Shares of Stove Kraft Limited closed in the green today at Rs 388 levels gaining approximately 2.5 percent in comparison to the previous closing price of Rs 378.45. In the last one-month period, the stock has provided a return of about 4.5 percent to its stakeholders.
One of the probable reasons for the stock prices to surge today is the bulk deal that took place between the company and Emerging Business Fund yesterday. The latter bought 303,047 shares, equating to a 0.92 percent stake, in the company at an average price of Rs 373. The value of the bulk deal comes to around Rs 11.30 crores.
Stove Kraft Limited is involved in the kitchen appliances industry with business activities including the manufacturing and sale of a diverse suite pertaining to kitchen solutions under the brands of ‘Pigeon’ and ‘Gilma’. The company offers a wide range of products including non-stick cookware, cook-tops, pressure cookers, chimneys, and hobs among others.
Evaluating the numbers reported by the company, the revenues as well as net profits have reduced in recent quarters with revenues moving down from Rs 406 crores in Q2 to Rs 325 crores in Q3. In congruence with the pattern reported above, the net profit numbers reduced from Rs 26 crores to Rs 8 crores in the same period.
The profitability metrics such as the return on equity (ROE) and return on capital employed (ROCE) witnessed a fall in percentages with the first one shifting from 67.25 percent during FY20-21 to 16.95 percent in FY21-22 and the latter moving from 31.43 percent to 17.52 percent during the same timeframe.
The debt-to-equity ratio of the company has also seen an increase raising concerns about cost management.
According to the data available for the March quarter, promoters of the company hold a 55.92 percent stake and the Foreign Institutional Investors (FIIs) consistently reduced their stake and currently hold 3.17 percent stake in the company.
Written by Amit Madnani
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