Buy TTK Prestige, target price Rs 4,810: ICICI Direct
The brokerage has a buy on the stock with a revised target price of Rs 4,810 (26 times FY22E EPS).
By ETMarkets.com | Updated:
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ICICI Direct has given a buy rating to TTK Prestige with a target price of c ( an upside of 18 per cent over CMP of Rs 4,100) over 12 months. TTK Prestige recently held a conference call to give an update on the business performance and to analyse the prospective impact of Covid-19.
The company is constantly assessing the impact of Covid-19 but cannot quantify the real magnitude of the outbreak at the moment as it is yet to peak out. In the recent market fall, the TTK Prestige stock corrected ~26 per cent. With earnings in the short-term expected to be negatively impacted, TTK through its strong promoter pedigree and brand patronage is expected to tide over the current situation better than smaller peers. The company’s share price moved up by 3.63 per cent from its previous close of Rs 4301.10. The last traded price is Rs 4,457.20. Incorporated in 1955, TTK Prestige is a midcap company with a market cap of Rs 6001.99 crore.
Investment Rationale
Over the years, TTK Prestige has maintained balance sheet prudence with stringent control on working capital cycle. TTK carries substantial free cash that would enable it to navigate through a tough macro environment. The brokerage has lowered estimates of revenue growth along with margins to factor in the negative outcome owing to Covid-19 which is still at an early stage and the quantum of impact can only be assessed in the coming quarters. The brokerage has a buy on the stock with a revised target price of Rs 4,810 (26 times FY22E EPS).
Financials
For the quarter ended December 31, 2019, the company reported a Consolidated sales of Rs 587.27 crore, down -3.14 per cent from last quarter sales of Rs 606.30 crore and down -1.06 per cent from last year same quarter sales of Rs 593.54 crore. The company has reported net profit after tax of Rs 60.20 crore in the latest quarter.
The company is constantly assessing the impact of Covid-19 but cannot quantify the real magnitude of the outbreak at the moment as it is yet to peak out. In the recent market fall, the TTK Prestige stock corrected ~26 per cent. With earnings in the short-term expected to be negatively impacted, TTK through its strong promoter pedigree and brand patronage is expected to tide over the current situation better than smaller peers. The company’s share price moved up by 3.63 per cent from its previous close of Rs 4301.10. The last traded price is Rs 4,457.20. Incorporated in 1955, TTK Prestige is a midcap company with a market cap of Rs 6001.99 crore.
Investment Rationale
Over the years, TTK Prestige has maintained balance sheet prudence with stringent control on working capital cycle. TTK carries substantial free cash that would enable it to navigate through a tough macro environment. The brokerage has lowered estimates of revenue growth along with margins to factor in the negative outcome owing to Covid-19 which is still at an early stage and the quantum of impact can only be assessed in the coming quarters. The brokerage has a buy on the stock with a revised target price of Rs 4,810 (26 times FY22E EPS).
Financials
For the quarter ended December 31, 2019, the company reported a Consolidated sales of Rs 587.27 crore, down -3.14 per cent from last quarter sales of Rs 606.30 crore and down -1.06 per cent from last year same quarter sales of Rs 593.54 crore. The company has reported net profit after tax of Rs 60.20 crore in the latest quarter.
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