Shares of Stove Kraft rallied 5 percent in Monday's trade after the Bengaluru-headquartered company's earnings for the June quarter improved on a sequential as well as on a yearly basis. The stock rallied 9.35 percent in a month, while it tumbled 10.54 percent on a year-to-date basis.

Share Market Live

NSE

Speaking to CNBC-TV18 on Monday, Rajendra Gandhi, Managing Director at Stove Kraft, said the gross margin will be maintained at around 35 percent level. "There has been multiple factors that is helping us on our gross margin, while our endeavour is to be higher in the range of 35 percent."

"There has been a softening on the input costs and some new introductions which are moved to manufacturing. There are phases where we introduce products then assemble them and manufacture them. Many of these products have started contributing meaningfully and so it has even us an uplift on the margin," Gandhi said.

He also said that Stove Kraft will do double-digit revenue growth for the current financial year (FY24).

“Our growth comes from three factors. Primarily, of course the existing product category, new product introduction and the channel expansion. We are expanding our retail; we are seeing very good traction in our retail, and we are confident about our retail model. So, we are seeing good growth there. New product introduction has given us good growth and when business resumes to normalcy, but even the festivities kick in even our existing product growth, we believe will contribute," he noted.

"So overall for the whole year we do not see any challenge on the demand side but between last quarter and first quarter of every year we see that demands are normally soft. So, we believe that we will be able to grow in double digit, at least a double-digit growth for sure,” Gandhi said.

The demand scenario continues to be muted. Gandhi believes that post the beginning of Onam, things should stabilise and then demand should be back to normal but currently it is muted.

"The calendar for the festivals has moved this year. Generally, our business is more skewed towards Q2 and Q3 where more of activity happens around the festivals, and the first and the last quarter are relatively smaller," he said.

The kitchen appliances maker had posted a 8.24 percent year-on-year increase in revenue from operations for Q1 of FY24 at Rs 297.75 crore, as against Rs 275.07 crore in the year-ago period.

Stove Kraft’s net profit for the reporting quarter rose by 1.4 percent YoY to Rs 8.20 crore. On a sequential basis, this is an improvement as compared to a loss of Rs 6 crore reported in Q4FY23.

EBITDA or Earnings-before-interest-taxes-depreciation and ammortisation for the first quarter came in at Rs 23.4 crore, an 8.7 percent increase YoY from Rs 21.60 crore reported in Q1 of FY23. Meanwhile, the EBITDA margins remained flat at 7.9 percent for the quarter under review.