appliances. Food processors, bread makers, juicers, and

other such items are also considered appliances for the kitchen. All of these items are designed to make

daily kitchen duties much easier and convenient.

Many home appliances are found outside of the kitchen. The washer and dryer are probably the two most

common non-kitchen oriented appliances. Other items include air purifiers, dehumidifiers, air conditioners, and

space heaters.

Small appliances are becoming increasingly popular in the modern home. Many of these items didn’t’ exist 20

years ago. Electric shavers and toothbrushes are among the most popular small home appliances.

Manufacturing home appliances has become a big industry over the past few decades. The variety of appliances,

and the multitude of designs for each item, has grown much more numerous. The technology that is used in the

operation of this equipment has dramatically advanced in recent years.

The General Electric (GE) appliance line covers nearly every home appliance need. This company has existed for

decades and is one of the industry leaders in appliance manufacturing. Many of their products are considered

some of the most advanced and efficient on the market.

In today’s world, energy efficient appliances are an important way to help conserve our natural resources. An

ecologically friendly appliance can have a significant impact on annual energy costs. These items sometimes cost

a little more at the point of purchase, but the long term energy savings easily makes up for the difference in price.

The refrigerator is often the centerpiece of a kitchen’s design. However, these items are usually the largest

consumer of electricity in the house. It is therefore recommended that one purchase the most energy efficient

model that one can afford.

Dishwashers are as common as refrigerators and cooking ranges in today’s kitchens. Modern versions are much

more efficient in their water usage and in their energy consumption than they have been in the past. They can

also be found in designs to match nearly any kitchen décor.

Appliances are omnipresent in the average American home. Many common appliances like refrigerators,

freezers, stoves, cooking ranges, and dishwashers have been seen in homes for decades. As technology has

advanced, so have the capabilities and efficiency of these appliances.

Most of today’s appliances are designed to be much more efficient and ecologically friendly. Modern washers use

much less water than those of the past. Today’s refrigerators also use much less electricity than earlier models.

Appliances like air conditioners and space heaters are becoming more common in today’s homes. These items

can help make a home much more comfortable during inclement weather. Small items like these are often the

least expensive appliances as well.

Kitchen appliances make up the vast majority of household appliances. Refrigerators, cooking ranges, and

microwaves are found in nearly every home. Smaller items like coffee makers, food processors, and blenders are

also quite common.

The refrigerator is generally the most used kitchen appliance in the average home. Energy efficiency is an

important aspect of a refrigerator, as they are always running and are therefore responsible for the bulk of a

kitchen’s energy consumption. Modern refrigerators use considerably less energy than those of just a decade ago.

Cooking ranges and microwave ovens are also common kitchen appliances. Cooking ranges come in both electric

and natural gas varieties. Electric ranges today use much less electricity than those of the past.

CRISIL Research expects household appliance industry to register a growth of 17 per cent CAGR to reach Rs.736

billion in 2015-16.Rising household incomes and low penetration levels will drive the industry volume growth.

Disclaimer:

This document prepared by our research analysts does not constitute an offer or solicitation for the purchase or sale

of any financial instrument or as an official confirmation of any transaction. The information contained herein is

from publicly available data or other sources believed to be reliable but do not represent that it is accurate or

complete and it should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s affiliates shall

not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the

information contained in this report. This document is provide for assistance only and is not intended to be and must

not alone be taken as the basis for an investment decision.

Firstcall India Equity Research: Email – info@firstcallindia.com

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