Stock Review: TTK GROUP

Increasing production capacity, entry into other electrical appliances and addition of franchisee stores are likely to lend support to TTK GROUP 's kitchen appliance maker. TTK's cooker business is growing at 20%, which is higher than the industry growth rate of 10-15% as consumer preference grows towards brands. To cater to this growing demand, the company plans to almost double its cooker and cookware capacity to 80 lakh units by 2013- end. It is also planning to increase its kitchen appliances stores to 500 by FY13 from 285 through the franchisee model. Its net sales have grown at a 32% CAGR in the last three years to 776 crore in FY11. Profits have grown at 60% to 84 crore in FY11. The ROE for FY11 was 45%. The only concern is the high valuation of a P/E of 41. Investors can buy on dips