Stove Kraft Limited (STOVEKRAFT) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Storecraft Limited Q3 and 9 Month FY26 Earnings Conference Call. As a reminder, all participant lines will be in the lesson-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Vidhi Vasa from MUFG End Time India Private Limited. Thank you and over to you, ma'am.

Thank you, Bhumi, and good afternoon, everyone. On behalf of MUFG In Time, I welcome you all to Stoke Craft Ltd. Q3 and 9-month FY26 Earnings Conference Call. Today on this call, we have Mr. Rajendra Gandhi, Sir, Managing Director, and Mr. Ramakrishnan Pindalya, Chief Financial Officer, and Mr. Hemant Kothari, Vice President, Investor Relations. Before we begin the call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements which are completely based upon our beliefs, opinions, expectations as of today. The statements are not a guarantee of our future performance and involve unconseeable risk and uncertainty. And with this, I would like to hand over the call to Gandhi, sir. Over to you, sir.

Thank you, Vijay. Good evening, everyone. On behalf of Stoutcraft Limited, I extend a warm welcome to all participants to the Q3 and 9-month FY26 Financial Reserves Earning Call. We also have MERG in time with us on this call, who are our advisors on investor relations. Along with me is Mr. Ramakrishna Pindhanya, our CFO, and Mr. Hemant Ketakotari, our investor relationship, vice president in investor relations. We have uploaded our investor desk and earning press release on the stock exchanges and the company's website. I hope everybody has an opportunity to go through them. Global economic growth continues to remain uncertain, with persistent inflationary pressures in several advanced economies, and ambiguity is related to geopolitical situation and tariff in USA, impacting discretionary consumption. In contrast, India remains one of the fastest-growing major economies, supported by acceleration. Urbanization, expanding consumer base, and improvements in the GST policy framework are driving attractive growth opportunities for consumer durable industry, mainly the kitchen and home appliances segment. These structural tailwinds between domestic and international business resulted into 96% business being contributed by our domestic business for the company in quarter three. This gives significant confidence to the team and affinity to the pigeon brand. Combined with improving affordability, increasing premiumization, and rising replacement demand continue to support long-term sector momentum to the consumer durable sector. Although for the current and coming quarters, the export environment remains challenging. Our nine-month FI26 revenue group To INR, 1,192.9 crores, registering a growth of 4.9% in revenue on a YOY basis with an improved gross margin of 38.8%. Through disciplined financial structure alignment, the company achieved a meaningful improvement in operational efficiency with working capital days being reduced to 43. This translated into a significant reduction in working capital debt, which has come down to 80.6 crores at the end of quarter three years. Our flagship brand vision recorded a YTD staggered growth of 9.3%, reinforcing its position as a truly pan-India brand, recognized for quality, affordability, brand affinity, and strong consumer popularity. During the quarter, we recorded robust volume growth of approximately 38% in small appliances category and approximately 9% in pressure cooker category. Further, all sales channels remained active and continue to gain momentum with modern trade and exclusive brand stores delivering particularly strong performance and achieving double-digit YOY growth. Export seems as fades. Advances due to persistent uncertainty surrounding trade negotiations and tariff structures between India and the United States. Amid this, our IKEA business remains on track, with business likely to come to the end of the quarter, coming quarter, and meaningful revenue contribution expected next year. IKEA, with its global presence beyond the U.S., continues to offer strong long-term growth potential. As we profess towards our objective of reaching 500 standalone exclusive pigeon stores by July 27, the company continues to scale its presence through both Cocoa and Kofo retail models for the pigeon prime. During the quarter, we added 17 new stores, expanding our network to 313 outlets across 21 states and 138 cities, strengthening our Pan-India retail footprint. This growing consumer appliance is expected to drive growth across alternate retail categories, resulting in increased demand for higher quality products and enhanced service offerings. Further, our efforts have remained focused on building a strong foundation anchored in consumer satisfaction, motivating us to continuously innovate. We have successfully launched Vision Instamami, a media firm slash... A snack maker, which has got very high acceptance in the southern states of the country. We are also introducing an instant water heater and an uncaught dry iron to strengthen our market presence. Our in-house manufacturing capabilities and deeper backward integration have further enhanced our agility, ensuring consistent quality and improved cost efficiency. As we move forward, we remain confident in our strategy, focused on delivering consistent value, changing our brand, and capitalizing on the opportunities. Now, I will discuss the Q3 FY26 financial performance. The consolidated revenue stood at 378.4 crores for the quarter versus INR 404.1 crores in the previous quarter last year. Hence, registering a degrowth of 6.4% year-on-year basis, mainly due to lower export sales. Gross profit for the quarter stood at 149.2 crores versus 151.7 crores in Q3 FI 25, registering a degrowth of 1.7% year-on-year. Gross margins for the current quarter stood at 39.4% as compared to 37.6%, improving by 188 basis points, reflecting the strength and resilience of the company's business model. EBITDA for Q3-FI26 stood at 35.3 crores versus 40.5 crores in Q3-FI25, showing a degrowth of 12.9% year-on-year. The EBITDA margin for the current quarter stood at 9.3%. Profit of the tax for Q3FI26 stood at 4.1 crores versus 12.1 crores in Q3FI25, which is being a deco. The fact margin for the current quarter stood at 1.1 percent. The quarter declared a one-time expense of 4.65 crores, which consists of 1.24 crores for additional provision for gratitude and leave engagement, 1.9 crores. Due to forex loss and an ECL provision of 1.51 crores. Now I will discuss the 9-month FY25 financial performance. The conservative revenue stood at 1,192.9 crores for 9 months financial year 26 versus 1,136.8 crores in 9 months FY25, hence reducing a growth of 4.9% year-on-year. Gross profit for 9 months, FI26, stood at 462.4 crores versus 431.7 crores last year, same time, same period, registering a growth of 7.1% year-on-year. Gross profit margins stood at 38.8% at an increase of 79 disease points year-on-year. Ibiza for 9 months, FI26, stood at 127.7 crores versus 121.2 crores in 9 months, FI25. Showing a growth of 5.4% year-on-year. EBITDA margin for 9 months, FI-25, stood at 10.7%. Profit of the tax for 9 months, FI-26, stood at 35.9%, versus 37.1% growth in 9 months, FI-25. The path margin stood at 3%, mainly due to one-time extraordinary impact of 4.65 crores. The company undertook a substantial debt reduction of Rs.80 crores during the quarter, which is expected to result in lower interest expense and support margin enhancement in the upcoming periods. Now, I would request the moderator to open the floor for question and answer. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Khush Gosrani from GOG PMS. Please go ahead.

