Event Participants
Executives
4 Rajendra Gandhi (Managing Director), Chandru Kalro (Vice Chairperson), Subhadeep Pal (Chief Financial Officer), Hemant Kumar Kothari (Vice President, Investor Relations)
Analysts
9 Anand Mundra (Soar Wealth), Madhav Agarwal (Emerge Capital), Manoj Gori (Equirus Capital), Nikhat Koor (Dolat Capital Market), Rehan Saiyyed (Trinetra Asset Managers), Resha Mehta (GreenEdge Wealth Services), Rohan Advant (Prad Capital), Shahzad Shroff (Demeter Advisors), Vinod Krishna (Avendus Wealth)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹480.6 crores | Strongest ever Q1; +41.3% YoY vs ₹340.1 crores; broad-based growth across categories and channels |
| Gross Profit | ₹190.4 crores | +46% YoY; gross margin expanded 127 bps YoY on pricing discipline and operational excellence |
| EBITDA | ₹53.8 crores | +50.9% YoY vs ₹35.6 crores; margin improved 71 bps YoY to 11.2% on operating leverage |
| PAT | ₹17.1 crores | +63.5% YoY vs ₹10.4 crores; PAT margin at 3.5% |
| ROCE | 13.9% | Improved from 12.6% YoY on higher capital productivity |
| ROE | 9.3% | Improved from 8.3% YoY; management targeting 18-20% as PAT margin reaches 7-8% |
| Net Working Capital | 45 days | Improved from 69 days in Q1 FY26; up vs Q4 FY26 due to strategic festive season inventory buildup |
| Finance Cost | ~₹7 crores (Q1) | Down from 2.1% to 1.6% of sales YoY; increase due to asset lease taken in Q3 FY26 (₹2 crores), offset by working capital cost savings |
| Other Expenses | ~18% of sales | +3.5% of sales YoY: job work charges (+1.2%), marketing spend (+1.2%), franchise commissions (+1%), one-time CSR (₹94 lakhs); expected to normalize |
| Induction Cooktop Revenue Mix | 27% of revenue | +315.9% YoY; structurally higher than pre-war levels; expected at 20%+ for full year |
| Non-Stick Cookware Mix | 21% of revenue | +21.8% YoY; strong brand acceptance and premiumization |
| Small Appliances Mix | 27.5% of revenue | Temporary moderation due to capacity reallocation to induction cooktops |
| Channel Mix | E-com 31.8%, GT 28.6%, Exports 15.3%, MR 13%, EBO 8.7% | General trade +56.2% YoY (3-year best); EBO +86.3% YoY, 88.5% 3-yr CAGR; 17 new stores added in quarter |
| Export Contribution | 15.3% of revenue | Growing; targeted to reach 15%+ of revenue over next 2 years (incl. IKEA, Walmart as deemed exports) |
Geographic & Segment Commentary
Induction Cooktop: Exceptional +315.9% YoY growth, contributing 27% of revenues. Demand remains substantially above pre-war levels, indicating structural shift. Management confident of ~2x YoY growth for FY27; annualized contribution expected at 20%+ of revenue. Demonstrated supply chain agility during Southeast Asian supply crisis.
Pressure Cooker: Grew 41.3% YoY; highest volume player already; additional capacity being added to meet unmet demand. Premiumization visible with stainless steel growing faster than aluminium; triply line (automated) expected ready by Q3 FY27 end.
Non-Stick Cookware & Cookers: +21.8% YoY growth, 21% of revenue; driven by GST benefit passing through, brand acceptance, and product innovation. China JV to backward-integrate triply circles (commercial production by Dec 2026).
Small Appliances & Gas Cooktops: Temporary moderation due to capacity reallocation toward induction cooktops (27.5% of revenue). Now stabilizing with augmented capacity; management confident of growth resumption; mixer grinders and chimneys (BLDC motors) identified as key growth categories.
Channels: General trade strongest growth in 3 years (+56.2% YoY), signaling recovery and improving productivity. E-commerce largest channel at 31.8% of revenue; EBOs growing 86.3% YoY with franchise mix moving from 43% to 55-56%. Exports returning to normal growth trajectory post tariff disruption.
Company-Specific & Strategic Commentary
Retail Expansion: Added 17 new franchise stores in Q1; on track for 500 Pigeon exclusive outlets by year-end 2027; average sales per store trending at ₹4.3 lakhs vs ₹2.5 lakhs breakeven, targeting ₹5 lakhs sustainable.
