TTK PRESTIGE: THE RUNAWAY HIT (BEST ENTRY PRICE)

TTK PRESTIGE is one of those Stocks which has created a lot of wealth for those who got in at the right time and held on patiently. At CMP 2942 (52 WK High 3175 ;52 wk low 932 on the NSE) it is trading at a PE (TTM) of 35 approx. The Stock has given phenomenal returns of over 200% in the last one year. But all that is in the past; our attempt here is to try and find the optimum Entry Price currently.

First looking at the TECHNICALS we find that, on the 2 year Price Charts, the 150 DMA has NEVER been violated whereas the 100 DMA has been broken only once ie the period 23/8/11 to 29/8/11. During this period, the lowest point was at 2455 intraday on 25/8/2011, that is 8% below DMA 100. All this seems very encouraging, but if we examine the 6 month Charts we see that the period 21/7/11 to 5/8/11 saw a price retracement of about 11% followed by a 3.5% upmove in the period 6/8/11 to 9/8/11. This was followed by a 20% price retracement during the period 10/8/11 to 25/8/11. This ,in turn, was followed by a 16% upmove from 26/8/11 to 5/9/11 but the earlier peak was NOT reclaimed which is a definite short term negative. Short point of all this is that the Stock is showing definite signs of fatigue and the uptrend though not  reversed has been surely vitiated, thus warranting caution in the near term. A look at the Delivery Volumes over the period 1/8/2011 to date shows that they have ranged between 8% to 15% which also is ominous.


Looking briefly at the FUNDAMENTALS, we all are aware that the Revenue growth projection of about 60% annually for at least the next two years is of course excellent and the Net Earnings growth pegged at even 45% CAGR over the next two years at least, provides excellent visibility. Further, Capacity expansion is also likely to impact FY 13 onwards. Factors such as good Brand pull and ever-increasing Demand Catchment area are also significant. Thus the Fundamentals look great with the Scrip currently trading at about 22 PE FY2011-12.

Taking an overall view, it is very likely that the Scrip will face turbulence in the Short term but the long term story remains intact. First entry, in my opinion can be made around 2650 levels and more can be accumulated in the zone 2450-2650. Levels of 2239 remain a solid long term support unlikely to be breached.