Yeah, hi, sir. How are you? Just congratulations on the recent set of numbers given the market environment. How should one thing grow in the coming quarters given that the domestic demand is on the train?

Thank you. Of course, the domestic business is quite strong and robust, and the demand continues to be better than the previous period. Of course, the last quarter and the first quarter generally are softer quarters for us, but compared to that, we are seeing good January so far.

Got it, sir. And in terms of the commodity cost, despite rising commodity cost, we have reported highest gross margins. So going ahead, how should we think about it? Because they have been very volatile over the last two months.

Yeah, the commodity markets are going through very, I can say, volatile times. While we protect our margins by having a purchase mechanism which can take care of a quarter, all our arrangements with large commodity buyers is linked to the previous quarter. So, we are protected for the quarter, but going forward, we also have no choice but to pass on the price impact to our consumers, and we have already taken enough measures to address this. We are actually passing on the price increase to our consumers.

And so last question, despite the one of the other expenses still on the higher side, so is there any element that of a higher advertisement cost or the any operational cost coming in?

We have the third quarter and we have been very successful in launching a product in South India. Maybe you are in a different part of the country and we have very good acceptance of this product. So, there is a little increase in the advertisement spent in this quarter, in the third quarter.

Got it, sir. And what will be the percentage of exports in the total top line in this quarter or in the nine months?

You are talking about the third quarter?

Yeah, third quarter, yes.

Yeah, it's very small, it's about three and a half percent.

Got it, got it.

Generally, we are at 12% and we wish to grow there, but this quarter we had the most challenging situation, it's not so very bad always, but this quarter was very bad.

Okay, okay, sir. And in terms of ramp-up of IKEA, we should see from Q4A or it has delayed?

The end of this quarter, the revenues will start, but meaningful revenue from next year.

Got it. Got it. I'll get back to you. Thank you.

Thank you. Our next question comes from the line of Vinod Krishna from Evendus Vilt. Please go ahead.

Sir, thanks for the opportunity. Are you able to hear me?

Yeah, yeah. We have to hear.

Sir, our question is on the business models in the sense of what can you explain because we see a lot of competition when we go to e-commerce, but if you see general trade and modern trade, we only have. Three, four brands, and that too, we can't consider Hawkins and the premium brands as competition. So if you can explain in the cookware and the kitchenware segment, how do you see yourself positioned, and whom should we see as your competition and compare your growth to? And in these segments, if you can give us outlook on the growth, domestic side outlook on the growth, and more about competition, because everybody comes and tries on e-commerce, you see too many brands. But on ground, you don't see that many brands. So how do you see that and how are you positioning yourself? And you are one of the two players who have own retail outlets along with Prestige. So how should we look at this business as an industry? So if you can please help us.

Let me explain to you. The TG that we address, we are the leaders in the category that we do. The opportunity is immense and large. We are currently, of course, in the small appliances growing disproportionately to the industry, and even in the pressure cookware segment, we grow disproportionately to the industry. The opportunity on cookware is large. We are still to address that opportunity fully. But to answer your question, of course, there is a huge headroom for us to acquire more market share within the opportunity that is available. And we are fully available through the general trade also. And apart from the general trade network that we have, we are expanding our stores. So for us, it is a stack of e-commerce, modern trade, general trade, and our own retail. We want to be present in all these. All these channels are very important for us. We will give equal attention to all of them and we will want to grow all of them. We want to see ourselves as leaders, continue to get to leadership in business in total while we are the leaders in the PC that we address today.

