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TTKPT is a leading player in the kitchenware market in India with a well established brand and a pan India
presence. It has over the last decade diversified from a one product company (pressure cooker) to a Kitchenware
company. Its earnings have grown at a CAGR of ~63% during FY06-11 and will witness a CAGR of 38% during
FY11-13. TTKPT is a play on the increasing income, urbanization and shift from unorganized to organized players
in the kitchenware market in the country. We initiate with ACCUMULATE and a price target of Rs3,106.
(22x FY13)
Investment Highlights
A leading player in the pressure cooker market with a strong brand name
TTKPT is one of the largest players in pressure cooker market in India and is a dominant name in this
category. The pressure cooker market (~60% organized) is growing at ~10-15% whereas TTKPT has been
growing at ~20%. Management has guided ~20% growth to be sustainable for 2-3 years.
Diversified product portfolio
TTKPT has over the past decade diversified its product portfolio and has added cookware and kitchen
appliances. The revenue contribution of pressure cooker has decreased from ~59% in FY06 to ~41% in
FY11 and will further reduce to ~35% by FY13E.
Kitchen appliances & cookware to aid future growth
TTKPTs kitchen appliances/cookware had a CAGR of 65%/56% in revenues during FY09-11 and the
revenue contribution from these segments increased from 33% in FY09 to 45%in FY11. Going ahead
these segments are expected to see a CAGR of ~50% during FY11-13.
Operating margins to remain stable at ~16%
TTKPT OPM in FY12 is expected to increase marginally by ~35 bps to 16.3% due to operating leverage. In
FY13 the OPM will remain stable.
Revenue/PAT CAGR of 38% during FY11-13E
TTKPT revenue growth is going to be led by electric appliances and cookware segment. These segments
are going to see a high growth due to under penetration and rising disposable income. Also the increasing
number of PSK stores will aid the growth of these segments. Revenue/PAT is expected to witness a CAGR
of 38% during FY11-13.
Return ratios to remain healthy despite ~Rs2.3 bn capex undertaken in FY12
TTKPT return ratios are expected to remain healthy during FY11-13 due to high growth in all its product
segments despite ~Rs2,300 mn incurred in FY12 for increasing capacities of the pressure cooker and
cookware categories. The ROE/ROIC is expected to decline to 41.8%/46.4% by FY13.
Attractive Valuations:
TTKPT is a play on the mass consumption market in India and is expected to witness a CAGR of ~38% in
earnings during FY11-13. It is well positioned to capitalize on the rising disposable income and growing
urbanization in the country. There are not any listed comparable players which operate in the similar space
and thus we have compared it to consumption companies (Jubilant Foodworks, Page Industries, Titan
Industries etc) which are the closest peer set. The consumption companies trade at an average PER of ~30x
FY13 whereas TTKPT trades at 20.1x FY13. As TTKPT has high growth visibility, sustainable OPM and better
return ratios, it can trade at similar multiples. However, we have been conservative and have valued TTKPT at
22x FY13 (~25% discount) and initiate with a ACCUMULATE and a target price of Rs3,106.
read core thesis and other company covered: click link below
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
TTKPT is a leading player in the kitchenware market in India with a well established brand and a pan India
presence. It has over the last decade diversified from a one product company (pressure cooker) to a Kitchenware
company. Its earnings have grown at a CAGR of ~63% during FY06-11 and will witness a CAGR of 38% during
FY11-13. TTKPT is a play on the increasing income, urbanization and shift from unorganized to organized players
in the kitchenware market in the country. We initiate with ACCUMULATE and a price target of Rs3,106.
(22x FY13)
Investment Highlights
A leading player in the pressure cooker market with a strong brand name
TTKPT is one of the largest players in pressure cooker market in India and is a dominant name in this
category. The pressure cooker market (~60% organized) is growing at ~10-15% whereas TTKPT has been
growing at ~20%. Management has guided ~20% growth to be sustainable for 2-3 years.
Diversified product portfolio
TTKPT has over the past decade diversified its product portfolio and has added cookware and kitchen
appliances. The revenue contribution of pressure cooker has decreased from ~59% in FY06 to ~41% in
FY11 and will further reduce to ~35% by FY13E.
Kitchen appliances & cookware to aid future growth
TTKPTs kitchen appliances/cookware had a CAGR of 65%/56% in revenues during FY09-11 and the
revenue contribution from these segments increased from 33% in FY09 to 45%in FY11. Going ahead
these segments are expected to see a CAGR of ~50% during FY11-13.
Operating margins to remain stable at ~16%
TTKPT OPM in FY12 is expected to increase marginally by ~35 bps to 16.3% due to operating leverage. In
FY13 the OPM will remain stable.
Revenue/PAT CAGR of 38% during FY11-13E
TTKPT revenue growth is going to be led by electric appliances and cookware segment. These segments
are going to see a high growth due to under penetration and rising disposable income. Also the increasing
number of PSK stores will aid the growth of these segments. Revenue/PAT is expected to witness a CAGR
of 38% during FY11-13.
Return ratios to remain healthy despite ~Rs2.3 bn capex undertaken in FY12
TTKPT return ratios are expected to remain healthy during FY11-13 due to high growth in all its product
segments despite ~Rs2,300 mn incurred in FY12 for increasing capacities of the pressure cooker and
cookware categories. The ROE/ROIC is expected to decline to 41.8%/46.4% by FY13.
Attractive Valuations:
TTKPT is a play on the mass consumption market in India and is expected to witness a CAGR of ~38% in
earnings during FY11-13. It is well positioned to capitalize on the rising disposable income and growing
urbanization in the country. There are not any listed comparable players which operate in the similar space
and thus we have compared it to consumption companies (Jubilant Foodworks, Page Industries, Titan
Industries etc) which are the closest peer set. The consumption companies trade at an average PER of ~30x
FY13 whereas TTKPT trades at 20.1x FY13. As TTKPT has high growth visibility, sustainable OPM and better
return ratios, it can trade at similar multiples. However, we have been conservative and have valued TTKPT at
22x FY13 (~25% discount) and initiate with a ACCUMULATE and a target price of Rs3,106.
read core thesis and other company covered: click link below
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