TTK Prestige today reported its third quarter net profit that came down sharply from the previous year as the company said it faces the worst consumer sentiment ever seen in a festive quarter.
The quarter also saw relaxation of a Government regulatory policy restrict demand for induction cookware, further taking a toll on the demand for induction cookware for the kitchen appliances maker.
The company said its net profit dropped 33% to Rs 29.5 crore in the third quarter, from Rs 44.1 crore in the same quarter last year. The company’s operating profit also slid more than 30% to Rs 41.51 crore in the quarter from Rs 60.26 crore a year ago.
Sales in third quarter slipped 15% to Rs 378.1 crore from Rs 444.7 crore in the previous year, due to lower volumes. The company said the third quarter in the last year had seen a sharp rise in induction cookware sales when the Government has restricted the purchase of subsidised cylinders last September to a maximum of 6 in a year. That restriction was relaxed in January this year to a minimum of 9 cylinders under subsidy per annum.
The company also saw a slightly lower margin of 12.87% in the latest quarter from 14.39% in the same quarter last year. The impact of the depreciation in the value of the Rupee was passed on to the market but the indigenisation of some production and assembly of some products has helped, the company said in a regulatory filing.
Expenses in the quarter, however, dropped by 13% to Rs 327.9 crore in the third quarter from Rs 376.8 crore in the comparable period last year. Exports, on the other hand, skid 30.6% to Rs 11.4 crore in October - December from Rs 16.5 crore in the same period in 2012.
In a regulatory filing the company said, “Consumer sentiment continues to be depressed and while efforts are being made to get moderate growth in the fourth quarter, the outcome is still unpredictable.”
The company which just launched a new marketing campaign by signing on celebrity couple Abhishek Bachchan and Aishwarya Rai last year, said its brand salience remains high.