China JV / Backward Integration: Wholly-owned subsidiary with Chinese JV partner (one of largest triply facilities in China); installing machines for triply circles for pressure cookers and cookware; commercial production expected by December 2026; addresses global shortage and strengthens cost advantage.
Premiumization Strategy: Exchange/upgrade programs driving Q1 sales; focus on BLDC chimney motors, induction cooking, triply cookware, rice cookers, OTG, mixer grinders (new range imminent); non-induction growth targeted at ~20%.
Manufacturing Agility: Shipped induction cooktops during Southeast Asian supply chain crisis; job work outsourcing during Q1 (+1.2% of sales) to meet demand; returning to in-house manufacturing; integrated factory capabilities (metalworking, coating, electronics) enable rapid product innovation.
Pricing Discipline: Cost-plus model with quarterly procurement arrangements; passed on input cost increases to both domestic and export markets; maintaining ~1% gross margin improvement annually.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 15-20% ongoing | Management confident of sustaining 15%+ growth on 10-year CAGR of 17-18%; high demand visibility across all three categories |
| Induction Cooktop Growth | ~2x YoY for FY27 | Annualized contribution expected at 20%+ of total revenue |
| Gross Margin | 40-42% steady state | Improving ~1% annually through pricing discipline and premiumization; current expansion driven by cost-plus model |
| EBITDA Margin | 14-15% in next 2-3 years | Supported by operating leverage, product mix, and improving gross margins |
| PAT Margin | 7-8% in 2-3 years | Management guiding toward this trajectory led by financial leverage and margin expansion |
| Export Contribution | 15%+ of revenue in 2 years | Recovery from FY26 tariff disruption; IKEA supplies starting Q2 FY27; Walmart, UK retailer ongoing |
| Working Capital | Continued improvement | Moving toward straight-line production model; Q1 inventory buildup for festive season (Q2/Q3) |
| Q2 FY27 | Strong growth expected | Festive season spread across Onam (Aug), Dussehra (Oct), Diwali (Nov); all manufacturing facilities operational |
Risks & Constraints
| Risk | Context |
|---|---|
| Input Cost Inflation | Continued raw material cost pressure and rupee depreciation; partially mitigated by quarterly procurement arrangements and price increases passed to customers (domestic and export). Management confident of sustaining ~1% gross margin improvement YoY |
| Supply Chain / Geopolitical | Global economic uncertainty, geopolitical tensions, and currency fluctuations; supply chain disruptions (e.g., LPG crisis driving induction cooktop demand) could impact both demand and input availability. Management addressed via backward integration, China JV, and flexible manufacturing |
| Competitive / Category Growth Normalization | Post-COVID replacement cycle demand, GST tailwind, and induction cooktop spike may normalize; base effects in H2 FY27 could moderate growth. Management counters with innovation pipeline and 15%+ growth target across categories |
| Key Person Dependency / Execution | Aggressive store expansion (500 EBOs), China JV ramp-up, and new product launches (mixer grinders) require disciplined execution; delivery timelines (Dec 2026 for triply) could slip |
| Regulatory / Policy | GST rate reductions (benefit) and potential tariff policy changes (export) remain watch items; CSR one-time spend indicates compliance costs |
Q&A Highlights
Growth Outlook & Sustainability
- Question: With induction cooktop surge from Iran war and GST benefits, how sustainable are growth rates? Non-induction growth at ~20% - what gives confidence? (Vinod Krishna, Avendus Wealth; Resha Mehta, GreenEdge Wealth)
- Answer: Management cited internal levers: cost control, distribution, and brand combined in one company; 10-year CAGR of 17-18%; external factors: economy growth at middle/upper-middle segments, upgrade/impulse buying; internal: most backward-integrated factory (metalworking, coating, electronics) enabling agility. Target 15%+ long-term growth. (Rajendra Gandhi, Chandru Kalro)
- Question: On high base, should we model 8-10% growth from Q3/Q4 onwards? (Resha Mehta)
- Answer: No - management guiding 15%+ consistent growth across categories; non-induction growth targeted at nearly 20%; induction expected 2x YoY for FY27. (Chandru Kalro)
Margins & Cost Structure
