TTK Prestige Share News: On 30th October 2023, the financial services firm ICICI Securities Limited published the latest research report on TTK Prestige shares, assigning a ‘buy’ rating to the stock. The comprehensive analysis also provides valuable insights into the company’s financial health.
ICICI Securities Limited is Bullish on TTK Prestige and has recommended a ‘buy’ rating on the stock with a target price of Rs 920. Let’s take a closer look at their recommendations for the TTK Prestige share price target set by ICICI Securities Limited.
TTK’s Q2FY24 results primarily reflect the impact of a significant increase in competitive intensity. Revenues declined by 13.4% YoY, suggesting a probable market share loss (in our opinion) due to subdued consumer demand and aggressive discounting by competitors. We anticipate a weak performance in Q3FY24 but expect a rebound by Q4FY24 and H1FY25. The benefits of the investments should materialize in FY25 and subsequent years. Key initiatives by TTK include:
- increased investments in the Judge brand with potential market share gains at the bottom of the pyramid,
- an anticipated launch of a premium brand targeting consumers at the top end, and
- a favorable base. We remain bullish on TTK Prestige given its high RoCE, strong FCF generation, established brand, extensive distribution, and solid promoter/management background. We maintain a BUY recommendation.
TTK reported a decline in revenue, EBITDA, and PAT of 13.4%, 31.7%, and 29.3% respectively, YoY. The intensified competition has likely resulted in market share losses at the bottom of the pyramid. Increased discounting by unorganized and smaller brands has led to diminished market shares. Gross margin expanded by 126bps YoY due to decreased input costs, while the EBITDA margin shrank by 297bps YoY, attributable to negative operating leverage. Other income saw a surge of 108% YoY.
We project TTK Prestige to post revenue and PAT CAGR of 4.2% and 6.2% respectively over FY23-25. We also forecast robust FCF generation. A revival is expected from H1FY25 onward, bolstered by a favorable base and the maturing Judge brand. We retain our BUY rating and have set a revised DCF-based target price of INR 920 (implying a P/E of 44x for FY25E).
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