So, when you say TZ, you can expand and you can talk about who should we see as your competitors and compare with, if you can see.

And your general, general competition. We are only acquiring market share. We are only acquiring market share. So, I don't see. We are the competition, actually. We continue to acquire market share in each of the segments that we are present in the domestic market.

But if you see prestige growth is higher than our growth, so how should we see? I've got the, in domestic, they have grown 12%, so how should we see? Not just this quarter in general, their growth is higher. Hawkins, I'm not comparing, so I'm just trying to understand, when you say leader, can you tell me exactly what is your market share in pressure cookers, at least?

So, we are moving towards being the largest by units on pressure cooper in this country, and since you mentioned the brand, I want to say in the last five years, we were two-thirds of their revenue, which we have closer to 60% of their revenue. Thank you. So the growth is by far, I can say disproportionate. There is no way that any other brand in the country in the category that we are operating in the last five years have grown faster than us. Nowhere near the other.

So, can you at least guide us, sir, 15% worth you were guiding in previous call, so can you stick to the 15% growth on the domestic side at least, till this?

I can say that while our aspiration is there, we will still be on the double digit. Though you don't see the double digit, we are at about 9% on the vision growth for this quarter, but for the annualized, we will still be better than, I mean, if not at the 15%, definitely higher than the double digit baseline.

But given IKEA and if at all, let's say we have a great deal.

Those are export businesses. We actually anticipate in the future our export business to stabilize again and grow much faster than the domestic business. We are talking about these two different businesses separately. The impact about in the current quarter, let me explain to you the impact in the current quarter. We have witnessed a quarter which was minus Diwali. Diwali sales. So, the comparable quarter may not be appropriate, but in spite of that, the domestic revenue was in line with the previous quarter of the same time without the Diwali. Because the overall revenue got impacted on exports, we have a degrowth.

So, Chesmall's request, sir, this is not a question. If you can, in your presentation, if you can do also channel-wise sales division, it would be very helpful because now you have become omnichannel, your large part is coming from e-commerce. It will help us to see channel-wise what is your sales and volume. Like, you give the category-wise, product-wise. If you also give the channel-wise, it will be very helpful for us, sir.

We generally provide you the growth that we do on each of the channels in our presentations. And that's good. But if you want, I'll just give you the nine months and the quarter gone by number.

Channel e-commerce.

I'll give you all the channels. You can write down if you require. Thank you. For nine months. The contribution of GTE for the quarter-gone-buy was 38.5%, e-com was 34%, 12% came from modern trade, we have corporate sales, this is 3.3%, our own retail contributed to 8.5%, and OEM export was 3.7%.

Got it, got it. So, thank you, sir. And so, here in the domestic, we can take double-digit growth for next two, three years, right, on the domestic.

Yeah, we are very confident, sir.

Sir, and margins, or if you can give guidance about EBITDA margin, I'm not talking about, I know you can easily pass on, because given your pricing, you can easily pass on backward integration, you can easily pass on the cost and still be affordable. But in general, EBITDA margin, any guidance?

You will see improvement on both our gross margin, EBITDA margin, and the PATH margins, at least one person year on year. At least one person year on year.

So thank you very much. And debt, sir, this is the last question, sorry. Debt, it will be debt-free by this year end, right? Because that was your guidance.

Yeah, cash debt-free, there is an accounting debt. So, we are already reduced. Our total working capital has come down to 80 crores from its previous 160 crores.

No, leave the lease part, sir, but normal debt, like real bank borrowing, that was the answer.

Normal debt should be close to zero. Close.

Except the supplier credit.

So, there is a supplier, so that is the money that we borrow from the bank will be close to zero?

Yes, sir, sir, not the lease liability. Leave the lease liability.

Yeah, yeah. Then will be close to see us.

Already, sir, or by your ear end? By the ear end. So, thank you very much, sir, and all the best, sir.

Thank you. Thank you. Our next question comes from the line of Rajna K. from SIMPL. Please go ahead.

Hello, am I audible?

Yeah, you're loud and clear, madam.

Okay, thank you. Within the other appliances category, could you provide some color on mixer grinders as a category, excluding nutrient blenders, including trends for us in terms of revenue scale and profitability over the last 2-3 years?

It's very difficult to give you product-wise, but we can definitely share it with you. We'll have to dig out those details. But in the small appliances category, we are growing very fast. For us, in the small appliances category, the mixer grinder is the weakest one, but we are growing very fast in the neutral blender.

Okay, so how do we position our mixer grinders across channels? And has our mixer grinder portfolio seen any pressures relative to competition? Some qualitative color only on the mixer grinder category if you could provide.

