Emkay Global Financial's research report on Stovekraft
SKL is growing significantly ahead of peers (~15pps share-gain) on i) massive cost-leadership, led by deeply-entrenched manufacturing; ii) strong new product innovation capabilities and strategic ‘value for money’ positioning; and iii) improving branding/distribution expansion, including new-age channels (e-com, modern retail). It has emerged as the leader in several high-growth categories, along with rapidly improving exports positioning (largest exporter; supplies to Walmart). Potential mass-consumer demand cycle recovering after 2 tough years and SKL’s sharply enhanced manufacturing edge (gross block up 3x in 4Y, with end of capex cycle amid increasingly restricted imports) drive 15%/35% revenue/EPS CAGR over FY24-27E, with strong FCFF yield (5.6%) and balance sheet (D/E at 0.3x) by FY27E. Valuation at 13x Sep-26E EV/EBITDA (46% discount to TTK Prestige) is attractive.
Outlook
We initiate coverage on Stovekraft (SKL), the leading kitchen and home appliance player (brand Pigeon), with BUY and TP of Rs1,350/sh at 20x Sep-26E EV/EBITDA (56% upside).
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