Stove Kraft Q4 Results Review - COCO Stores To Drive Both Topline, Margins: Nirmal Bang

Nirmal Bang Report

While Stove Kraft Ltd.'s topline was in line with our estimates, Ebitda margin was above our estimates by 299 bps due to lower-than-expected staff cost.

Stove Kraft opened 117 stores in FY24 versus a target of seven-eight stores per month. The current total store count (as on March 31, 2024) stands at 171.

Sales channels such as GT (38% contribution), e-commerce (31%), modern trade (12%), exports (11%), institutional/corporate (5%), and retail (3%) showed strong volume growth.

Going forward, the focus will be on growing the retail channel (company owned and company operated stores) as it is a comparatively higher margin segment.

The management’s strategy is to cater to the mass segment and offer them branded products at reasonable price points.

FY25 topline guidance stands at ~19% (past four-five years topline CAGR), and the company aspires to touch a double digit margin – in the range of 10-11% – by FY25.

We maintain Accumulate with a revised target price of Rs 500, valuing it at 17 times March26E earnings per share.

Click on the attachment to read the full report:

DISCLAIMER

This 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.