homevideos Newsretail NewsDependence on exports tapering; margins to stay in 14 15% range: Stovekraft
Dependence on exports tapering; margins to stay in 14-15% range: Stovekraft
Rajendra Gandhi, MD, Stovekraft is very upbeat on consumption and demand as he said on August 31 that consumer spending is gaining a lot of momentum.
“All the channels that we are operating in are operating normally, the festive season is also setting in with the advent of Onam and the space that we are operating in, the industry itself is witnessing very high growth,” he told CNBC-TV18 and added that one can look forward to good times.
The stock of Stovekraft, an Indian firm that manufactures cooking appliances under the Pigeon and Gilma brands, is up 15 percent.
Gandhi is also confident of achieving Rs 250-300 crore in revenue every quarter, though in the first quarter, the company could not achieve the target due to some challenges, he said.
When asked about input costs and margins, he said, “Majority of our revenues are from manufacturing and dependence on import is tapering down continuously. There is a huge price increase on the sea freight and the impact of supply-side issues, so there is a cost escalation in input costs. We are a cost-plus company, and there could be some lapse in passing on the cost price increase but we have done that in every quarter.”
On the margin front, he said Stovekraft would be able to stay in the 14-15 percent range. “The advantage is as the revenue number goes up for us, majority of it flows through to EBITDA, including margins. So I can say that with the enhanced revenue number, in spite of there being pressures on costs, we are at the same number that we are currently at, that is, 13-14 percent.”
The firm had earlier said it would grow between 15-25 percent. Gandhi said the first quarter was not comparable because the last year's first quarter was very bad due to the full shutdown and this time, though there were lockdown-like situations, institutions were partially working. “So we will be able to grow at the higher-end or higher than what we believe we can grow,” he said.
Stovekraft said it would be difficult for him to give a forward-looking statement but he asserted that there are good times ahead. “The demand is very strong, the consumption is very good, consumers are spending, all the channels are operating normally. Overall as the industry is doing extremely well. We of course are able to perform better than industry, we are growing higher of the industry,” he said.
For the full discussion, watch the accompanying video
(Edited by : Kanishka Sarkar)
First Published: Aug 31, 2021 9:06 PM IST
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