TTK Prestige - Real Estate Tailwinds Likely To Drive Growth FY26 Onwards: ICICI Securities

ICICI Securities Report

We hosted senior management of TTK Prestige Ltd. for business climate update webinar with institutional investors. Takeaways:

1. The kitchen appliances industry went through a rough patch over FY22-24 (i.e., after Covid). However, there are green-shoots visible as excess trade inventory is being liquidated and offtake in April-May 2024 has improved YoY.

2. While demand for real estate has expanded, the demand for kitchen appliances improves during last leg of the real estate cycle.

3. Entry of large durable players will help in sector formalisation. Larger players compete on the basis of quality instead of just pricing.

4. Gross margin of the company has contracted with rising revenue share of appliances. Gross margin of appliances segment is lower than cooker and cookware.

5. There is no need of price hikes as inflationary pressure is benign.

The company also has inventory procured with lower commodity prices. Maintain Buy with a DCF-based revised target price of Rs 920.

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