(Reuters) – India’s TTK Prestige, whose kitchen appliances range from pressure cookers to electric chimneys, reported a 6.4% decline in third-quarter profit on Tuesday as consumers reined in spending due to persistently high inflation.
The company’s shares dropped 5.5% in afternoon trading.
TTK’s consolidated net profit fell to 584.5 million rupees ($6.8 million) in the quarter ended Dec. 31, from 624 million rupees a year earlier.
Revenue decreased 1.5% to 7.27 billion rupees, while total expenses were largely flat.
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KEY CONTEXT
Premium household appliances and kitchenware makers have been grappling with a slowdown in discretionary spending in urban areas as persistently high food prices pressure household budgets.
In the rural segment, demand has slackened as microfinance lenders have been extending fewer loans due to asset quality deterioration.
After the festive sales in October, which included the festival of Deepavali, demand was sluggish in the rest of the quarter, TTK said.
Besides that, higher prices of key raw aluminium have also been weighing on kitchenware makers’ margins.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean # of Stock to price Div yield
growth(%) growth rating* analysts target** (%)
(%)
TTK Prestige 35.34 25.09 8.59 21.61 Hold 4 0.85 0.77
Crompton Greaves 31.35 21.40 12.33 25.95 Buy 32 0.71 0.88
Consumer Electricals
Voltas 42.40 34.01 16.17 38.13 Hold 33 0.84 0.38
Havells India 53.68 36.55 14.92 22.98 Buy 24 0.83 0.66
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER TO DECEMBER STOCK PERFORMANCE
— All data from LSEG — $1 = 86.5300 rupees
(Reporting by Ananta Agarwal in Bengaluru; Editing by Sherry Jacob-Phillips)
