TTK Prestige, Butterfly Gandhimathi, Stove Kraft Shares Jump Up To 15% — Here's Why

Shares of kitchen appliance makers rose sharply on Wednesday after the government moved to divert gas supplies to protect cooking fuel availability amid disruptions caused by the Iran war. TTK Prestige Ltd., Butterfly Gandhimathi Appliances Ltd. and Stove Kraft Ltd. gained as much as 15% in intraday trade even as the broader market declined.

The gains follow a government decision to redirect natural gas supplies to priority sectors after the widening conflict in West Asia disrupted imports. Rajendra Gandhi, managing director of Stove Kraft, said the shortage of LPG has led to a sharp increase in demand for alternative cooking solutions. "There is huge demand for induction cook top," Gandhi said. "We are seeing a three-times surge in induction cook top demand and also a huge surge in electric cook top."

He added that the company is also seeing a rise in raw material costs. "There is rise in raw material prices which will be passed to customers over a period of time," Gandhi said. "Gross margins might be impacted by 1-2%."

TTK Prestige rose as much as 14.8% to Rs 556.30. Butterfly Gandhimathi Appliances climbed up to 9.6% to Rs 663, while Stove Kraft advanced as much as 7.9% to Rs 525. The rally came even as the NSE Nifty 50 fell as much as 1.2% to 23,969 during the session.

India consumes around 31.3 million tonnes of LPG annually. About 87% is used in domestic kitchens and the remaining share in commercial establishments such as hotels and restaurants. Nearly 62% of the country's LPG requirement is met through imports. The stalling of tanker movements through the Strait of Hormuz has disrupted about 60 mmscmd of supply from the Middle East.

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The oil ministry, in a gazette notification, ordered available gas to be diverted from non-priority sectors to essential users to ensure continuity of cooking fuel supplies.

Authorities have reprioritised liquefied natural gas supply to meet 100% of the demand for LPG production, compressed natural gas and piped cooking gas. Commercial users will receive about 80% of their requirement, while fertiliser plants will get around 70% of their needs. The government has also invoked emergency powers to redirect LPG supply away from industrial users and toward households.An oil ministry order issued on Tuesday barred refiners and petrochemical plants from using LPG as feedstock and directed them to maximise LPG production. The measure expands earlier directives aimed at ensuring domestic LPG availability during the supply disruption.

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Commercial Sector Hit

Restaurant bodies and LPG distributors said the shortage is largely affecting commercial cylinders used by hotels, restaurants and catering services, while household supply continues to receive priority.

The Bangalore Hotels Association said the halt in commercial cylinder supply could disrupt services that depend on food establishments. “The supply of gas cylinders for commercial use has been stopped from today. Essential services like senior citizens, students and hospitals rely on it. Immediate action is expected from Union Ministers to resume commercial gas supply,” the association said.

RK Gupta, national vice president of the LPG Association, said commercial cylinders were not being issued to most establishments.

ALSO READ: 'Do Not Panic': Centre Urges Public To Stay Calm Amid Commercial LPG Shortage Concerns

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