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ICICI – BUY TTK Presitge; Retail Thrust

March 29, 2007

TTK Prestige is a leading kitchen appliances company with products across the entire kitchenware segment. The company has transformed its distribution model by launching exclusive retail outlets known as ‘Smart Kitchens’. The company is well placed to capitalise on the consumption boom led by the demographic shift towards nuclear families in India. ICICI has initiated coverage on the company with an OUTPERFORMER rating.

At the current price of Rs 107, the stock is trading at a P/E of 9.82x its FY07E EPS of Rs 10.9 and 7.19x its FY08E EPS of Rs 14.88. On an EV/EBIDTA basis, the stock is available at 6.87x FY07E earnings and 5.74x FY08E earnings. Given the company’s aggressive retail foray and product diversification, we believe the current valuations are extremely attractive. We rate the stock an OUTPERFORMER with a 12-month price target of Rs 164, at 11x FY08E earnings. 60% Upside from current levels.

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