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Corporate Report

Published on: Sept. 11, 2020, 1:34 p.m.
Innovation helps TTK Prestige to stay on top
  • Jagannathan: “I cook every day; I taught my company to cook!"

By Sekhar Seshan. Consulting Editor, Business India

At nearly Rs2,100 crore, TTK Prestige is nearly four times as big as its nearest competitor Hawkins in the pressure cooker market, company chairman T.T. Jagannathan points out. Prestige, which was the first to get into pressure cookers back in 1955, sold about 6.5 million pieces last year, more than 40 per cent of the total market volume of 15 million. “The other brands, like Butterfly, are very small, while there are many players in the unorganised sector,” he says.

The company reported a profit before tax of Rs248.21 crore on a standalone revenue of Rs1,936.79 crore in the year ended 31 March 2020. Operations in the first quarter of the current year were ‘impacted by the prolonged lockdown announced by various state governments’, it has said in its filing to the stock exchanges. IIFL had maintained an ‘add’ rating on the company after its Q1 results, with a target price of Rs5,600, because it had seen above-estimate EBIDTA in the quarter. the current price has already overshot this to Rs6,145.30.

TTK Prestige Ltd, part of the TTK group, has over the past six decades emerged as India’s largest kitchen appliances company, with every one of its products ‘built on the pillars of safety, innovation, durability and trust’. Four years ago, it launched ‘Prestige Clean Home’ a range of innovative home cleaning solutions. The company also bought the UK-based Horwood Homewares, a kitchenware manufacturer established in 1896, and launched the latter’s Judge brand in India in August 2017.

Half of its revenue, however, still comes from pressure cookers and cookware. The company has 525 ‘Prestige Xclusive’ outlets and a larger number of multi-brand stores across the length and breadth of India, as well as an online presence, to reach out to its consumer base efficiently.

The market has been dynamic. Yes, Jagannathan admits, the pressure cookers had to overcome the fact that they burst and the lids flew off. This was, however, only later in their lifetime, when the original safety plugs were replaced – most often with spurious ones. “I was in a hotel in Lucknow when I got an idea of how to solve that problem: I invented a gasket release system (GRS), which ensures that our lids don’t fly off. There has not been a single such instance, including the one million pieces being used in the US, since we introduced the GRS in 1979,” he says.

When the other manufacturers came up in 1993, TTK already had a 14-year lead. Hawkins, however, managed to get a foothold in the northern and eastern markets with its inner-lid marketing; the south and west stayed predominantly with the market leader. But Prestige too had to come out with an inner-lid model to compete in the markets into which its competition had got.

Explains managing director Chandru Kalro: “The geographical divide was historical due to the fact that we were both single-product companies – pressure cookers. Prestige marketed the ‘Cook a whole meal in minutes’ concept, which was cooking multiple items using separators. So, you could cook rice, dal and vegetables in one go. This was because our outer-lid cookers had a wide mouth and we were also selling larger sizes.”

Hawkins, on the other hand, has a small mouth and went about promoting direct cooking, Kalro says. Inherently the cuisines of the regions suited the two players in doing what they did. This, he explains, is why Prestige became popular in all rice-eating markets and Hawkins in wheat-eating or direct cooking markets.

Jagannathan himself continues to interest himself in the practical aspects of his product: in every household, he found, the food in the cooker comes out when the whistle blows to let off steam. The person who is doing the cooking then has to wipe not only the surface of the lid, but also the stove and the area around it. Enter the Prestige Svachh, with a shallow well on the lid into which this food falls, keeping the stove and kitchen platform clean. “This is in keeping with the national Swacch Abhiyan,” he grins. “It is rasoi ka Svachhabhiyan!” The company has also applied for a patent for its new model.

Adds Kalro: “TTK Prestige is constantly innovating to introduce interesting kitchen appliances to ease the day-to-day lives of our customers. We are immensely proud of our latest innovation to the pressure cooker family, that will serve as the perfect gadget to enable home cooks to not only spend less time in the kitchen but to also churn out nutritious and flavoursome food.’’

Its responsiveness is what keeps TTK ahead, he says: “We look at the pain points. The housewife doesn’t know what she actually wants, but she knows the pain points.” The company keeps abreast of these by ensuring that the top five levels cook every day: “I do, I taught my company to cook!”

Indian heritage

Part of this responsiveness is that after the stand-off with China began, TTK Prestige announced that it would stop sourcing finished products from China after September 2020. The company has been increasing local production over the past three years, and has moved most of its China-based finished-product sourcing to local manufacturing and sourcing, Kalro says.

“As a brand, we are inherently proud of our Indian heritage and legacy. We have been reducing this dependence on China over the last few years, right from the time the Doklam incident happened.

Pointing out that the 99 per cent penetration in the urban market is offset by the 1 per cent in rural areas because people don’t have cooking gas, Jagannathan feels that instead of introducing free gas cylinders, the government should give people induction stoves. “These would be at one-fourth the cost – that, too, a one-time expense, with no need for gas refills,” he points out.

India has a large base of young consumers, who form the majority of the workforce and hardly find time for traditional cooking due to their busy schedules. This creates a huge demand for western kitchen appliances that facilitate easy and quick cooking. Side by side with this, the rural demand for affordable yet quality products has also increased. Thanks to this combination of factors, the kitchen appliances market in India has grown at an estimated CAGR of more than 25 per cent between 2014 and 2019.

Jagannathan asserts that the rest of the industry follows whatever TTK Prestige does: special schemes, advertising or product design. “Imitation is the best form of flattery!” he says with satisfaction. The company has manufacturing plants at Hosur in Tamil Nadu, across the Karnataka border from Bengaluru where it is headquartered, as well as Coimbatore – also in Tamil Nadu – and Vadodara in Gujarat, where it went on prime minister Narendra Modi’s personal invitation. “He came to visit us, sat where you are sitting and said, ‘Come to Gujarat’ – so we did,” the chairman says. Many of its appliances are, however, outsourced to designated vendors.

With workers’ salaries having shot up to Rs90,000 at the mother plant in Hosur, the company has made its new facilities state-of-the-art, with robots. “We have 72 pick-and-place robots in Coimbatore, which do the job of 216 people,” Jagannathan says. “They are cheaper and don’t give any trouble!”

The company’s partners are happy. Vendor Girish Gupta, who runs Kaiser Appliances at Khokhra village in Solan district of Himachal Pradesh says, he has treated his organisation as ‘part and parcel’ of TTK Prestige and works as the company’s ancillary since their association began in 2003.

At the other end, one of its major dealers, Rajan Sarathy whose eponymous Sarathy store is a multi-brand outlet that has been associated with TTK Prestige since the inception of the business in 1976, says: “We have enjoyed a very fruitful partnership for the last 44 years. This long, mutually beneficial relationship has been possible because of the company’s strong ethics and values in treating dealers fairly and recognising the importance and contribution of the dealer network. They have been an exceptional partner in supporting us with branding, promotional activities and customer service.”

TTK Prestige as a brand also has the trust of customers in terms of safety, quality and value for money, Sarathy says. “As a speciality retailer, we need to offer our customers the latest innovations in kitchen appliances. TTK Prestige has always been a leader in this regard, with various innovative products launched recently like the grain grinder and no-spill Svachh cooker,” he adds. 

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