India's largest kitchen appliances maker ran out of stock despite factories operating at full capacity

India's largest kitchen appliances maker ran out of stock despite factories operating at full capacity
Prestige
  • TTK Prestige's chairman TT Jagannathan in an interview revealed that the company saw a 15% jump in its sales in October and would have seen ₹75 crore more sales had it not run out of stock.
  • Jagannathan said the cookers didn't do well this time and the sales were down 20% in August September and October
  • The company's revenues from e-commerce channels grew at the fastest rate, with the overall share rising to 25% in the first quarter up from 12% earlier.
  • The chairman also revealed that the company is looking to double its capacity by April next year.
  • There are at least three emerging trends visible in the company’s experience.
India's largest kitchen appliances maker TTK Prestige saw a staggering demand for its products in October. The company's chairman TT Jagannathan in an interview with CNBC TV18 revealed that the company saw a 15% jump in its sales in October and would have seen ₹75 crore more sales had it not run out of stock.

The company’s latest quarterly report showed a 18% drop in profit but things may now be turning around.

TTK PrestigeJuly-Sep 2021Growth over same period last year
Revenue₹644.22 crore5.17%
Profit₹65.44 crore-18.54%

Not surprisingly, the company is looking to double its capacity by the end of the financial year in March 2021. "What we are making, we are up to 100 percent now. In the month of November, even in October, we had problems with part shortages, handles, and packaging, and so no. Now we are on speed, but it is not the same thing with our vendors, they are still coping," Jagannathan said

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There are at least three emerging trends visible in the TTK Prestige experience.
  • On the positive side, e-commerce has come to the rescue of a legacy business at a time when supply chains have been disrupted. The company's revenue from e-commerce channels grew at the fastest rate, with the overall share rising to 25% in the first quarter up from 12% earlier. That has also led to a smaller margin, which has shrunk by 260 basis points, according to a JM Financial report. 100 basis points make for a percent.
  • What people buy online has been different: TTK Prestige is known for its pressure cookers but it sold more of other appliances in recent months. "Cookers didn't do well; it is a base effect. August, September, October cooker sales were 20% lower," he added.
India's largest kitchen appliances maker ran out of stock despite factories operating at full capacity

  • The supply disruption from China continues to hurt companies. "We have shifted all procurement from China to India, that is why we were having shortages in stock. The market is booming, we could have sold ₹75 crore more in September if we had the stock," he added.
There may be more gains on the way

The share price of TTK Prestige has gained over 18% since the beginning of this fiscal year. The arrival of Dhanteras and Diwali is also expected to bring more business to the company, making the analysts believe that the stocks can gain more in the near future.

India's largest kitchen appliances maker ran out of stock despite factories operating at full capacity

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“The company continues to be virtually debt-free and have substantial free cash worth | 300 crore. With earnings in the short-term expected to be negatively impacted, TTK, through its strong promoter pedigree and brand patronage, is expected to tide over the current situation better than smaller peers," the ICICI report dated August 11 said.

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