Stove Kraft Q3 Results Review - Exports To Be Growth Driver; Yes Securities Reiterates 'Buy' On The Stock

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Yes Securities Report

Stove Kraft Ltd. has delivered marginally lower than expected revenue growth with revenue growing 11.7% yoY (1.8% below estimates). Decline in induction cooktop (-10.7%) and Nonstick cookware (-3.0%) have resulted in below than expected revenue growth, while appliances continue to see strong growth of 28.6%.

Management maintains is reiterating its stance of faster than industry growth and is confident of achieving more than 10% growth. Gross margin has contracted by 95 bps YoY to 37.6%, higher discounts and offers post the festive season has resulted in lower gross margins.

Ebitda margin at 10% has lower as there have been higher marketing and maintenance expenses incurred during the quarter. The company is aiming to reach Ebitda margin of 14% in next three-five years in the interim the company will operate in Ebitda range of 11-14%.

Stove Kraft is working towards bringing down receivable days and inventory days thereby able to bring down borrowings considerably.

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