TTK Prestige - Q4FY20 First Cut - ICICI Securities

(CMP: Rs. 5173, MCap: Rs. 7170 crore)

TTK Prestige reported weak set of Q4FY20 results, wherein numbers were below our estimates across all parameters. Disruptions owing to store closures (from mid-march onwards) resulted in substantial contraction in revenues for TTK in Q4FY20.

Q4FY20 Earning Summary (Standalone)

- TTK reported revenue de-growth of 13.8% YoY to Rs. 383.5 crore (I-direct estimate: Rs. 397.6 crore). Company lost sales worth Rs. 70.0 crore owing to COVID-19 disruptions (as per the company's estimates). The de-growth was broad based across all segments, with cookers, cookware and appliances declining by 16%/18%/11% to Rs. 116 crore, Rs. 54 crore and Rs. 199 crore, respectively.

- Owing to benign RM prices, gross margins for quarter improved by 150 bps YoY to 43.6%. However, unabsorbed fixed expenses and higher marketing spends, led to EBITDA margin contraction of 530 bps YoY to 9.2% (I-direct estimate: 12.3%), with absolute EBITDA declining by 45.2% YoY to Rs. 35.2 crore (I-direct estimate: Rs. 48.9 crore)

- Higher depreciation (up 50% YoY) and lower other income (down 20% YoY), further impacted PAT growth. Ensuing PAT declined by 52.4% YoY to Rs. 20.9 crore (I-direct estimate: Rs. 33.6 crore)

- Given the trade liquidity concerns, company followed cautious policy on primary sales through better optimization of working capital. Company generated healthy operating cashflows worth Rs. 257 crore (vs. Rs. 90.0 crore in FY19) and FCF of Rs. 200.0 crore. Company continues to carry substantial free cash in excess of Rs. 350.0 crore as on FY20

- Post lockdown relaxations, the company commenced sales from first week of May and primary & retail sales have been encouraging since the third week of May

We will get further clarity on the numbers after a detailed interaction with the management during a conference call today.

Shares of TTK PRESTIGE LTD. was last trading in BSE at Rs.5155.55 as compared to the previous close of Rs. 5310.1. The total number of shares traded during the day was 396 in over 151 trades.

The stock hit an intraday high of Rs. 5308.9 and intraday low of 5100. The net turnover during the day was Rs. 2066559.

Source : Equity Bulls

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