(Reuters) -Indian kitchenware maker TTK Prestige reported a 36% decline in quarterly profit on Monday, hurt by subdued rural demand and increased competition, especially from those selling low-priced goods.
Consolidated net profit fell to 266.3 million rupees ($3.07 million) for the first quarter ended June 30 from 417.5 million rupees a year ago, according to a regulatory filing.
Revenue from operations rose nearly 4% to 6.09 billion rupees, while total expenses increased about 7%.
KEY CONTEXT
Consumer-facing businesses selling discretionary goods — from kitchenware to clothing — have been struggling to boost sales over the last several quarters, partly due to slow wage growth.
In rural areas – a significant sales driver for TTK Prestige – microfinance lenders have been issuing fewer collateral-free small loans to borrowers due to rising default rates, weighing on demand.
In February, TTK Prestige earmarked 5 billion rupees to be spent over three financial years on manufacturing and marketing, as part of its plans to beef up its core business, including cookware and kitchen appliances.
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 38.81 24.45 NULL 9.54 16.29 Hold 4 0.95 0.94
Voltas 44.19 34.18 2.16 9.03 15.22 Buy 34 0.96 0.52
Havells India 51.70 34.91 3.81 10.93 15.34 Buy 26 0.90 0.64
Crompton Greaves 31.37 20.22 2.38 10.73 17.48 Buy 31 0.77 0.90
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
APRIL TO JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 86.6125 Indian rupees
(Reporting by Ananta Agarwal in Bengaluru and Praveen Paramasivam in Chennai; Editing by Eileen Soreng)
