Stove Kraft rises after robust Q1 results

Stove Kraft jumped 1.8% to Rs 784.45 after the company's standalone net profit stood sharply higher at Rs 13.53 crore in Q1 FY22 as compared to Rs 1.62 crore in Q1 FY21.

Net sales soared 132.7% to Rs 214.2 crore in Q1 FY22 from Rs 92.07 crore posted in Q1 FY21. EBITDA jumped 110% to Rs 20.2 crore in Q1 FY22 from Rs 9.6 crore in Q1 FY21. Meanwhile, the company's EBITDA margin slipped to 9.4% in Q1 FY22 from 10.4% in Q1 FY21.

Commenting on the results, Rajendra Gandhi, MD said, Q1 FY22 started on a positive note with the company delivering strong performance. Revenues grew by 133%, EBITDA by 110% and PAT by 734% YoY. The business would have grown at an even better pace had we not been hampered by the second wave of COVID - 19 in the month of May. Due to pandemic, the general trade and modern retail (large format stores) are closed in May, thereby adversely impacting sales. Business resumed to reasonable level only from early June 2021. Post the relaxation in lockdown restrictions, the company has been doing well. E-commerce continues to remain our strongest channel and contributes over 30% of our revenues. During the last quarter, the company introduced 20 SKUs across different segments.

He further added, We have increased the sales of our high value premium products which has helped increase our Gross Profit margins. The company plans to launch over 30 SKUs in the coming quarter. During the quarter, we have increased our spending on branding and marketing. We believe that continuing to develop awareness of our brands, through focused and consistent branding and marketing initiatives is important for our ability to increase our sales volumes and our revenues, grow our existing market share and expand into new markets and new product categories. Our focus is on increasing distribution, increasing network in rural areas and bringing more customers onboard through increasing our number of outlets. With a constant focus on technology upgradation and increase the level of automation, the company plans to achieve greater efficiencies and cost reductions resulting in operational efficiencies and higher profit margins on a sustainable basis.

Stove Kraft is engaged in the manufacture, trade and retail of a wide and diverse suite of kitchen solutions under "Pigeon" and "Gilma" brands.

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