Stove Kraft – Margin To Sustain Going Forward; Re-Rating Warranted: Nirmal Bang

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Since our initiation on July 13, 2021, Stove Kraft Ltd.’s stock has run-up by 33%.

We had argued that Stove Kraft will continue to grow faster than competitors due to its ‘value-for-money’ brand image, distribution expansion and export penetration.

A volume leader in gas stove category and among the top-three players in pressure cooker/non-stick cookware, it is the brand of choice when a consumer shifts from the unorganised brand to an organised brand.

It also has industry-best working capital, strong return on capital employed (30%) and decent Ebitda margin (despite lower gross margin than competitors).

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