(Reuters) -Indian kitchenware maker TTK Prestige reported a 39% fall in fourth-quarter profit on Tuesday, as rural volumes remained under pressure due to reduced lending by microfinance institutions.
The company reported a profit before tax and exceptional items of 453.8 million rupees ($5.32 million) in the quarter ended March 31, down from 745.2 million rupees a year earlier.
It booked a one-time impairment charge of 714 million rupees related to its UK subsidiary, Horwood Homewares, on continued stress in the UK economy, and the threat of tariffs from the U.S. possibly compounding that, TTK said.
Its shares were down nearly 6% after the results.
Overall revenue from operations rose nearly 4.3% to 6.5 billion rupees, while total expenses increased 9.5%.
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KEY CONTEXT
Microfinance lenders have been issuing fewer collateral-free small loans to borrowers in the rural parts of the country, amid rising default rates, following a period of aggressive lending in the segment.
TTK Prestige, which has a “significant share of sales” from rural areas, said it is seeing a slowdown in rural volumes as a result.
While its sales from traditional channels, which include stores and e-commerce grew 10.2%, the sales hit in rural areas pulled overall growth down to 2.7%.
Higher aluminium prices during the quarter also impacted performance, said TTK.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBI Price/ Revenue Profit Mean No. of Stock to Div
TDA Sales growth (%) growth (%) rating* analyst price yield
s target** (%)
TTK Prestige 36.27 24.66 8.95 25.05 Hold 4 0.88 0.88
Voltas 37.87 30.48 2.19 11.56 19.51 Buy 33 0.87 0.44
Havells India 53.66 35.47 3.92 14.14 21.29 Buy 24 0.88 0.64
Crompton Greaves 34.00 21.78 2.38 10.89 19.15 Buy 30 0.82 0.84
Consumer
Electricals
* 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
JANUARY TO MARCH STOCK PERFORMANCE
— All data from LSEG
— $1 = 85.3790 Indian rupees
(Reporting by Ananta Agarwal in Bengaluru; Editing by Janane Venkatraman and Sherry Jacob-Phillips)