- Question: What drove 100 bps gross margin expansion? Blended inflation vs price hikes? (Resha Mehta)
- Answer: Cost-plus model with quarterly procurement; input cost increases passed on with additional margin included; export prices corrected upward too. (Rajendra Gandhi)
- Question: Can we sustain 11% EBITDA margin and reach 14% in 3 years? (Nikhat Koor, Dolat)
- Answer: Yes - endeavor is to increase margin at least 1% YoY; 14-15% EBITDA margin in 2-3 years realistic; PAT margin trajectory toward 7%. (Rajendra Gandhi)
- Question: How to get from 3.5% to 7-8% PAT margin? (Anand Mundra)
- Answer: Gross margin should settle at 40-42%; financial leverage with fixed costs below EBITDA will drive incremental flow-through; management targeting 18-20% ROE. (Rajendra Gandhi)
Other Expenses Rationale
- Question: Why did other expenses increase significantly? (Anand Mundra)
- Answer: Job work charges (+1.2% of sales) for outsourced manufacturing to meet induction demand; marketing spend (+1.2% of sales) at 3.5-3.6% of sales; franchise commission payout up ~1% (franchise mix 43%→55-56%); one-time CSR ₹94 lakhs (annualized in coming quarters). Net-net 18% of sales. (Subhadeep Pal, CFO)
- Question: Will job work costs sustain? (Anand Mundra)
- Answer: No - short-term elevated; will reduce as in-house manufacturing ramps; all new capacities operational. (Rajendra Gandhi)
Export & IKEA
- Question: How are exports shaping up post-tariff disruption? When will IKEA start? (Vinod Krishna; Shahzad Shroff)
- Answer: Exports back to normal growth; IKEA supplies starting Q2 FY27 (after Q1 reported); IKEA categorized as deemed export with Walmart/others; export contribution guided to 15%+ of revenue in 2 years. (Rajendra Gandhi)
- Question: Could IKEA be 5-6% of business? (Anand Mundra)
- Answer: Yes, at full scale IKEA may be 5-6% of revenue; but multiple growth drivers exist - chimneys, rice cookers, OTG, mixer grinders (new range), triply cookware, EBO expansion, general trade recovery. (Rajendra Gandhi)
Working Capital & Inventory
- Question: Where do working capital days settle by FY27 end? (Rehan Saiyyed)
- Answer: Q1 buildup is seasonal for festive demand; improving to 45 days (vs 69 days in Q1 FY26); moving to straight-line production model; management confident of continued improvement. (Rajendra Gandhi)
China JV & Manufacturing
- Question: Details and timeline for China JV? (Anand Mundra)
- Answer: WoS with Chinese JV partner - one of largest triply facilities in China; machines being installed; commercial production of triply circles by December 2026; addresses global triply shortage and backward-integrates pressure cooker/cookware business. (Rajendra Gandhi)
EBO Economics
- Question: What is breakeven and current sales per store? (Vinod Krishna)
- Answer: Breakeven at ₹2.5 lakhs/month; currently trending at ₹4.3 lakhs; target ₹5 lakhs sustainable; 17 new stores added in Q1; on track for 500 stores by end-2027. (Rajendra Gandhi)
Regional Performance
- Question: Growth in South vs non-South markets? (Nikhat Koor)
- Answer: South is largest base (~50% of revenue); rest of India growing faster in percentage terms; South strongest, followed by West, North, East; general trade growth opportunity larger outside South. (Rajendra Gandhi)
Key Takeaway
Stove Kraft delivered its strongest-ever Q1 with revenue of ₹480.6 crores (+41.3% YoY), driven by induction cooktop growth of 315.9% (27% of revenue), pressure cookers (+41.3%), and non-stick cookware (+21.8%). EBITDA grew 50.9% to ₹53.8 crores (11.2% margin, +71 bps YoY) and PAT grew 63.5% to ₹17.1 crores, with ROCE improving to 13.9% and ROE to 9.3%. The company is executing on multiple structural growth levers: 17 new EBO stores added (86% YoY channel growth, trending at ₹4.3 lakhs per store monthly sales), general trade returning with 56.2% growth (3-year best), China JV for triply backward integration on track for December 2026, IKEA supplies starting Q2, and a significant innovation pipeline including mixer grinders and BLDC chimneys. Management guided for 15-20% revenue growth, gross margins settling at 40-42%, 14-15% EBITDA margins in 2-3 years, and PAT margin trajectory toward 7-8% (18-20% ROE). Key watch points: input cost inflation pass-through effectiveness, normalization of induction demand post-spike, working capital management during festive inventory buildup, and successful execution of manufacturing capacity additions and China JV timelines.