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Nirmal Bang Report
Stove Kraft Ltd. reported Q2 FY23 revenue of Rs 4.06 billion, up 11.9% YoY (13.9% below our estimate).
Gross margin improved by 30 bps YoY to 32.5%. Ebitda stood at Rs 460 million, up 13.4% YoY. Ebitda margin expanded marginally by 10 bps YoY to 11.3%, above our estimate of 10.7%.
Consequently, the profit after tax improved by 13% YoY to Rs 259 million, but it was below our estimate of Rs 282 million. Stove Kraft added 6,605 retail outlets in Q2 FY23.
During Q2 FY23, e-commerce channel's contribution stood 36%. The management highlighted that demand remains resilient and it has guided for double-digit topline growth for FY23-FY24 (with 10% volume growth guidance for H2 FY23).
The management has further maintained 11% Ebitda margin guidance for FY23. We continue to believe that Stove Kraft can outperform industry growth going forward, driven by distribution expansion, new product launches and exports.
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