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CRISIL IER Independent Equity Research

TTK Prestige Ltd

Q1FY15 results first cut: Earnings in line with expectations

Industry: Household Durables July 15, 2014

TTK Prestige Ltds (TTKs) Q1FY15 revenues were above while earnings were in line with

CRISIL Researchs expectations. Highlights of the results are mentioned below; this will be

followed by a detailed quarterly update.

Revenues grew 9.8% y-o-y (up 23.4% q-o-q) to 3,364 mn in Q1FY15 from 3,063 mn in

Q1FY14.

EBITDA margin contracted 128 bps y-o-y (up 183 bps q-o-q) to 12.2% in Q1FY15 against

13.5% in Q1FY14. Raw material cost as a percentage of sales declined 318 bps y-o-y to

55.1% from 58.3% in Q1FY14. Other expenses and employee cost went up 31.5% and

14.8% y-o-y respectively.

Adjusted PAT remained flat y-o-y (up 42.5% q-o-q) at 258 mn. The company reported

EPS of 22.2 in Q1FY15 against 22.7 in Q1FY14.

CRISIL Researchs current IER coverage on TTK Prestige Ltd

In our report dated June 05, 2014, we had assigned a fundamental grade of 5/5 (excellent

fundamentals) and fair value of 3,050 per share. We are reviewing the results in detail and

will release an update report after our discussion with the management. The outstanding

fundamental grade and fair value may undergo a revision in the update report.

KEY FORECAST

( mn) FY12 FY13 FY14# FY15E FY16E

Operating income 11,046 13,598 12,939 14,725 17,254

EBITDA 1,781 2,121 1,602 1,967 2,543

Adj net income* 1,133 1,329 1,049 1,759 1,712

Adj EPS () 99.9 117.0 90.0 151.0 146.9

EPS growth (%) 34.7 17.1 (23.1) 67.8 (2.7)

Dividend yield (%) 0.4 0.5 0.5 0.9 1.1

RoCE (%) 63.8 47.5 25.9 26.5 29.8

RoE (%) 47.5 39.0 21.4 26.9 21.9

PE (x) 35.0 29.9 38.9 23.2 23.8

P/BV (x) 13.9 10.0 7.0 5.6 4.8

EV/EBITDA (x) 22.5 19.1 25.4 20.1 15.2

* FY15 earnings include one-time other income of 710 mn from the real estate project,

which is expected to accrue in H2FY15

# Based on abridged financials, CMP: Current market price

Source: Company, CRISIL Research estimates

KEY STOCK STATISTICS

NIFTY/SENSEX 7527/25211

NSE/BSE ticker TTKPRESTIG

/TTKPRES

Face value ( per share) 10

Shares outstanding (mn) 11.6

Market cap ( mn)/(US$ mn) 40,692/676

Enterprise value ( mn)/(US$ mn) 40,654/675

52-week range ()/(H/L) 4,364/2,693

Beta 1.0

Free float (%) 29.6%

Avg daily volumes (30-days) 28,734

Avg daily value (30-days) ( mn) 107

SHAREHOLDING PATTERN

PERFORMANCE VIS--VIS MARKET

Returns

1-m 3-m 6-m 12-m

TTK Prestige -6% 11% -2% 4%

CNX 500 5% 4% 1% 4%

ANALYTICAL CONTACT

Mohit Modi (Director) mohit.modi@crisil.com

Sayan Das Sharma sayan.sharma@crisil.com

Bhaskar Bukrediwala bhaskar.bukrediwala@crisil.com

Client servicing desk

+91 22 3342 3561 clientservicing@crisil.com

Q1FY15 Results Summary

( mn) Q1FY15 Q4FY14 Q1FY14 q-o-q (%) y-o-y (%)

Net sales 3,364 2,725 3,063 23.4 9.8

Raw materials cost 1,854 1,492 1,786 24.3 3.8

Raw materials cost (% of net sales) 55.1% 54.8% 58.3% 36bps -318bps

Employee cost 254 215 221 18.2 14.8

Other expenses 845 735 643 15.0 31.5

EBITDA 411 283 414 45.1 (0.6)

EBITDA margin 12.2% 10.4% 13.5% 183bps -128bps

Depreciation 57 38 24 51.3 138.3

EBIT 354 246 390 44.2 (9.2)

Interest and finance charges 6 13 31 (55.6) (80.8)

Operating PBT 348 232 359 49.9 (3.1)

Other income 12 10 17 23.2 (29.5)

Extraordinary Income/(expense) - 81 - (100.0) NM

PBT 360 323 376 11.5 (4.3)

Tax 102 61 118 67.4 (13.8)

PAT 258 262 258 (1.5) 0.1

Adj PAT 258 181 258 42.5 0.1

Adj PAT margin 7.7% 6.6% 8.4% 103bps -75bps

No. of equity shares (mn) 11.6 11.6 11.3 - - Adj EPS () 22.2 15.6 22.7 42.5 (2.5)

Source: Company, CRISIL Research

71.9% 70.0% 70.0% 70.4%

16.0% 20.8% 22.1% 20.9%

4.4% 2.8% 1.4% 2.1%7.8% 6.4% 6.4% 6.7%

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Promoter FII DII Others

CRISIL IER Independent Equity Research

Explanation of CRISIL Fundamental and Valuation (CFV) matrix

The CFV Matrix (CRISIL Fundamental and Valuation Matrix) addresses the two important analysis of an investment making process Analysis

of Fundamentals (addressed through Fundamental Grade) and Analysis of Returns (Valuation Grade) The fundamental grade is assigned on a

five-point scale from grade 5 (indicating Excellent fundamentals) to grade 1 (Poor fundamentals) The valuation grade is assigned on a five-

point scale from grade 5 (indicating strong upside from the current market price (CMP)) to grade 1 (strong downside from the CMP).

CRISIL

Fundamental Grade Assessment

CRISIL

Valuation Grade Assessment

5/5 Excellent fundamentals 5/5 Strong upside (>25% from CMP)

4/5 Superior fundamentals 4/5 Upside (10-25% from CMP)

3/5 Good fundamentals 3/5 Align (+-10% from CMP)

2/5 Moderate fundamentals 2/5 Downside (negative 10-25% from CMP)

1/5 Poor fundamentals 1/5 Strong downside (