For Q2FY2019, TTK Prestige (TTK) posted decent performance with 7.2%/28.5% yoy growth in revenue/ PAT led by 187 bps expansion in margin. The company has delivered strong profitability during the quarter despite revenue loss of ~ `15 cr due to Kerala flood (Kerala normally contributes 10%+ of Q2 revenue).

Outlook and Valuation: We have fine tuned our earnings estimates in view of subdued revenue off-take while increasing operating margin in view of robust H1 performance( excluding Kerala impact). We now expect TTK to report a CAGR of ~16%/23% in revenue/ earnings over FY18-20E. The stock is currently trading at 29x its FY2020 earnings, which is at discount to its 5-year average PE multiple of 40x. We maintain BUY with a revised target price of `7500 (35x FY2020E EPS).

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