So, we believe that mixer grinder is a cluttered category, and we believe that it is a margin drainer. We will continue to be in the mixer grinder until, unless we innovate, we are able to get some cutting edge innovation. I don't see very high numbers coming from mixer grinder. Still, it is a 100 plus crore category for us, but it is a very cluttered, low margin business. For us, we are agnostic to margin, and we will not want to have differential margin between different products. Being a highly competitive appliance, the mixer grinder being in that category, and that could be the reason for our lower, you know, I mean, we don't stand. Generally, in any of the categories that we are, we will be in the top three, but mixer grinder, we are far away from any of those. So I will want to guide you on the mixer grinder alone. I don't think we will put all our efforts to build only the mixer grinder. We would want to build more of appliances and get to leadership in the appliances as a whole rather than only focusing on the mixer grinder.

Okay, understood. One more question. Cooktops as an overall category used to contribute around 25 to 30% in FY22. And now, you know, annually it contributes around 20%. Within this, the mix of induction cooktops has remained stable, while the gas cooktops has declined. Could you help me explain the reasons for this decline in mix? Whether it is driven by competition or whether as per our ambitions of profitability, it was not favorable compared to other appliances and broader categories.

Now, we are growing the cooktop business both in induction and glass top, but we let go one channel completely in the past. We were leaders in that channel. It was a co-branded channel with oil companies, which we completely let go. So, we are building the cooktop business minus that channel. At some time, it was contributing to over 60-70% of our cooktop business. Today, we don't do any business in the co-branded channel, and that's why you will see realignment on the numbers. But when you take the other channels standalone, we continue to grow.

So, after the exiting business with the oil companies, how has the business grown profitably, if you could explain that as well, for cooktop?

Definitely, it is a higher margin business compared to the co-branded oil company business. And for us, as far as margins are concerned, I again want to reiterate that we are agnostic on the margins by product or by channel. More or less, we will be in the same range. For us, even the cooktop or the induction cooktop, of course, induction cooktop, we are carving very large market share. By absolute numbers, we are leaders in this country and growing. On the glass-to-top business, we are also still building the business without the oil company business, so we are able to get back to leadership again. Thank you. Thank you.

So, what would be the effort for building the cooktops business, if you could, again...

We have a very strong backward integrated facility for making cooktops. Particularly, we make none of the brands that in the country that operate will have a facility like that. We also process the glass ourselves, so we have a complete cost and quality control along with the supply chain control. So, with that, we are continuously working on innovation, and as we innovate, we will be able to get more and more market sales. But they are growing.

Okay, and about steel cooktops?

Stainless steel cooktops is slowly fading. At some time in the past, it was only stainless steel cooktops. It's a very small contribution to the overall cooktop business. It's less than 5-6% of our business, 5-6% of our LPG cooktop business.

Okay, understood. Thank you.

Thank you. In order to ensure that management is able to address questions from all the participants, please limit your questions to two per participant. Our next question comes from the line of Pallavi from Samiksha. Please go ahead.

Yes, sir. Thank you for taking the question. This is regarding right now that you mentioned about the exports hitting the cookware segment. So what would be the number of excluding exports to 3Q growth in cookware? And have we also introduced non-stick, apart from non-stick cookware, the other cast iron or other types of cookware stainless steel?

So, stainless steel is one range that we will build, but the rest of the cookware we have a complete stack. We continue to make non-stick cookware. What you mean by non-stick cookware is the PTFE coating. So, the variant in the non-stick cookware, the emerging coating is ceramic coating. They are actually both, when you combine exports and domestic, they are by far the largest in that category now. And we also, of course, have a completely automated line for making cast iron cookware. And we have gradually just started, we have introduced to the market a new range of cookware. We call this Cerak Lad. It is a stainless steel aluminum ceramic coated cookware. So, I think with the addition of stainless steel range of cookware, we will be complete on the cookware. We are, again, in the cookware business, growing very fast.

Mr., what would be the growth excluding the export number in the domestic market for cookware?

I think we'll have to work on that because I currently is at...

My second question, sir, was on KUKA.

I'll have to subtract the, because for us, KUKA, we have a number that includes export business. I will separately make and send it through our investor relationship.

My second question was on KUKA. What is the kind of growth we expect in the future? This quarter, we have been slower than the leader, Hopkins, in terms of growth in the cooker category. Just wanted to understand that.

By unit numbers, we are growing faster than any of competing brands. And for us, YOY absolute value growth on pressure cooker alone is at about 4%.

Right. So, the price hike you mentioned you've taken, have you taken in this category also, in this quarter?

No. Yeah, we are working on that. We are protected for this quarter, but for the coming quarter, at the end of this quarter, we have already announced those price corrections, and it will be effective from, say, March, and we'll start seeing real-time correction from April.

Right. So, I'll come back in the queue. Thank you so much.

Thank you. Our next question comes from the line of Varun Ghea from Equitrix Capital Advisors Private Limited. Please go ahead.

Hi, sir. So, my first question is if you could throw some light on what are the challenges in export because Q2 was very good despite tariffs. So, what has changed now and previously your growth outlook on exports was 40-50%. So, how would you see that going forward? And also, if you could, yeah.

