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:
