Detailed Narrative
Q1 FY27 Performance Overview and Growth Drivers
Stove Kraft reported its strongest-ever first-quarter performance in Q1 FY27, with revenue growing 41.3% year-on-year to ₹480.6 crores. This growth significantly outpaced the industry despite external headwinds🌐 like geopolitical tensions and commodity price volatility. The company achieved a 50.9% year-on-year increase in EBITDA to ₹53.8 crores, with EBITDA margins expanding by 71 basis points to 11.2%. PAT also saw a robust increase of 63.5% year-on-year, reaching ₹17.1 crores, driven by operating and financial leverage.
Product Category Performance and Premiumization Focus
Growth was broad-based across key product categories, with Induction Cooktops showing exceptional 315.9% year-on-year growth and contributing 27% to total revenues, indicating a structural shift in consumer adoption. Pressure Cookers grew by 41.3% year-on-year, and Non-stick Cookers recorded 21.8% growth, accounting for 21% of revenues. While Small Appliances and Gas Cooktops experienced temporary moderation due to resource reallocation, they still represent 27.5% of the revenue mix. The company emphasized premiumization as a key growth theme, investing in differentiated products and technology-led kitchen solutions to improve product mix and realizations.
Channel Sales and Retail Expansion Strategy
Stove Kraft's diversified distribution portfolio delivered strong results. General trade saw an impressive 56.2% year-on-year growth, the strongest in three years, contributing 28.6% to total revenues. E-commerce remained the largest channel at 31.8% of revenues, while modern retail contributed 13%. The retail channel, including overall retail, grew 86.3% year-on-year. The company added 17 new franchise stores in Q1 and aims to establish 500 standalone Pigeon exclusive outlets by the end of 2027, enhancing brand visibility and consumer accessibility.
Margin Expansion and Cost Management
Gross margins expanded by 127 basis points year-on-year, reflecting strong brand portfolio, pricing discipline, and operational excellence. EBITDA margins improved by 71 basis points to 11.2%. Management confirmed a cost-plus model, passing on input cost pressures through price corrections in both domestic and export markets. They expressed confidence in maintaining current margin levels and improving gross margins by at least 1% year-on-year, targeting 40-42% on an ongoing basis, with PAT margins aiming for 7% in two to three years.
Strategic Initiatives: Chinese JV and Manufacturing Capabilities
The company highlighted its strong integrated manufacturing capabilities as a differentiator, particularly in addressing demand for Induction Cooktops. A joint venture with a Chinese entity is underway, with a manufacturing arrangement in China for Triply Cookware and pressure cooker circles. This facility, among the largest in China, has started machine installation, with commercial production expected by the end of calendar year or before December, addressing a significant global and domestic demand for these products.
Working Capital and Other Expenses
Net working capital days increased to 45 in Q1 FY27, primarily due to strategic inventory buildup to prepare for the festive season and anticipated demand. Management clarified that this is a proactive approach to minimize supply disruption and will normalize📎 with a shift to straight-line production. Other expenses, including job work charges, marketing, commission payouts, and advanced CSR, were elevated in Q1, increasing by approximately 3.5% of sales, but are expected to return to normal levels in subsequent quarters as outsourced manufacturing shifts in-house and CSR is annualized.