TTK Prestige registered revenue of Rs 6.5 billion in Q4, up 4.3% YoY. Growth in Q4 was muted vs peers - Butterfly (+11% YoY) but better than Sunflame (-24.2% YoY) and Stove Kraft (-3.8% YoY). Raw material costs declined 90 bps, which was completely offset by 50/490 bps increase in staff costs/other exp. respectively.
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Dolat Capital Report
TTK Prestige Ltd.'s Q4 FY25 revenue grew 4% (in-line with estimate), but Ebitda margins declining 450bps YoY to 7.9% was a negative surprise. The traditional channel grew by 10% YoY in Q4, however subdued demand in MFI and CSD channels, dragged overall performance.
In order to strengthen the core business, TTK Prestige has allocated Rs 2 billion towards soft operational expenses, which is likely to weigh on Ebitda margins over next two years (high single digit margins expected in FY26E).
With acceleration in sales growth, Ebitda margins should rebound to ~13% levels in next few years.
To factor in Q4 performance, we have cut our FY26/27E EPS by 15/10% to Rs 16.1/Rs 20.8 respectively. We downgrade to ‘Accumulate' from ‘Buy' with revised target price of Rs 714, valuing at 24x FY27E EV/Ebitda.
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