The household appliances sector in India is rapidly evolving, reaching a market value of approximately USD 77.74 billion in 2024. With a projected compound annual growth rate (CAGR) of 5.70%, it is expected to grow to USD 127.07 billion by 2034, driven by urbanization and rising disposable incomes.
With a market capitalization of Rs 2,826.42 crore, the shares of Stove Kraft Ltd were trading at Rs 855.00 per share, increasing around 2.63 percent as compared to the previous closing price of Rs 833.10 apiece.
Matter explanation
As of December 2024, a prominent ace investor Dolly Khanna bought fresh 354,541 equity shares which is equivalent to 1.1 percent of the company. Moreover, Ashish Kacholia also holds 5,76,916 equity shares, representing 1.75 percent in the company.
Operational Insights
The company reported 33% QoQ revenue growth driven by manufacturing efficiencies, stable raw material costs, and operational leverage. Expanding its COCO and COFO retail models, it added 22 new stores, reaching 213 stores across 13 states and 54 cities, boosting margins.
Market Dynamic
The management remains confident in its strong position in Kitchen and Home Appliances, supported by a diverse product range despite China-related challenges. Festive demand, favorable economic conditions, and policies drive growth, with channel contributions of 28% general trade, 40% e-commerce, and others.
New developments
The company is focusing on attracting younger customers through new products and categories, trialing the COFO model with two franchisee-operated stores, and investing significantly in marketing to enhance brand visibility, particularly for the Pigeon brand, which has started delivering positive results.
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Margin guidance
Management aims to enhance EBITDA margins to 11%-14% medium term through operating leverage and expanded in-house manufacturing. Gross margins are projected to improve from 38% to 40% within 4-6 quarters, reflecting ongoing efficiency gains and strategic cost optimizations.
Export Strategy
Exports contribute 10% to revenues, with plans to boost this through new products aligned with global trends. Management anticipates growth as new orders begin generating revenues from Q4 FY 2025, reflecting optimism about expanding the export segment.
Management comment
Management projects 14%-15% volume growth for the year, exceeding industry averages, driven by strong post-festive demand. The company aims to leverage manufacturing capabilities and expand its market presence, maintaining an optimistic outlook for sustained growth and enhanced competitiveness.
Written by – Abhishek
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