Exports May Take Time To Bounce Back, Says TTK Prestige MD

The export business of TTK Prestige Ltd., popularly known as the maker of Prestige pressure cookers, may take some time to stabilise from the slump seen in Q2, the company’s Managing Director Venkatesh Vijayaraghavan has said.

TTK Prestige released its Q2 earnings last week, reporting a 26% year-on-year drop in exports at Rs 13.5 crore, compared to Rs 18.3 crore a year ago. Standalone revenue from operations during the period grew 3.6% YoY to Rs 708.5 crore from Rs 683.7 crore in the corresponding period of the last fiscal. Profit after tax slipped to Rs 57.6 crore from Rs 62.2 crore a year ago. 

Commenting on the sharp decline in the export business, Vijayaraghavan said, “One of the key reasons is the macroeconomic situation outside the country today,” he said.

The TTK Prestige MD noted that this drop in export business was broad-based and not geography-specific. He added that the decline was triggered by a combination of logistics and freight availability issues not related to demand.

“Orders are robust, but supplying and fulfilling the orders is a concern. That’s one of the reasons why exports are more subdued than they should be. Would it bounce back? I think it is going to take some time primarily because of the macroeconomic conditions,” he said.

“If that (macroeconomic situation) improves and the price support increases, we should be able to supply better,” he said.

The Ebitda margins for TTK Prestige also contracted to 13.5%  from 14.6% in Q2, mainly due to pressures from increasing raw material and packing material prices. This, according to Vijayaraghavan, will impact overall numbers for the ongoing financial year.

“There has been a sharp ramp up (in pricing) that has happened in the last quarter. We believe it is consolidating, but the impact will be felt as the year progresses,” he said.

Vijayaraghavan also shared how TTK Prestige was working to mitigate costs.

“We focus more on mitigating this cost through internal cost re-engineering, and focus on automation in terms of manufacturing," he said, adding some of their plans were geared towards automation and digitisation, and that would hopefully mitigate some costs going ahead.

The top executive revealed other reasons for pressure on margins that were noted in Q2.

“We have also been investing in strategic initiatives, ramping up our R&D cost and that, probably, also has an impact on the cost,” he said.

Shares of TTK Prestige Ltd. fell 3.66% on Monday to touch an intraday low of Rs 862 apiece on the NSE. The stock was trading nearly 2.36% lower at Rs 873.70 apiece, while the benchmark Nifty 50 fell 1.7% at 12.27 p.m.