Cooking appliances maker Stove Kraft may miss FY24 revenue, margin guidance

Karnataka-based Stove Kraft that manufactures cooking appliances under Pigeon and Gilma brands may be unable to meet its revenue growth and margin guidance for the current financial year (FY24).

The company was earlier aiming for a double-digit revenue growth for the year with earnings before interest, tax, depreciation, and amortisation (EBITDA) margin at around 11%. However, Rajendra Gandhi, MD of the company in an interview with CNBC-TV18 said that given the subdued demand conditions so far this year, the revenue growth for the year, "we will be able to grow a little closer to 10%, if not 10%."

For the first nine months of FY24, the company's revenue has grown at around 3-4%.

Gupta expects the company to come back to its historical growth range of 20% soon. He noted that the gross margins have increased to 37-38% from 30-33%. "There has been a little overrun with several of initiatives on new product launches, and also on the people side. So on these two things, we have become very cognizant of these costs. We believe that we'll be able to control this discourse." he said adding that with increased focus on these aspects, the company hopes to improve margins to 11% in the next financial year (FY25).

For the third quarter (Q3FY24), the appliances maker's revenue increased 11% year-on-year (YoY) to ₹361.6 crore from ₹324.5 crore. Profit after tax declined 3% YoY to ₹6.8 crore from ₹7.8 crore. EBITDA grew 18% YoY to ₹30 crore from ₹25 crore, with EBITDA margin expanding to 8.3% from 7.8% in the same quarter last year.

On November 27, the company faced a temporary disruption in its operations due to an Income Tax Department search at its office premises and manufacturing plants. Stove Kraft said the I-T Department completed its search, and the company's manufacturing plants in Bengaluru and Baddi experienced disruptions on November 22-26 and November 21-23, respectively.

The interruption was a consequence of the tax-related scrutiny, causing a temporary halt in manufacturing operations, the company said.

With a market capitalisation of ₹1,535.09 crore, Stove Kraft is an Indian company - established in 1999. It is based in Bangalore, Karnataka, and offers a diverse range of cooking appliances, including mixer grinders, pressure cookers, cooktops, toasters, chimneys, and kitchen utensils.