Yeah, you please continue your question.

No, you can, I'll ask the second question later.

Okay, so there are two aspects to the export. We did have some challenges in the first quarter when which we had to complete those orders in the second quarter. So there was a stack up of the inventory at the customer's point. And so from the fourth quarter, it is back to normal on that particular jet. And we have developed three other product categories for exports. We have also had alignment with our customers, but they are unable to initiate those orders until this tariff stabilizes. We are very confident that in the near term, there will be some clarity and stabilization of the tariff, and so these are on pause at the moment while we have developed it, and our export growth potential is also driven by our new customers like IKEA. So, considering all this, we were very optimistic on our growth. We will end that growth for exports in the year, but definitely the quarter gone by was very, very subdued.

Then the tariffs stay, the export outlook is not clear, basically.

Can you please reframe? So I'll tell you, our existing categories continue to grow. The new business is yet to start. The new business is, the IKEA business is yet to start. We are also working on some other countries. But the existing business with our U.S. customers continue. The new development of new product categories with our American customers are in pause.

Okay. And secondly, what was this forex loss of 1.9 crore? Is it due to some hedging because we don't input anything, right? There was a depreciation of INR.

So while we have a hedging policy, there was very disruptive volatility in the forex, and this mainly is actually an unrealized provision that has been made for some capex which have deferred payment. We would have bought these machines on LC payment, and so these are unrealized laws that we have provided.

And what is the ECL provision related to, 1.5 crores?

The rest of it, we generally hedge both our receivables and payables. Our payables are mostly in CNY, and receivables are in dollars. Because the receivable, the export business is long-term. We'll have a plan for a year. We are able to hedge for longer periods. And the payables are for shorter periods. Generally, we pay them in 30, 60 days, and so our payable hedging policy, Whatever we have imported and aware of the payment, we hedge. So both sides we hedge.

And what was the cash flow from operations for nine months, if you could provide that number?

Yeah, just one minute.

Cash flow is not in there. CFO from operations is 242 crores.

242 crores.

242 crores.

Yeah.

Okay. That is... Okay. And lastly, you mentioned that you will still continue to do a double digit revenue growth. So you will have to do almost 400 crores of top line in Q4.

Hopefully, we should be closer to that. Hopefully.

Okay. And actually, you gave a breakup of the revenues for nine months. There was some mismatch in numbers. You mentioned export was just 3.7%, which comes to only... For the quarter?

For the quarter?

For nine months.

No, no. Nine months is much higher. I will give you just a minute. My mistake. 11.4% is for the nine months, and for the quarter was 3.7%. The numbers I gave you is all for the quarter three. If you want the number for nine months, I'll support you.

Okay. I understand. No problem. Thank you. I'll come back in with you. Thank you.

Thank you. Our next question comes from the line of Anubhav Goyal from Cosmo Ventures. Please go ahead.

Hi, sir. Sir, just confirming, yes, I caught it right. You are saying, X-Force for the year, we will see growth on top of the 160 crore sales number we recorded for FY25, and 4-2 will be back to normal. Is that correct?

You are right.

And the 9-month sales number for X-Force comes to around 136 cents, based on 11.4%.

Yeah, so, for the 9 months, we don't have a big degrowth. But there was a huge bid. For the 9 months, we have a small growth, 2.2% growth for the YOY for export.

Got it, sir. So then, any color for FY27, like, do we see export sales remaining around 160, 170 crore sales, or we can head up higher to, say, 190 to 100?

You're talking about FY26 or FY27?

FY27.

FY27 will grow over the current year. We have this complete new business coming from IKEA. And the current business itself, if it normalizes, will be in the range that you mentioned. So, we have the 9 month that about export business is 136 crores, right? So, we will be closer to the number that you mentioned for the year, but for the FI27, definitely, we have a complete new business with IKEA coming.

Got it, sir. So, sir, regardless of the tariffs being lifted, we at least at the bare minimum expect these numbers to sustain.

Yeah, if the tariff continues, the existing business will continue, the new business from U.S. market may not grow, and then there are other markets that we are exploring, and IKEA business is closer to beginning, and that is a very steady-state business, and this is a global business and not linked to any one country.

Perfect, so great. And, sir, given that we have seen a strong domestic sales number for 3Q, and you mentioned 1Q and 4Q are usually great for the domestic business. So, any color you can give for the domestic business for 4Q?

For the Q4?

Yes, sir.

Yes, sir. Q4 business is good. I said January is doing very well.

Okay. And so gross margins really improved this quarter 39%. So with the rise in copper and aluminium prices, do we see the risk of these margins going back to say 36, 37 or we should broadly with the price as coming through sustain at these levels?

So, we would improve our margins by at least 1% year on year. I don't see we slipping from that. There's a constant endeavor to correct our margins. We will pass on any price increase. Of course, there will always be that lag both sides. We generally protect our cost for a quarter, try to protect our cost for a quarter. That's how our new business arrangement with our suppliers is.

