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Forecasting

While forecasting the Income Statements for TTK Prestige Ltd. as well as for Khaitan Electricals Ltd., we
have made the following assumptions:
1) Previous 3 Quarters Reports were analyzed and interpreted for obtaining the sales figures and
the trends prevailing in FY14. The Net Sales for FY14 was a sum of previous Sales (Actual
published Sales) of 3 Quarters as per Companys Quarter-wise Reports for FY14 and forecasted
figure for 4th Quarter which was taken as Average of previous three Quarters and added back
due to non-availability of Quarter-wise information of Reports for the last financial year/s. Had
the Quarter-wise Reports for the last financial year been available, we could have forecasted
Net Sales by adding a proportionate amount to the present Net sales of 3 Quarters in
consonance with the percentage increase in Sales of Qtr4 over Qtr3 of last year.
2) Tax provision was not taken into Account for Khaitan as it had heavy tax liabilities in the form of
deferred tax liability carried over in its loss-making year FY12. Its provisions for tax prior to FY12
were insufficient so that the tax liability had to be carried over beyond FY12 into FY13 also. So,
to keep the forecasting realistic and simple, we assumed to not take into account tax provisions
for current year as they cannot be guessed from the financial statements of Khaitan. To
maintain coherence in forecasting for TTK Prestige also, we have not considered their provisions
for tax.
3) Instead we have simplified the forecasting due to dearth of information on Companys policy for
providing for tax and have assumed a tax liability @ 35% (the standard rate for Corporate Tax).
4) All expenditures and other income also did not reveal a specific pattern of growth or reduction
or status quo both in terms of absolute values as well as in percentage terms. So they were also
assumed to trend as per Percentage of Sales.
5) Downward or upward shift in Net Sales was taken as per the trend in the last FY. The industry is
facing a slowdown in recent years and hence, the trend has been continued in forecasting the
figures across both the companies in FY14 and FY15 vis--vis the slowdown. Assumption 1 above
would allow us to get a fair picture of Sales prevailing in FY14. PAT is arrived at as per
Assumptions 2 and 3. Khaitans PAT is low due to heavy tax liabilities carried forward from
previous years beyond FY12 in which they incurred severe losses. TTK Prestige is least affected
by the slowdown being #1 Company with stable and sustained growth in the Home Appliances
Category but as they plan to expand this year, they could resort to taking more debt and could
lead to a slight dip or status quo in PAT for FY15 although going by the earlier trend, FY14 sales
would up by 9.1% against FY13.
Highlights/Snapshots of the forecasts are provided on the next page.

Snapshot of Forecasted Income Statement for Khaitan Electricals Ltd.


All
Amounts
in
Millions
of Rs.

FY15

FY14

FY13

FY12

FY11

FY10

Net
Sales

4884.19

4650.4

5117.99

4413.42

4659.29

3569.33

PBT

18.17

17.31

90.67

-165.2

87.92

56.22

Tax

6.36

6.06

9.46

-2.91

32.85

20.29

PAT

11.81

11.25

81.21

-162.29

55.06

35.92

Snapshot of Forecasted Income Statement for TTK Prestige Ltd.


All
Amounts
in
Millions
of Rs.

FY15

FY14

FY13

FY12

FY11

FY10

Net
Sales

14205.75

14826.67

13584.84

11034.36

7635.63

5079.42

PBT

2096.57

2188.23

1852.05

1632.59

1203.54

754.04

Tax

733.80

765.88

521.15

498.82

366.02

229.66

PAT

1362.77

1422.35

1330.90

1133.78

837.52

524.38

References:

http://www.ttkprestige.com

http://www.khaitan.com

http://www.moneycontrol.com

http://www.aceanalyser.com

http://www.crisil.com