Company Update : Stove Kraft Ltd By JM Financial Services
Disappointing quarter; expectation miss in all aspects
Q4FY25 Performance
* Stove Kraft posted disappointing result with consolidated revenue of INR 3.1bn down 4% YoY and 22% QoQ (23% miss vs JMFe)
Profitability - EBITDA was INR 303mn up 22% YoY (38% miss vs JMFe) largely on the account of EBITDA margin expansion of 200bps, primarily aided by 160bps gross margin expansion, supported by 50bps improvement in other expenses; PAT stood at INR 14mn (miss 92% JMFe) down 45% YoY and down 88% QoQ, impacted by elevated depreciation (+42% YoY) and finance costs (+20% YoY).
FY25 Performance
* Consolidated revenue came in at INR 14.5bn, up 6% YoY, driven by stable performance across core product segments despite macroeconomic volatility.
* Profitability - EBITDA for the year stood at INR 1,507mn, up 27% YoY, largely aided by 120bps expansion in gross margin and supported by 35bps improvement in employee costs and 15 bps reduction in other overheads resulting in EBITDA margin improvement of 170bps YoY to 10.4%,. PAT stood at INR 385mn, up 13% YoY, supported by strong margin expansion even after subdued revenue growth.
* Depreciation and finance costs were both elevated for the year, with depreciation rising by 45% YoY (INR 712mn vs INR 493mn) on account of increased capex (INR 820mn in FY25 and INR 1.15bn in FY24), while finance cost rose 29% YoY to INR 310mn.
* Working capital and inventory - Inventory days rose to 91 days (vs 86 days in FY24), indicating higher stocking levels, whereas payables are coming down to 74 days (vs 86 days in FY24) both negatively affecting working capital days; which has gone to 50 days (39 days in FY24)
* Net debt position - Company’s net debt increased to INR 1.7bn as on Mar’25 (vs INR 1.3bn in Mar’24), driven by higher short-term borrowings to support working capital and capex needs.
Key Aspects to watch out for in the concall:
1) Outlook for FY26, 2) Segmental Performance in Q4FY25, 3) Update on performance of recent partnership with IKEA
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SEBI Registration Number is INM000010361
