Not stopping at that the company has entered into business agreements with World Kitchen, USA to enter the high-end Cookware and Tableware segments. Also the company has entered into an agreement with Vestergaard Frandson Group, Switzerland with an ambition to enter the water purification segment.
The company had indulged in some capex for on its facilities in Uttarakhand, Coimbatore and Hosur units. The company also is expanding its facilities in Gujarat by constructing a factory which is expected to be commissioned in 2013 thus adding capacity for Pressure Cookers and Cookware.
Let’s have a look at the financials.
| 2013 | 2012 | 2011 | 2010 | 2009 | CAGR% | |
| Sales (in Cr) | 1358.48 | 1103 | 763 | 508 | 401 | 35.67 |
| Profit (in Cr) | 133.09 | 113 | 83.75 | 52.44 | 22.38 | 56.16 |
| OPM% | 15 | 15.58 | 16 | 14.54 | 8 | |
| ROCE% | 46.43 | 55 | 60 | 55.8 | 27 | |
| ROE% | 33.65 | 39.65 | 43.84 | 42.29 | 26.64 | |
| Debt/Equity | 0.06 | 0.06 | 0.01 | 0.02 | 0.25 | |
| Interest Coverage Ratio |
13.65 | 30 | 28 | 65 | 6.41 |
CMP when posted was Rs.3347.95
As can be seen from the above, the company has maintained good sales and profit figures. Also, the D/E ratio and interest coverage ratio are impressive.
As per the reports by the company, by Dec 2012, as compared to the 9 months of the previous year, sales grew by 23.75%, EBITDA margin was at 14.8% and PAT was at Rs. 105.06cr.
As more and more households go for branded non-stick cookware and other ultra-modern kitchenware appliances, the company’s footprint will only increase. As of Dec 2012, the company had 428 Prestige Smart Kitchen network stores nationwide to showcase its products
In short, the company will toe the line of the FMCG sector in general. We had given the advantages of this sector in our post on Sector Snapshot - Consumer Goods. While learning to invest in stocks, it is easy to follow the Sector>Company>Market approach. And this concept fits beautifully with TTK Prestige.
All in all, in our opinion, TTK Prestige is a good stock to invest and is a good pick on dips.