Got it, sir.

And, sir, finally, last question. Can you share the nine-month sales number for your car, sky, and bookwear? I think you have shared the 17 crore sales number for 1Q.

Okay, we will share it. I don't have it readily. I will give you the car and sales. Our investor relationship will send it to you.

All right, sir. Thank you. I'll get back in the queue.

Thank you. Our next question comes from the line of Anand Mundra from Soar Wealth. Please go ahead.

Good evening, sir. Sir, just wanted to check how much is export growth you said for 2% for first 9 months?

Yeah, good evening. So, yeah, for 9 months last year, it was 133 crores and we are at 136 crores for 9 months currently.

Okay. And sir, how much is the degrowth in absolute amount in Q3, sir, in exports?

It is 141. 24, 27 crores.

So, it is lower by 27 crores in Q3, as compared to last year Q3.

Yes, sir. Okay.

And, sir, what is our domestic growth for the first 9 months, sir? It's 9% you mentioned.

The vision brand is about 9%. For 9 months, it will be longer. For the quarter, it was. I'll give you the 9 months, sir.

10.3 percent.

Domestic business growth?

Yeah.

Okay. Sir, one small request. If in presentation, we can give the breakup of export and domestic business because export has become big and any variation may give a wrong picture on the overall on the company, sir.

So, you are suggesting to us to give domestic and export business growth and degrowth?

Or absolute amount of break-up of revenue per quarter. Yeah, generally we can avoid all the questions. Sir, if someone can put it on... In our numbers, we don't separately give domestic sales and export sales.

We'll try to add an addendum to this presentation issue.

Sir, if this can be provided for this quarter also by an update to...

Yeah, yeah, this what we have uploaded, we'll send you an addendum. We'll try to do that.

Yeah. So second thing, sir. So what is your guidance on gross margin given? Actually, someone has already asked. So you maintain that you would be able to maintain 39, 40 percent gross, 39.5 percent gross margin given the rise in commodity prices, sir?

So currently, we are targeting to get to 39 percent and we believe that year on year we'll be able to improve this by 1 percent. So, you can take this kind of guidance. It may not be absolutely like that, but a kind of guidance in the next three years, we would want to get to between 41 and 42 percent. Okay.

Sir, what is our capacity of utilization in cast iron? Have we reached to property?

We are doing only domestic business. Our export business has not commenced. There is interest. We are at about 40-45 percent on utilization.

Okay. And, sir, have we capitalized the facilities that we have built for IKEA?

That is a work in progress, and before the end of this quarter, we will capitalize 100% of IKEA's facility. There is some capitalization, something is pending, but before the March end, we will capitalize the complete facility of IKEA.

Okay. And, sir, our debt you mentioned was 80 crore as on 31st December, sir?

Yes.

And you mentioned that we will be debt-free by March. That would be a tough job, because 80% will be different. So, just wanted to reconfirm that.

So, the debt is absolute debt. I said cash debt.

Okay, net debt.

That 80 crores includes supplier's credit that we take. So, when you say, okay, let me explain in simple words that I can explain to you. We will have zero CC or WCBL or any working capital loan. The debt is also including some lease financing, lease accounting and all that. Supplier's credit.

Okay. And one last question.

Correctly, if you want to know, I will tell you the number is below 30 crores for us on the cash debt, which we are very confident of bringing it closer to, we are positive to bring it to zero, but maybe closer to zero by the end of this quarter.

Okay, understood, sir. Thank you, sir. I will come back to Q&A. Thank you, sir.

Thank you. In order to ensure that management is able to address questions from all the participants, please restrict your questions to two per participant. Our next question comes from the line of Shreyan Schen from Swan Investments. Please go ahead.

Hello, sir, can you help me with the absolute export number for this quarter and last year same quarter, sir? One, sir.

40 versus 141, sorry, 14 versus 40. Hello. Hello.

Yes, hello.

Yeah, could you hear me, sir?

You are saying 14 versus 40, is it?

Yeah.

Okay. So, sir, if I just reduce that amount from our Q3 numbers, and we are saying we did about 10% growth in the domestic business, right? So, last year, 400 and more.

10% for a nine-month period.

And what is the absolute domestic growth that we would have done in Q3, sir? Q3 was a problem. Because I think my numbers say we are flagged. 364 versus 364. It is here, it is 9 months.

Q3 ka nahi hain. Thank you.

You have Q3 numbers, I don't think we have growth. Q3.

Thank you.

See, the Q3 again I want to explain to you that this Q3 is minus the Diwali sales and the last year's Q3 was including the Diwali sales. And sales peak around the Diwali period. So while the quarter gone by for us in relative terms was very good for domestic sales, there was no drop in demand. Because generally, immediately after Diwali, the sales go down. I think there is no 2.5%. We are lower by 2.5% for the quarter.

Okay. And sir, this quarter, you also would have some spillover of the GST cuts that happened in Q2, and we would have brought some sales to the channel.

