Shares of TTK Prestige Ltd have gained 9.4% to Rs3,015 apiece since the company announced its June quarter earnings on Friday. During the same period, the Bombay Stock Exchange’s (BSE) benchmark Sensex has remained flat.
The kitchen appliances maker delivered a strong performance in the June quarter. For instance, revenue increased by a solid 60% on a year-on-year (y-o-y) basis to Rs233 crore, supported by strong volume growth across categories.
In the March quarter, revenue had risen by 47% on a y-o-y basis. The March quarter typically tends to be a slow one for the company. But revenue growth in the June quarter was also better than the 50% revenue growth that the company had reported in the last fiscal.
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Operating profit margin improved to 15.9% y-o-y, higher than 13.1% reported in the March quarter. “Management took a blended price increase of about 7% in line with its customary price hike taken every six months, owing to the increase in raw material prices,” said analysts from Elara Securities (India) Pvt. Ltd in their post-results note. That appears to have supported margins.
Total raw material costs have increased 65% in the June quarter from a year earlier. Yet, TTK Prestige’s June quarter margins are equal to what it reported for the last fiscal. At the net level, the company posted 58% growth in profit to Rs25 crore. Net profit in the March quarter had increased 30%.
TTK Prestige is expanding capacity at various locations by spending Rs225 crore, of which Rs100 crore has been spent till the end of the June quarter.
The scrip has outperformed the BSE-500 Index in the past one year. While the recent sharp spike could keep the performance of the shares in check, the company’s leadership position and regular product innovations should augur well in the long term.
Graphic by Sandeep Bhatnagar/Mint
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