Stove Kraft FY26: Demand-led surge, better cash flows, and an IKEA ramp ahead

Stove Kraft closed FY26 with a sharp Q4 rebound and a notably stronger cash flow profile. Consolidated revenue for Q4 FY26 rose to INR 414.5 crores, up 32.4% year-on-year, while EBITDA increased to INR 39.5 crores, up 33.9%. Profit after tax for the quarter was INR 6.1 crores, though the company highlighted a forex loss of INR 5.67 crores in Q4.

For the full year, consolidated revenue grew 10.9% to INR 1,607.4 crores. EBITDA rose 10.3% to INR 166.1 crores, and PAT increased 9.1% to INR 42.0 crores. Margins were largely stable year-on-year, with FY26 gross margin at 38.7% and EBITDA margin at 10.3%. The bigger change came below the operating line, where forex volatility and certain export-linked costs weighed on reported profitability.

What powered Q4: electric cooking demand and a skew to small appliances

Management linked Q4 demand to a faster shift from LPG to electric cooking, citing supply uncertainty for LPG cylinders and broader geopolitical disruptions. The company said induction cooktops and small appliances together contributed around 56% of Q4 revenue.

Induction cooktops were the standout. In Q4 FY26, induction delivered 89.4% value growth and 67.3% volume growth year-on-year. In the revenue mix disclosed in the investor deck, induction accounted for 15% of Q4 revenue. Small appliances, the largest segment, formed 40% of Q4 revenue. The small appliances segment also drew an investor question on why volume growth was far higher than value growth. Management attributed the gap to a higher contribution from lower ASP products during the quarter.

The product mix disclosure also shows that pressure cookers remained a large contributor at 22% of Q4 revenue, while nonstick cookware contributed 16% and gas cooktops 6%.

Cash flows and balance sheet: working capital unlock and sharp deleveraging

The most visible improvement in FY26 was cash generation. Net cash from operating activities increased to INR 256.5 crores from INR 129.9 crores in FY25, supported by a large working capital inflow.

On the call, management explained the working capital improvement through three levers. First, receivables were supported by channel financing arrangements, which helped accelerate collections. Second, payables were supported through payable finance and invoice platforms, enabling extended effective credit while suppliers received payment quickly. Third, the company emphasized tighter inventory controls, although it also acknowledged building up certain raw materials in Q4 due to expected increases in aluminum and steel prices.

Balance sheet leverage reduced materially. The investor deck highlighted that net debt excluding leases fell to INR 273.8 million by Q4 FY26, down from INR 1,929.18 million in Q4 FY24. The quarterly debt metrics in the deck also showed a decline in debt equity ratio excluding leases to 0.1 by Q4 FY26.

Capex was another topic of discussion. Management clarified that the investing cash outflow includes capex that was funded through supplier credit and that net cash out for capex would be lower than the headline investing outflow. For FY27, management guided overall capex around INR 40 crores including retail.

Channels and retail: expanding reach, but keeping the model asset-light

Stove Kraft’s channel mix continued to tilt toward organized and online channels. For Q4 FY26, the company disclosed revenue split across general trade at 32.3%, e-commerce at 34.0%, modern retail at 11.3%, own retail at 9.0%, and OEM at 8.7%.

For FY26, management disclosed e-commerce contribution of 35.9%, general trade 29.7%, modern retail 12.4%, OEM exports 10.7%, retail EBOs 7.5%, and corporate sales 3.8%.

The company also continued scaling Pigeon exclusive brand outlets. As of 31-Mar-2026, it had 329 stores across 151 cities and 22 states, with 67 net additions during FY26 and 16 added in Q4. Management reiterated a target of 500 stores by 2027 and described a strategy shift toward franchise-operated formats (COFO and FOFO) over the next two years. Management also stated that inventory remains on the company’s books and is funded via deposits from franchisees in franchise-operated stores.

From a unit economics lens, management said average sales per store had improved and indicated that incremental sales beyond an average threshold per month contributes directly to the bottom line. While this is not a detailed store-level P&L, it signals management’s focus on throughput rather than just store count.

Exports and IKEA: the next growth leg, with quantified ramp guidance

Exports and OEM shipments were impacted earlier due to tariff disruption, as described on the call. Management said tariffs have now normalized and are in line with Southeast Asian competitors, and it expects export contribution to return to around 12%, with exports growing faster than the company.

The key export-linked catalyst is IKEA. Management stated that the IKEA plant investment had been capitalized as of 31-Mar-2026 and that three product lines have been awarded. Revenue recognition is expected to start in the current quarter, with the second and third lines expected to start by Q3 and Q4 respectively.

Management quantified the ramp: it indicated INR 40 to 50 crores of revenue before the end of the year, and a full-year run-rate of INR 200 to 250 crores at full capacity utilization of the awarded lines. This is one of the more specific pieces of guidance in the call and provides a concrete bridge between current scale and the company’s stated longer-term capacity.

The company also linked the macro environment to exports, noting that a reduction in US tariffs on Indian goods from nearly 50% to around 18% could improve export competitiveness.

Takeaways: strong cash generation, a demand-driven mix shift, and execution ahead

FY26 showed a combination of steady annual growth and a demand-led Q4 surge, particularly in induction cooktops. The company delivered a large improvement in operating cash flows and materially reduced net debt excluding leases. At the same time, reported profitability remained exposed to forex volatility, with the investor deck explicitly quantifying unrealized and realized forex losses and other export-linked costs.

The near-term narrative will likely hinge on three execution items that management itself emphasized: sustaining the shift toward electric cooking categories, scaling output to meet induction demand, and ramping IKEA with the staged timeline it disclosed. If those levers play out as planned, the company’s stated aim of protecting around 11% EBITDA margin while improving over time will be tested in a more normalized demand environment.