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TTK Prestige - Erasing The Tag Of A Slow Growth Company: ICICI Securities

Earnings CAGR higher than most peers over FY17-22.

TTK Prestige store in Goregaon, Mumbai, India. (Source: Company website)
TTK Prestige store in Goregaon, Mumbai, India. (Source: Company website)

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ICICI Securities Report

The investors (we spoke to on TTK Prestige Ltd.) believe that TTK Prestige is a slow growth company. The company reported Ebitda compound annual growth rate of just 4.3% over FY12-17, materially lower than its peers.

However, we note there is stark improvement in Ebitda CAGR over FY17-22. TTK’s Ebitda CAGR was 14.3% over FY17-22, higher than its historical performance as well as its most peers.

Chief reasons driving the improvement in Ebitda growth are-

  1. steady expansion of distribution,

  2. expansion in Non-south India markets and

  3. investments in new product launches.

Considering the growth rates are largely similar to peers but TTK Prestige has superior return ratios, we believe its valuation multiples deserve rerating. We model the company to report revenue and earnings CAGRs of 13.3% and 24.4% over FY23-FY25E with mid-single digit volume growth, distribution expansion and market share gains.

Click on the attachment to read the full report:

ICICI Securities TTK Prestige Company Update.pdf
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