Stove Kraft Q2 FY27 Results (NSE: STOVEKRAFT)
Signal: Margin expansion
The read
The trajectory improved sequentially, with revenue up 21.6% QoQ and EBITDA margin rising to 12.5% from 11.1% in Q1FY27, but the quality of the margin expansion is mixed: EBITDA benefited from a ₹949.41 million inventory credit while gross margin compressed 329bps YoY and H1 operating cash flow fell 62.9% to ₹398.47 million.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹584.67 Cr | +23.2% | +21.6% |
| EBIT | ₹48.06 Cr | +44.2% | |
| Net profit | ₹28.98 Cr | +35.7% | |
| EPS | ₹8.75 | +35.4% | |
| EBIT margin | 12.5% |
P&L walk
Revenue rose 23.2% YoY and EBITDA rose 35.5% to ₹730.09 million, with margin expansion supported by employee and depreciation costs growing slower than sales, while gross margin compressed 329bps on sharply higher material intensity.
Key positives
- Consolidated revenue reached ₹5,846.66 million, up 23.2% YoY and 21.6% QoQ, while PAT rose 35.7% YoY to ₹289.78 million.
- EBITDA increased 35.5% YoY to ₹730.09 million versus revenue growth of 23.2%, a 12.2pp growth gap; employee cost grew 17.1% and depreciation 21.3%, below revenue growth, with EBITDA margin expanding 106bps to 12.5%.
- EPS rose 35.4% YoY to ₹8.75 and tracked PAT growth, with the PAT-to-EPS check clean.
Key concerns
- Gross margin compressed 329bps YoY to 39.2% as materials consumed rose 54.8% to ₹4,016.33 million and increased to 68.7% of revenue from 54.7%; revenue grew while the company absorbed input-cost pressure, with the driver not disclosed.
- H1 operating cash flow fell 62.9% YoY to ₹398.47 million as inventory increased to ₹5,568.37 million from ₹3,600.12 million and trade receivables rose to ₹1,654.82 million from ₹1,149.59 million.
- Net debt moved from net cash of ₹195.35 million at March 31, 2026 to net debt of ₹1,048.04 million at September 30, 2026, mainly due to current borrowings of ₹1,043.01 million.
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