Prestige Estates

TTK Prestige stock  tumbled down after announced a set of disappointing numbers for Q2FY13 wherein net profit on a YoY, fell 10% at Rs.30.28 crore on a 11% rise in net sales at Rs.335.55 crore. EBIDTA was flat at Rs.51 crore while EBIDTA margin fell to 14.79% v/s 16.45% in Q2FY13. Rupee depreciation is stated to be the main culprit to bring down the margin as it has large aluminium imports and that pushed up its raw material costs. Also given the scarcity of electricity in Tamil Nadu, where power is collectively there for just 6 hours a hour, has also impacted power costs due to use of UPS and also affected production. Another reason is that last fiscal, festive demand came in from Sept and that helped give impetus to the Q2 numbers but this year, the festive demand will come in from Oct and hence we could see better numbers in Q3. Also with rupee stabilizing, the numbers are expected to be better.

It added 25 new networks to its Prestige Smart Kitchen network, taking the total tally to 390. Its expansion project at Gujarat is on schedule and it hopes to commence production in Jan 2013. It has spent Rs.257 crore on total capex and another Rs.75 crore is expected to be spent before end of FY13. Its dent as at 30th Sept 2013 stands at Rs.123 crore. In current Q1, the company had given a guidance of a growth of 25% in revenue but all that will now depend on the second half, especially, Q3. The one big plus point for company is that thanks to the cap on LPG cylinders, demand for its pressure cookers and induction cooking range is expected to go up. Currently 4% of the company’s turnover comes from exports and it plans to take up a notch to 5% in current fiscal. It is scouting around for acquisitions in Europe, in the range of around Rs.300 crore. On an equity of Rs.11.32 crore, annualized EPS stands at Rs.108 and the management has guided an EPS of Rs.140 for FY13. EPS in FY12 was at Rs.100.