CRISIL Research assigns fundamental grade of ‘5/5’ to TTK Prestige

TTK Prestige Ltd. | Consumer Durables - Domestic Appliances | Consumer Durables | BSE: 517506 | NSE: TTKPRESTIG

15 Dec 2011 Evaluate

CRISIL Research has assigned a fundamental grade of ‘5/5’ to TTK Prestige (TTK). The grade indicates that the company's fundamentals are ‘excellent’ relative to other listed equity securities in India.

TTK’s ‘Prestige’ brand is a popular household name. The fundamental grade reflects the strong position of this brand in the organised kitchen appliances industry in India. TTK draws strength from an all-inclusive kitchenware product portfolio, particularly the pressure cooker and non-stick cookware categories (40-44% market share in the organised space).

The company’s sustained efforts to launch new and higher-margin products/variants in the past few years have ensured shelve space for ‘Prestige’ in kitchens across India, backed by 22,000 direct dealers. Besides first-time purchasing, various exchange and promotional schemes have created substantial replacement demand for its products

The grade also reflects the expected fast-pace growth in the branded kitchen appliances industry, driven by rising disposable income, increasing urbanisation, and additional gas connections following the rise in number of nuclear families and increasing penetration in rural markets.

However, as per the credit rating agency, TTK’s growth trajectory could hit a speed bump if competition intensifies, considering the kitchen appliance industry is highly fragmented and has low entry barriers.

TTK Prestige is the flagship company of the TT Krishnamachari group of companies, which has interest in healthcare and consumer products. The company has three manufacturing facilities, one each in Hosur, Coimbatore (Tamil Nadu) and Roorkee (in Uttarakhand). It is planning to set up a greenfield manufacturing facility primarily for non-stick cookware in Gujarat.