Stove Kraft

Stove Kraft reported a robust Q4 FY26, with consolidated revenue growing 32.4% YoY to INR 414.5 crores and PAT surging 317.8% YoY to INR 6.1 crores. For the full fiscal year 2026, revenue increased 10.9% to INR 1,607.4 crores, and PAT grew 9.1% to INR 42 crores. The company achieved a gross profit margin of 38.7% for FY26, an increase of 164 basis points YoY, demonstrating improved operational efficiency.

Small appliances and induction cooktops were significant growth drivers, contributing approximately 56% of total revenue in Q4 FY26, with induction cooktops alone accounting for 15.5%. Management noted a surge in demand for these products, partly influenced by the Iran war, and highlighted their transition from optional to necessary household items. The company also launched the Pigeon Ignite 3,500 watt heavy-duty infrared cooktop to cater to the HoReCa segment.

The channel mix for Q4 FY26 saw e-commerce as the largest contributor at 34.3%, followed by general trade (32.3%) and modern retail (11.3%). For the full year FY26, e-commerce contributed 35.9% and OEM exports 10.7%. Stovekraft expanded its Pigeon exclusive brand outlets (EBOs) to 329 stores across 151 cities by March 31, 2026, adding 67 net stores in FY26, and aims to reach 500 stores by 2027. Average sales per retail store increased from INR 3.8 lakhs to INR 4.7 lakhs, with incremental growth beyond INR 2.5 lakhs directly contributing to the bottom line.

The company reported significant improvements in working capital, with both inventory and debtor days reduced by 8 each, alongside an increase in creditor days. This was achieved through channel financing for receivables, payable finance partners for vendors, and stringent inventory controls, with management confident of maintaining working capital days below 30. Total capex for FY26 was INR 70-75 crores (actual cash outflow), and a planned capex of INR 40 crores is projected for FY27, primarily for small assembly lines, testing lines, and retail expansion.

All investments related to the IKEA business were capitalized by March 31, 2026, with the first product line expected to commence production and revenue recognition in Q1 FY27. Management projects INR 40-50 crores from IKEA by the end of FY27, with a full-capacity potential of INR 200-250 crores. OEM exports contributed 8.7% in Q4 FY26 and 10.7% for FY26, with expectations to return to over 12% contribution and grow faster than the company rate, supported by US tariff reductions.

Stove Kraft is confident in protecting an 11% EBITDA margin and improving it further, targeting a 42% gross margin within 2-3 years through 1% annual improvement. The company projects upwards of 15% revenue growth for FY27, driven by strong performance in small appliances, stabilizing exports, and the new IKEA business. Price hikes of approximately 10% have been implemented in the current quarter to pass on commodity cost increases.

The reduction of GST to 5% for certain products (from 18%) was identified as a significant factor driving demand, particularly benefiting organized players like Stovekraft. This change created a strong competitive advantage by challenging unorganized players and attracting price-conscious customers to quality products, contributing to continuous growth across categories.

The company has achieved 97-98% in-house manufacturing, leveraging its backward integrated setup to manage supply chain disruptions. Induction cooktop capacity has doubled from 2 million units last year to a current run rate of 4-5 million units, though demand still exceeds capability. Stovekraft maintains strong sourcing capabilities from China for critical components like crystalline glass, ensuring resilience in its supply chain.