Stove Kraft Ltd
Value Pick Multibagger Best Stock to buy for long term Investment
Market Cap
₹ 2,806 Cr.
Current Price
₹ 847
52-Week Range
₹ 410 – ₹ 977
P/E Ratio
81.7
Key Financial Metrics
| Metric | Value |
|---|---|
| Book Value | ₹ 138 |
| Dividend Yield | 0.30% |
| ROCE | 11.3% |
| ROE | 8.32% |
| Debt | ₹ 295 Cr. |
| Sales | ₹ 1,420 Cr. |
Company Overview
Stove Kraft Ltd is a leading player in the kitchen and home appliance segment, with renowned brands like “Pigeon” and “Gilma.” Known for its wide product range, the company serves diverse consumer needs in cookware, small appliances, and kitchen solutions. With a strong distribution network and emphasis on innovation, Stove Kraft has positioned itself as a household name in India.
Future Growth Drivers
- Expansion of Distribution Network: Targeting tier-2 and tier-3 cities to capture untapped markets
- Product Portfolio Diversification: Focus on high-margin premium cookware and smart appliances
- Brand Development: Aggressive marketing campaigns for brand strengthening
- Export Growth: Expanding presence in Middle East, Africa, and Southeast Asia
Planned Expansions
The company plans to invest ₹150 Cr. in capital expenditure over the next two years, focusing on:
- Capacity Enhancement: New production facilities
- Technology Integration: Advanced machinery implementation
- Sustainability Initiatives: Eco-friendly production processes
Financial Projections
- Revenue Growth: CAGR of 12-15% over FY24-FY27
- EBITDA Margins: 150-200 basis points improvement
- Net Profit: Annual growth of 18-20%
- ROE: Expected to reach 12% by FY27
Competitive Landscape
Major competitors include:
- TTK Prestige: Strong brand loyalty and premium positioning
- Hawkins Cookers: Trusted legacy brand with robust quality perception
- Butterfly Gandhimathi Appliances: Niche player in regional markets
Risk Factors
- Raw Material Volatility: Price fluctuations in aluminum and steel
- High Valuation: Current P/E ratio of 81.7
- Debt Concerns: ₹295 Cr. debt level
- Sector-Specific Risks: Dependence on discretionary spending
Valuation Estimate
Using a forward P/E of 70 and projected EPS of ₹16, the fair value is estimated at ₹1120. However, considering sector volatility and macroeconomic conditions, a more conservative valuation of ₹950-₹1000 is advised for entry.
Investment Thesis
Stove Kraft Ltd offers a compelling investment case with its focus on innovation, market expansion, and operational efficiency. The company’s strategic initiatives in premiumization and exports present significant long-term growth opportunities. However, its high valuation and competitive risks necessitate cautious optimism. Investors with a long-term horizon can consider the stock during market corrections.
Disclaimer: This report is intended for informational purposes only and does not constitute investment advice. Please consult a financial advisor or conduct independent research before making investment decisions.
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