All that is positive. All those have been positive. Generally, there is a delta of at least 30% pre-Diwali and post-Diwali. So, supposing in a month, whichever Diwali is there, your sales bump up by 30%. And we, so technically, if we will, in relative terms, there should be a drop of 30% in sales if the quarter does not have the value. But we have, definitely, it's not that we have grown. We are minus 2% even on domestic business.

Okay. And sir, this last question, you mentioned OCF, we have done about 240 crores.

Yeah, can you please repeat your question, sir?

What is the operating cash flow that we would have done?

I think we gave you, no? 240 for 9 months. Yeah, for 9 months was about 240 crores. Sir, that is not only coming from your gross margins or the contribution margins, but it is also an optimization of, so net working capital does come down to 34, what is that? 42 days, one second, one second, I just did. See, we were at 59 days in FI24. We went up to 64 days in FI25, and we have come down to 43 days for the 9 month of this year.

Okay. And sir, what is the CAPEX that we would have done in the nine months?

We have that number.

What is that? CAPEX that we have done.

You want the cash flow of the CAPEX or you want the CAPEX?

So, obviously, I have the OCF at 242. So, I am just trying to understand what is the CAPEX that we would have done. If CAPEX payments, NET would have paid 63 crores.

We have paid 63 crores.

63 crores. Okay. All right. Thank you. That helps. All the best.

Thank you. Our next question comes from the line of Ashwini Agrawal from Demeter Advisors, LLP. Please go ahead. Your voice is breaking. It's not audible.

There's some problem. Can you hear me, sir? Hello?

Yeah, now I'm able to hear you, sir.

Okay, sorry. Sir, what was the exact issue for exports following so much in the December quarter, and why do you think this will reverse in the March quarter? Because the tariff situation isn't resolved as we speak.

Okay, let me explain to you our export business. Generally, we get projections for the whole year. And almost it is very close to projection. It is as close as between 96 to 100% of projection is what the revenues actually record. Beginning of this year, we have been in discussion with our customers for new categories. And we had very positive outlook on them. It is not that they have given us orders or projections. With that, we were anticipating high growth. But when we started this year, the first quarter, we had moved from non-stick to ceramic, and it was a new line. We departed on deliveries in time for the quarter one, and so there were some small cancellations, and also the deliveries that were to happen in the first quarter were delivered in the second quarter, along with the orders of the first quarter. So, there was an inventory pileup at the customer's place. So, that portion of the business was impacted also along with no new business coming which was anticipated. So, all this put together has resulted in a lower quarter for Q3. Business for Q4 is in line with normal quarter, but it does not include the possible business that we were to do with IKEA and also does not include the projections that we had for the new categories. So, I can only guide you to this, that our current business that was business as normal for the previous year remains intact. The new business is impacted for new categories, and the opportunity that is right ahead of us is the work that we have done over the last one year in setting up the plant, developing the products. We already have the orders in, I mean, orders for the whole year from IKEA, and revenues will start from, actual revenues will start from first quarter, or from April of FI26, April of FI27.

Okay.

And so just on IKEA, you know, our earlier expectation was that fourth quarter, we will start the production. I mean, fourth quarter, we should see for production. So has it been delayed by another three months? And what would be the reason for that?

Delay by three months, yes. So, there are some test protocols that have to be followed, and there has been delays in approval. We are at the flag end of these approvals. There are different approvals, different parameters, and from different labs, and from different parts of the country, and multiple labs. So, all this has contributed to a little delay, and particularly because some of the labs are in China, which are doing the tests, in February, they are completely shut. There is a kind of annual off in February. So, we are expecting these lab reports to come in March, and then we will start coming in some place.

And would you be able to share the budget for IKEA sales for fiscal 2020?

I don't think we'll give you so much granular detail about each customer, but I can give you in broader sense that we will be in line with our exports of definitely end-the-year growth. There is a disappointment for us, and also we would have guided you to a very high growth on exports. That is not happening for the current year, but with IKEA's additional business, there will be ample growth, and if tariffs stabilize, then there is a huge opportunity first.

And last question, sir, on exports and including IKEA, and I'm thinking about, you know, fiscal 27, let's forget this year. Would you say that the margins on exports would be similar to domestic or would they be lower or higher?

Gross margins are far lower and EBITDA, they're at par or better. Thank you so much, sir. All the best.

Thank you. Our next question comes from the line of Nikhat from Dalat Capital. Please go ahead.

Hello, thank you for taking my question, sir. So, in domestic business, you have stated 2.5% decline. So, this is on the revenue decline, right? And so, what was the volume decline in domestic? That is my first question. And my second question is that in small appliances, our volume growth was very strong at around 38.7%, but the value decline was 6%. So why is such a high variation between volume and value for smaller plants?

So, it also is a movement of high-value products from some small-value products. That could be the major reason. On growth for the water, we have...

Volume.

This is again quarter on quarter, right?

This is again product, not channel.

No, you are asking about products or channel?

