TTK Prestige on Thursday posted fiscal fourth quarter profit at Rs 59.45 crore, down 25.7 per cent as against Rs 80.02 crore in the same quarter last year. It clocked revenue from operations at Rs 610.97 crore, down 12.4 per cent in comparison to Rs 697.50 crore in the corresponding quarter of previous year. The Board also recommended a dividend of Rs 6 per share of face value of Re 1 each, that is, 600 per cent for the financial year 2022-23.
TTK Prestige said that while all channels were active throughout the quarter, the demand was subdued and there was also severe discounting happening at lower end products by certain brands and online channels. “The overall retail climate was not conducive to growth given the discretionary nature of the products we sell. Therefore, additional sales promotional expenditure has to be undertaken to counter the competitive intensity for the same reason. This had some impact on the gross margin for this quarter,” the company said in the regulatory filing. Further, it also noted that the global recession and inflationary pressures in developed markets had its impact on the export sales during the quarter.
Q4FY23 performance
During the fourth quarter, TTK Prestige’s domestic sales was at Rs 551.3 crore, and export sales was at Rs 14.7 crore and total sales was recorded at Rs 566 crore. “Though the sales were down compared to Q4 of last year, the EBITDA margin for the quarter has been healthy at 16.8 per cent,” it said. TTK Prestige added that its value added items and new products performed better during the quarter. The company also introduced 9 new SKUs in Q4 across categories. Further, its Prestige Xclusive chain strength stood at 681 in 368 towns contributing significantly to total sales.
During the fourth quarter, TTK Prestige invested Rs 10 crore in Ultrafresh ModularSolutions Limited (Ultrafresh) and increased its shareholding to 51 per cent. Accordingly, the consolidated financial statements include the profit / loss of Ultrafresh as a subsidiary from January 2023, it said.
TTK Prestige’s UK subsidiary, Horwood Homewares Ltd achieved a sale of £3.9 million during Q4FY23 and £15.3 million for FY23. It said that the recession and unprecedented inflation due to the extended geo-political crisis in UK and Europe coupled with UK’s own political issues, resulted in significant increase in costs and a big reduction in sales across industries in the UK. Its Indian subsidiary Ultrafresh achieved a sale of Rs 5.5 crore during Q4FY23 and Rs 23 crore for the year FY23. Ultrafresh added 60 studios during the year FY23 (including 8 in Q4) totalling to 142 active studios as of 31 March 2023.
Going forward
With the projected GDP growth of 6.5 per cent for FY24, TTK Prestige said that it is expected that private consumption will rebound in the next financial year. “The Union Budget for FY24 also aims to broadbase the development which may cause structural change in the segmentation of consumers based on income levels,” it said. TTK Prestige will continue to focus on improvement in efficiencies and management of critical costs to maintain EBITDA margins at a healthy level. It has also planned the launch of around 58 new SKUs during the first quarter of FY24.