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The stock of TTK Prestige crashed 9.55 per cent or Rs 350, after the company announced a drop of 10 per cent in net profit for the quarter ended September 2012. It posted a net profit of Rs 30.28 crore for the quarter ended September 30, against the Rs 33.71 crore reported in the year-ago period. Total income, however, increased to Rs 336.55 crore (Rs 304.15 crore).
According to analysts, the shares of all overvalued companies react adversely if they fail to sustain performance. TTK Prestige closed at Rs 3,313.90 on the BSE against the previous day's close of Rs 3,663.75.
Power issues
Jagadishwar Pasunoori of Karvy Stock Broking said the induction stove market witnessed a negative growth of 15 per cent in volumes, mainly on account of acute power shortage in Southern states, where TTK is the market leader. “If one goes by PGCIL (PowerGrid Corporation) outlook, then the power situation is unlikely to improve until 2014 and that will affect TTK sales,” he said.
Outlook
Espírito Santo Securities, which recently downgraded the stock to ‘neutral’ from ‘buy’ with a price target of Rs 3,500, said: “Whilst rupee appreciation would help margins to some extent, the commissioning of its new pressure cooker and cookware plant increases pressure on margins as fixed costs, depreciation and interest expenses increase..”
> badrinarayanan.ks@thehindu.co.in
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