Stove Kraft Q1 Results Review - Cost Rationalisation Helps In Margin Expansion: Nirmal Bang

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Nirmal Bang Report.While Stove Kraft Ltd.'s topline was in line with our estimates, Ebitda margin was above our estimates by 544 basis points due to lower-than-expected other expenses.The management cited healthy primary order booking for the upcoming festive sales. It expects Q2 and Q3 of FY25 to be stronger quarters on the back of the same, and contributing ~60% of the overall annual topline.Stove Kraft opened 117 stores in FY24 versus a target of 7-8 stores per month. The current total store count (as on 30th June 2024) stands at 191, with ~20 new stores added in Q1 FY25. The company also converted 23 stores from Company Owned Company Operated to Company Owned Franchise Operated model in Q1 FY25, and this run-rate is expected to continue.FY25 topline guidance stands at ~19% (past four-five years’ topline compound annual growth rate, and the company aspires to touch ~11% – in FY25.The management’s strategy is to cater to the mass segment and offer them branded products at reasonable price points. While margin expansion is a positive, the stock has run up ~50% YTDCY24. We maintain Accumulate with a revised target price of Rs 730. This implies a price to earning of 24 times on June 2026E earning per share..Click on the attachment to read the full report:.IRCTC Q1 Results: Profit, Revenue Meet Estimates.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Stove Kraft Q1 Results Review - Cost Rationalisation Helps In Margin Expansion: Nirmal Bang

While margin expansion is a positive, the stock has run up ~50% year-to-date CY24, adds the brokerage.

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