TTK Prestige plans to introduce 100 new SKUs in FY16, of which 75 have already been launched. During the quarter, management launched ‘Clip On’ range of pressure cookers on a pilot basis in Bangalore and plans to roll out the product on a pan-India basis during 2HFY16. With a view to tap rural markets, TTKPT has introduced LED Lanterns — which management believes will be a good product to penetrate into rural areas. TTKPT is looking to buy a brand in Europe, the size of which will be limited to R4b, to tap the export opportunity.
Management guided for 10% revenue growth and 20% profit growth in 2HFY16. We expect FY16 revenue growth at 10%, along with ~100bp margin expansion—translating into 26% PAT growth. We cut our EPS estimates by 10%/9% for FY16E/FY17E, given the delayed export growth.
Management highlighted that price growth stood at 4% in cooker and cookware categories while volume growth accounted for the balance 3%. The southern market grew 6% while non-southern market grew 16% during the quarter. As a result of delayed festive season, management highlighted that festive demand will be reflected better in 3Q results as against 2Q in FY15. Management highlighted that ecommerce (which contributes 2-3% of overall revenue) is the fastest growing segment for the company and despite heightened activity in e-commerce, discounting trends are abating; this should drive growth higher going forward.