I find it counter intuitive that a company deliberately makes inferior quality products to sell it cheaper. This would turn the LTV of a customer to zero. A customer after buying/ using a Pigeon product once would also migrate/shift to other brands if the quality is bad. She would rather spend some more money to get better value.
Company have reported loss in Q4. In investor presentation there is no mention about loss in Q4. They only presented data for last 12 months.
2 Likes
- Capex for the year is INR75 crores, with an additional INR20 crores being an advance for future spending. Capex for the year will not exceed 25% of PAT along with depreciation. Some of the planned capex in FY '24 will be staggered to early FY '25 due to the challenging business outlook.
- LED sales have grown 2.1% YOY.
- Channel mix for FY23: General trade - 42%, Modern retail - 10%, E-commerce - 30%, Corporate sales - 5%, Exports - 10%. E-commerce channels have been impacted by operational issues and consumer behavior, but are expected to return to earlier growth levels.
- Guidance: The company has successfully added 54 stores in southern markets and remains committed to accelerating store reach in FY’24. The company plans to open around 100 stores this year via Franchising, with 7-8 stores per month as the run rate. The company’s retail stores have a gross margin of 45-48%, with costs ranging from INR1.25 lakhs to INR3 lakhs and an average revenue of INR4 lakhs per month. Stores become profitable after the third month of operation. Gross Margins expected to improve 1% in this year. Plans to reach 20% ROE this year and EBITDA margin of 11%. They advise against sacrificing margins and ROE for growth in a tepid demand scenario. Advertising spend is not more than 3.5% and the company will continue to invest in marketing.
- The company is confident in demand for their products, particularly during festival seasons, and believes they can achieve their historic growth rate of 19% in a normal situation.
- The company assures investors that it is on a strong footing and will be able to deliver aspired EBITDA and margin numbers in the coming quarters.
2 Likes
The CFO has quit (again). He was appointed only in Feb 2022. Along with the CEO quitting recently and the company’s inconsistent performance, as an investor, losing patience with this company. Reducing my holding by 75% and hoping for the best.
2 Likes
Company has expanded kitchen product lines with products manufactured at its Bangalore factory.
Some of the items as per press release are stainless steel bottles, rice cookers and air fryers.
Not much info on Skava acquisition which was to complement sales of LED bulbs. Or performance of Gilma brand.
Ebitda margins have improved.
By lower quality, I meant rather than lasting for 5-7 years, it would last for 3-4 years (which in itself is long time frame). In this scenario, each buyer as an individual doesn’t have data (both in terms of time frame as well as volume) to judge whether the StoveKraft product bought by the buyer is relatively good or not compared to other brands unless he/she goes and actually has two different brands being used simultaneously.
An average buyer would see “lower priced product, last for 3-4 years, good enough” at the time of buying. What do you think about this?
P.S. : I used 3-4 years as the lifespan of the stovekraft products as I have two pigeon products in my house and that is how long they last before “cracks” start showing up. This may vary upon different products/usage.
IT raid at company’s premises. Company notified exchanges for the same.
Not able to find any new news after the news came out anybody knows any update?
The raid by income tax officials has concluded. No material information has been disclosed yet.
The stock seems to have reacted positively after Income tax inquiries.
Now the company is expanding sales network in the North.
2 Likes
Unfortunately with every quarter Stovekraft management seems to be learning their business. The last quarter result is not so encouraging and the stock is bit of touching all time low!
Disc: Held the stock for a while and have divested now.
Resignation of CTO.