Bengaluru-based kitchen appliance maker Stovekraft expects contribution from retail sales to overall revenue to rise up to 10% in the upcoming quarters, driven by strong addition of new stores.
The company expects retail sales, which contributes 4% to the overall revenue, to expand to 8–10% in the next 10 quarters, according to its Managing Director Rajendra Gandhi.
Gandhi told NDTV Profit that the retail segment is registering the highest growth among all divisions, including e-commerce. “Retail is a high growth area for us and relatively higher gross margin as well. Because of the small base, retail has a faster growth rate than e-commerce,” Gandhi explained.
“When we started the year, retail contribution was 2% and in the next 8–10 quarters this will move towards a 10% contribution to our revenue,” he said.
In the September quarter of the current fiscal, Stovekraft's revenue stood at Rs 418.3 crore, up 10.1% against Rs 379.8 crore in the year-ago quarter.
Net profit, however, remained flat at Rs 16.7 crore in the second quarter of FY2024–25, against Rs 16.5 crore in the corresponding period of the preceding fiscal.
As for the segment-wise contribution to overall revenue, in the September quarter, the small appliances business added the most. The company saw 37% of the total revenue coming in from small appliances, followed by 23% from non-stick cookware and 22% from the pressure cooker.
Stovekraft—which markets a wide range of kitchen appliances under its flagship brand Pigeon—has been opening new stores every quarter.
“Every quarter we open about 25–30 new stores and we have moved to a different model, which is the company-owned and franchise-operated model. There is no cash outgo on the expansion of these stores. On an annual basis, you will see close to 100 stores every year. In the next three years, you will definitely see 300 stores on top of the current 200 stores we have,” the top executive said.
Stovekraft added 22 exclusive Pigeon stores in the quarter ended September, making its entry into Gujarat and Punjab markets, according to the company's investor presentation. It also continued to increase its footprint in existing markets like Delhi-NCR and south India.
Gandhi further pointed out that Stovekraft's company-owned and company-operated stores stood at 171 in the beginning of last year.
In terms of brands, Pigeon continues to be a growth driver, raking in about 95% of the revenue.
“The larger part of our growth will continue to come from Pigeon. The Gilma and Black Decker brands are at different levels. Both these brands put together contribute only 5% to our revenue,” Gandhi said.
Talking about festive sales, the Stovekraft MD noted that demand was better in October compared to the previous month.
“At our retail stores, we see more walk-ins and there is a good demand from e-commerce channels,” he said.
Shares of Stovekraft Ltd. plunged up to 9% in trade on Tuesday to hit an intraday low of Rs 745.25 apiece on the NSE. However, the stock recovered some losses to close 5.22% lower at Rs 776 apiece on the NSE, compared to 0.52% gain in benchmark Nifty.
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