Stove Kraft Q1 FY27: Record Quarter, Induction Tailwinds, and a Clear Push on Premiumisation

Stove Kraft Limited began FY27 with its strongest ever first-quarter performance. Q1 FY27 consolidated revenue rose to INR 480.6 crore, up 41.3 percent year-on-year and 15.9 percent sequentially. Profitability expanded faster than sales as operating leverage kicked in. EBITDA grew 50.9 percent to INR 53.8 crore, while profit after tax increased 63.5 percent to INR 17.1 crore.

Management highlighted that Q1 is typically a seasonally softer period for kitchen appliances, which makes the performance notable. The quarter played out amid supply chain disruptions, raw material volatility and currency fluctuations, yet gross margins expanded by 127 basis points year-on-year to 39.6 percent.

What drove the growth: Induction cooktops led, but the base categories also held up

Product performance in Q1 FY27 was broad-based, with one clear standout. Induction cooktops delivered 315.9 percent year-on-year growth and contributed 27 percent of quarterly revenues. Management framed this as sustained demand that remains materially above pre-war levels, implying a structural increase in adoption rather than a temporary spike.

Beyond induction, Stove Kraft’s core cookware portfolio also contributed meaningfully. Pressure cookers grew 41.3 percent year-on-year. Non-stick cookware rose 21.8 percent year-on-year and represented 21 percent of the revenue mix.

The company also called out temporary moderation in small appliances and gas cooktops. Management attributed small appliance softness to supply-side allocation of lines and resources toward induction cooktops during the demand spike, and indicated that capacity augmentation has now been put in place.

Q1 FY27 product mix

The investor presentation provided a revenue mix for Q1 FY27 across product categories.

Note: Implied revenues are calculated from Q1 FY27 revenue of INR 480.6 crore and the percentage mix shown in the presentation.

Channels: General trade recovery and retail momentum

Stove Kraft’s omnichannel mix remained diversified. E-commerce contributed 31.8 percent of revenue, followed by general trade at 28.6 percent. Exports contributed 15.3 percent, modern retail 13.0 percent, and the company’s retail channel 8.7 percent.

General trade was a key highlight, growing 56.2 percent year-on-year. Management described this as the strongest general trade growth in three years, indicating better channel productivity and recovery after a weaker period.

Company-operated and franchise-led retail also scaled rapidly. Retail revenue grew 86.3 percent year-on-year. The store network reached 346 stores across 23 states and 160 cities, with 17 stores added during the quarter. The company reported average sales of about INR 4.36 lakh per store per month and stated that store-level profitability begins above INR 2.5 lakh per month.

A strategic shift toward franchise operations is also visible. Management and the CFO noted that a higher franchise mix led to higher commission payouts in Q1. This was framed as part of the retail model evolution rather than a structural deterioration.

Margins and costs: Cost-plus pricing, but with incremental aspirations

Gross profit for Q1 FY27 stood at INR 190.4 crore, up 46.0 percent year-on-year, with gross margin expanding to 39.6 percent. EBITDA margin improved to 11.2 percent.

Management repeatedly described the business as operating on a cost-plus pricing approach, passing through inflationary pressures to protect margins. At the same time, the call included a clear statement that when the company corrects prices, it also tries to account for incremental margin aspirations.

Other expenses rose sharply year-on-year, and the company addressed this in detail. The CFO explained that the increase was driven by four buckets: higher job work costs due to outsourced manufacturing to meet a sudden demand spike, higher marketing and business promotion expenses aligned with a targeted marketing spend as a percentage of sales, higher franchise commissions because franchise-operated sales mix increased, and CSR spending that was executed early in the year.

Management indicated that some of these cost pressures, particularly job work intensity, are expected to normalise as in-house capacity absorbs volumes in subsequent quarters.

Strategy and outlook: Retail scale, exports, IKEA and a China-led supply chain initiative

The management commentary suggested confidence for the remainder of FY27, supported by the spread of the festive season demand across multiple months and improved manufacturing readiness. While the company did not give a precise revenue target, it stated it expects strong performance versus the prior year.

A few forward-looking statements stood out:

First, the company reiterated its objective of reaching 500 standalone Pigeon exclusive outlets by year-end 2027.

Second, exports are expected to strengthen after a disrupted period. Management said export contribution was around 12 percent of revenue last year and expects it to reach 15 percent over the next two years, even as the overall company grows. The company treats large customers such as IKEA and Walmart as deemed exports.

Third, IKEA supplies did not start in the reported quarter but are expected to begin in Q2 FY27. Management described IKEA as a high-quality business and indicated that even at full scale it could contribute about 5 to 6 percent of the company’s revenue.

Fourth, Stove Kraft outlined efforts to strengthen sourcing and backward integration through China-based structures. Management discussed a wholly owned subsidiary aimed at improving buying economics and streamlining imports, and a JV manufacturing arrangement in China to produce triply circles used for pressure cookers and cookware. Commercial production is targeted by end of calendar year 2026, before December.

Finally, premiumisation was consistently framed as a multi-year lever for both growth and margins. Management expressed an aspiration for gross margin to settle in the 40 to 42 percent range on an ongoing basis and suggested a medium-term EBITDA margin trajectory toward 14 to 15 percent over the next two to three years.

Takeaways

Q1 FY27 positions Stove Kraft with strong momentum heading into the seasonally stronger quarters. The quarter combined record revenue with improved margins, supported by induction cooktop demand, general trade recovery and rapid retail scale-up.

At the same time, the company was transparent that part of Q1 execution required higher outsourcing and associated costs. The near-term question is how quickly this normalises as internal capacity catches up. The medium-term narrative rests on premiumisation, retail expansion, and a more controlled supply chain including the planned triply input capability and the start of IKEA supplies from Q2.