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Yes Securities Report
Stove Kraft Ltd. has delivered inline revenue growth, while it has surprised positively on the margin front, with gross margin surpassing management guidance of 35% during the quarter. Increased in-house production, lower commodity costs, price corrections and increased average selling price's has led to higher margin.
Management is now confident of achieving its full year gross margin guidance of 35% given the strong performance of Q1 in seasonally weak quarter.
Stove Kraft also expects double digit revenue growth with focus on value segment and passing benefits of the increased efficiency by means of lower pricing, while maintaining gross margins at 35%.
Company in its endeavor to build its retail network is continues to add company owned company operated stores with addition of 25 stores in Q1.
Costs dynamics of these stores are very low and 90% of the company owned company operated stores are breaking even on an average basis in three months of time.
Stove Kraft is looking to launch new products in the market and maintain the growth rates in double digits with aspirations to clock 11% Ebitda margin in FY24.
We continue to maintain 'Buy' as current risk-reward is favorable and the stock is trading at price/earning of 15.4 times on FY25 earnings.
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