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STOVEKRAFT: Retail Expansion Plans Are Expected To Drive Long-Term Upside

Revenue Pressures Will Hinder Profits Though Transitions Will Stabilize

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STOVEKRAFT
AnalystLowTarget
Not Invested
Published 29 Jul 2025

Update shared on 12 Dec 2025

Fair value Increased 13%
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AnalystLowTarget's Fair Value
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1Y
-34.1%
7D
0.6%

Analysts have raised their fair value estimate for Stove Kraft from Rs 660 to Rs 745. This reflects expectations of slightly stronger long-term profitability and a modestly higher future valuation multiple, despite a marginally softer revenue growth outlook.

What's in the News

  • Stove Kraft plans to scale its retail footprint to 500 exclusive stores by April 2027, building on the milestone of over 300 standalone Pigeon outlets already launched across India (company announcement).
  • The company is intensifying its expansion in Tier 1, 2, and 3 cities, with a sharper focus on North and West India, particularly Uttar Pradesh, Maharashtra, Madhya Pradesh, and Bihar (company announcement).
  • Stove Kraft is inviting franchise partners under a rent sharing model, offering support across site selection, marketing, staffing, legal and operations to accelerate its store rollout (company announcement).
  • The board has scheduled a meeting on 3 November 2025 to consider standalone unaudited financial results for Q2 FY26 and to grant 6,348 stock options under ESOP Plan 2018 (regulatory filing).
  • At its AGM on 26 September 2025, Stove Kraft declared a dividend of INR 3 per equity share for FY25, equivalent to 30 percent of the face value (AGM resolution).

Valuation Changes

  • The Fair Value Estimate has risen moderately from ₹660 to ₹745 per share, reflecting a higher intrinsic valuation.
  • The Discount Rate has increased slightly from 15.21 percent to 15.58 percent, implying a marginally higher required return from investors.
  • The Revenue Growth assumption has declined modestly from 14.62 percent to 13.52 percent, indicating a slightly softer top line outlook.
  • The Net Profit Margin forecast has improved slightly from 4.02 percent to 4.28 percent, pointing to expectations of better profitability.
  • The Future P/E Multiple has moved up from 36.8x to 39.6x, suggesting a modestly higher valuation multiple applied to future earnings.

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Disclaimer

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