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Yes Securities Report
TTK Prestige Ltd. delivered muted revenue growth despite favorable base. Lower rural demand has resulted in muted revenue growth. General trade has done well during the quarter, they continued to feel the pressure from the e-commerce and modern format stores which did well during this quarter ahead of the festive season.
Rural Channel driven by MFI has not performed well as they had their own issues to deal with. Gross margin has contracted 238bps on sequential basis on higher commodity prices.
Company believes commodity prices are expected to remain at elevated levels impacting margin going forward. Ebitda was impacted by payment of Rs79mn to the consultant to chalk out blueprint for long term strategy and plan.
Phase 1 study has been completed by the consultant and report is currently being evaluated by the company. Additional expenses and investments are expected to continue for few more quarters keeping margin under the check.
Management believes H2 FY25 will result be better for the company as well as for the industry with rural expected to remain largely subdued. Given the challenges company is facing in terms of demand and elevated commodity prices impacting growth and margin in the near term. We now value the company at 42 times versus 45 times considering lower growth and margins and reiterate our Neutral stance with revised target price of Rs 946.
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