The category, the small appliance category.

Yeah, small appliances. We have actually grown 38.7% YOY, and on quarter-on-quarter, we have grown by 25%, particularly the small domestic appliances.

Yes, but the value decline is around 6%.

Value on small appliances, yeah, decline is 6%, yes. So, it could be lower than, so, example, if you are selling more air, air triars are more kettles, that could change the value, volume proposition completely.

Okay, or is it that the competitive intensity is also high in the subplanned segment? So, we have not taken any price cuts because of the high competition, right?

No, there is no scope for price cuts, and I don't think we have such challenges on the price front. We are actually a price leader. On price front, we actually are the most aggressive brand. I mean, fast-growing and strong brand. We are definitely a price leader. There is no such challenge on the price side, and particularly in the current atmosphere, many of the components are imported because of the surge in forex cost, whether it is RMB or dollar. Every cost input is going up, and also there is a surge in commodity price, so both is going up. There is no way I think anybody can look at price reduction, and to retain that margin itself, definitely there is a cost increase to be passed on to the consumer. We have very strong acceptability for our products, so I don't think we have a challenge on that. The only, what could have happened is some of those categories also would have moved to in-house manufacturing, and the absolute value would have come down. We would have passed on some of the benefits, and that's why you are seeing your value-wise degrowth, but volume growth. Volume growth, particularly in small domestic appliances, has been the highest, both on YOY and quarter-on-quarter.

Okay, sir, understood. And this domestic was 2.5% down, and what was the volume big length?

That we, I think we'll have to evaluate, because I don't think we have a number like that. Also, it may not give you the true picture on volume, because sometimes it is deceptive. It depends on which is a high value. SKU or low-value SKU contributing to absolute numbers. So, that could be deceptive. We can save the numbers still with you. We'll have to compile and send it to you.

Okay, sir. Thank you.

Thank you. Our next question comes from the line of Madhur Rathi from Counter-Cyclical Investments. Please go ahead.

So thank you for the opportunity. Sir, I wanted to understand with BIS implementation on Hobbs, sir, how do we see the cooktop business dynamics changing? And sir, do we see a possibility of market share gains for stoke grub due to this in-house capacity versus our competitors?

So, the hops have, the BIS thing has been deferred for another six months, but once there is a complete restriction on hops, definitely we have a better capability to any of the trading brands in the country. We definitely have an advantage, but currently it is deferred, so people can still import the hops and sell, and this is up to September 26. Of course, definitely there will be higher opportunity for stock.

Got it. And sir, did we see any, sir, so BIS was also implemented on chimney that we manufacture, so did we see a huge reduction in imports coming in, and sir, what was the incremental capacity or the market size that was available for these Chinese exit?

So, for us also, the chimney, this is impacted. We are always importing these chimneys. We have established the manufacturing facility for chimney. It is evolving and getting stabilized. Of course, once this plant stabilizes and it imports completely getting curtailed, the opportunity for us to grow there is there. Currently, actually, chimney business for us also is impacted. We are not having the full range. We are, we have started manufacturing a few, for us to get to that full-fledged, All the model manufacturing will take about a year.

Got it. And sir, what is the amount or the number of units of chimneys that used to come into India through these Chinese or the capacities that are non-BIS compliant?

That's very large. Actually, there are hardly, very few manufacturers in the country, and even those manufacturing, majority of them bring some SKD parts and assemble, which is not economically, actually feasible. The cost of SKD parts is higher than the CBU unit because of the packaging and the transportation. There are a few manufacturers. It is still evolving. The country does not have large-scale manufacturing in chimneys. There is a huge opportunity for everybody who is getting into manufacturing, and Southcraft, that having the complete end-to-end manufacturing to retail, I think, is time to gain. To answer your question, the overall chimney business should be in the range of 5,000 to 7,000 crores in this country.

Got it. So, just a final question from my end.

Mr. R.T. were unable to hear you.

Sir, sir, sir, sir, hello, hello.

Yes, you are audible.

Yeah, sir, so I wanted to understand regarding this chimney market, and sir, we were expecting to have a thousand crore business from chimneys and hobs. I think we did an interview in FI22 or FI23, sir, so when can we expect to realistically achieve this thousand crore number from these two segments?

You mean, thousand crore revenue from chimneys and hogs for stow crop?

Yes, sir.

It's a long journey. It will definitely be nowhere near that number. Definitely, that is possible. That is the opportunity there, but it is a long journey. I don't think it is happening in the next one, two years. But definitely, that opportunity is there.

Got it. Sir, that was from my chair. Thank you so much and all the best. Thank you.

Thank you. In the interest of time, we'll take that as the last question. I would now like to hand the conference over to management for closing comments.

Thank you everybody for participating in this conference call. We have tried to address all your queries. There are some questions that we will send those details to our investor relationship team. If you have any questions, you can definitely reach out to us. You can also contact MUFG, our investor relationship team. Thank you again for the time today.

Thank you. On behalf of Stovecraft Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.