TTK Prestige 2Q15 Results - Muted but dont lose your heart

TTK Prestige earnings 2QFY15 delcined 8% yoy to Rs.28crs mostly due to unabsorbed costs at the new Gujarat manufacturing facility. 

Gujarat manufacturing unit is very strategic to company as most of the competitors continue to heavily rely on Chinese imports. The Indian unit will not only help avoid foreign exchange volatility but also improves speed to the market and assures consistent quality of its products. The unreliability of Chinese vendors was evident during the quarter as the Company lost 7-8crs of sales due to poor quality imports from China.

Currently, Gujarat plant is operating only at 30-40% capacity. Some signs of demand pick-up were evident during the quarter domestic sales grew 14%. However, one needs to be cautious as festive demand could be temporary. Nonetheless, worst seems to be over. 

Exports declined 6% during the quarter. However with new designs of microwave cookers ready for Japanese markets and Gujarat plant exports falling in place, exports growth could come back strongly.

2QFY15 Financials:

  

 

Hammerson Plc. 2013 Annual Day -Commercial Property Market at Tipping point

Hammerson PLC. 2013 Annual Day Key Highlights 

• UK economy held up better than expected during Christmas 
• UK retailers are confident of improving demand in coming quarters
• The higher confidence comes from falling unemployment rate and improving GDP 
• Reported retail sales data doesnt provide the correct picture of demand 
• As per Hammerson calculation which they showcased for 2 retailers the real demand for these retailer increased dramatically when adjusted for online sales which does not get recorded otherwise
• Starting 2015 Hammerson will make GBP5mn annual investments to support higher growth in business. 
• Company remains committed to its GBP1bn capex till 2018
• Value retail has grown strongly during 2013 with sales up 13% to Euro1.9bn
• In summary the Performance Drivers are
• Value Retail
• Growth from existing portfolios
• New developments
• Extensions and refurbishments
• Acquisitions on track to deliver significant shareholder value
• Bullring - increase stake to 50% in 2013; lease renewal at 10% plus
• Junction Fund
• La Vallee Village
• 2014 Specific plans in London
• Brent Cross - will complete S106; submit leisure planning application; secure CPO resolution
• Croydon - will conclude 
• Goodsyard located at Shoreditch sitting at Euro14mn in books whereas market value is ~30mn
• Earnings are expected to grow at rate of 20%-25%

In summary, Hammerson management is quite bullish about UK commercial property and is calling for tipping point in ERVs. In many cases, rentals inching up 10% plus on renewals should also calm the fears of bubble in UK real estate. We believe that UK and Europe REITs offer the best risk-reward in the world today and should deliver very strong returns over the next 2 years.