YEARS

TTK Prestige Ltd

Q1FY13 results first cut: In line with expectations
Fundamental Grade Valuation Grade Industry 5/5 (Excellent fundamentals) 2/5 (CMP has downside) Household Durables

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July 10, 2012 Fair Value CMP CFV MATRIX

Excellent Fundamentals

Rs 2,950 Rs 3,305

TTK Prestige Ltds (TTKs) Q1FY13 results were in line with CRISIL Researchs expectations. Some of the key highlights of Q1FY13 results are mentioned below and we will provide more clarity post our call with the management. Revenues grew by ~30% both y-o-y and q-o-q to Rs 3,025 mn, which demonstrates that the company has been able to maintain its business momentum. EBITDA grew ~26% y-o-y to Rs 478 mn. However, EBITDA margin declined 44 bps y-oy to 15.8% because of higher raw material cost. We believe that higher raw material cost was due to 18% y-o-y decline in the rupee vs. the US$ as TTK imports products that constitute ~30-40% of its overall sales. PAT grew by 21% y-o-y to Rs 307 mn. PAT margin of 10.1% was lower than 10.9% in Q1FY12 because of higher interest costs.

5
Fundamental Grade

4 3 2 1

Poor Fundamentals

Valuation Grade
Strong Downside Strong Upside

We believe TTKs growth is driven by its exposure to resilient domestic consumer spending, diversified product portfolio and strong brand equity. The Q1FY13 results have strengthened our confidence in TTKs growth prospects. Our outstanding fundamental grade is 5/5 and the fair value is Rs 2,950 per share. We will release a detailed quarterly update post our discussion with TTKs management and may revise our assessment. Valuations: Current market price reflects downside Our DCF-based outstanding fair value estimate for TTK is Rs 2,950 per share. The fair value implies P/E multiples of 22x FY13 and 18x FY14 EPS estimates, respectively. At the current market price of Rs 3,305, the valuation grade is 2/5.

KEY STOCK STATISTICS

NIFTY/SENSEX NSE/BSE ticker Face value (Rs per share) Shares outstanding (mn) Market cap (Rs mn)/(US$ mn) Enterprise value (Rs mn)/(US$ mn) 52-week range (Rs)/(H/L) Beta Free float (%) 5265/117456 TTKPRESTIG/TTKPRES 10 11.3 37,461/681 37,808/687 3,613/2,215 0.8 25.1% 132,451 405

KEY FORECAST
(Rs mn) Operating income EBITDA Adj net income Adj EPS-Rs EPS growth (%) Dividend yield (%) RoCE (%) RoE (%) PE (x) P/BV (x) EV/EBITDA (x) FY10 5,077 780 483 42.6 115.9 0.3 64.1 46.3 77.8 30.3 47.6 FY11 7,641 1,267 841 74.2 74.0 0.4 76.4 53.3 44.7 19.6 29.1 FY12 11,046 1,781 1,133 99.9 34.7 0.5 63.8 47.5 33.2 13.2 21.3 FY13E 14,182 2,233 1,441 127.1 27.1 0.7 52.8 42.0 26.1 9.4 16.9 FY14E 18,085 2,901 1,811 159.8 25.7 0.8 51.6 38.3 20.8 6.9 12.4

Avg daily volumes (30-days) Avg daily value (30-days) (Rs mn)

SHAREHOLDING PATTERN*
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Jun-11 Promoter Sep-11 FII Dec-11 DII Mar-12 Others 74.9% 74.9% 74.9% 74.9% 12.5% 5.8% 6.8% 12.4% 4.3% 8.4% 10.6% 4.7% 9.7% 10.9% 5.3% 8.9%

NM: Not meaningful; CMP: Current market price * June 2012 shareholding not yet disclosed Source: Company, CRISIL Research estimates

PERFORMANCE VIS--VIS MARKET

Returns 1-m TTK Prestige NIFTY 10% 4% 3-m 3% 1% 6-m 31% 11% 12-m 20% -7%

ANALYTICAL CONTACT
Mohit Modi (Director) Abhijeet Singh Bhaskar Bukrediwala Client servicing desk +91 22 3342 3561 clientservicing@crisil.com mohit.modi@crisil.com abhijeet.singh@crisil.com bhaskar.bukrediwala@crisil.com

For detailed initiating coverage report please visit: www.ier.co.in CRISIL Independent Equity Research reports are also available on Bloomberg (CRI <go>) and Thomson Reuters.