Shares of Stove Kraft surged by 7% to reach a 52-week high of ₹932 on September 16, following Emkay Global’s initiation of a 'buy' rating with a target price of ₹1,350. This significant jump underscores the market’s positive reception to the brokerage firm’s recommendation and highlights Stove Kraft’s robust performance in the cooking appliances sector.
Emkay Global’s optimistic outlook on Stove Kraft is driven by the company’s attractive valuations and strong innovation capabilities. Analysts have noted that Stove Kraft, which produces cooking appliances under the brands Skava, Pigeon, and Gilma, offers exceptional 'value for money' in products ranging from mixer grinders and pressure cookers to cooktops, toasters, chimneys, and kitchen utensils.
According to Emkay Global, Stove Kraft’s valuation is compelling, given its strong market share gains, 35% EPS CAGR, and solid free cash flows. The brokerage firm also highlights the company’s effective expansion into new-age distribution channels, including e-commerce and modern retail. This strategic growth has established Stove Kraft as a leader in several high-growth categories and improved its export positioning, making it a significant supplier to Walmart.
Stove Kraft’s impressive performance is further evidenced by its substantial gains compared to its peers. The company has achieved a 15 percentage point increase in revenue share from FY16-24, driven by improvements in categories such as non-stick cookware and small appliances. Additionally, despite being a relatively recent entrant in these segments, Stove Kraft has emerged as a market leader in induction cooktops, air fryers, and electric kettles.
Emkay Global’s analysis suggests that the company is well-positioned to benefit from a recovering mass-consumer demand cycle after two challenging years. With a projected 15% revenue CAGR and a 33% EPS CAGR over FY24-27E, along with a strong free cash flow yield of 5.6%, Stove Kraft’s future outlook is promising.
For investors interested in share market investment, Stove Kraft’s strong stock performance and Emkay Global’s bullish rating highlight the company’s potential as a valuable addition to an investment portfolio. The stock’s impressive 103% surge this year, compared to the benchmark Nifty 50’s 15% rise, demonstrates its significant growth and market outperformance.
With its innovative product offerings, expanding market presence, and positive growth projections, Stove Kraft represents a compelling opportunity for those looking to invest in the share market.
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