Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Stove Kraft Ltd (NSE: STOVEKRAFT) Q4 2026 Earnings Call dated May. 13, 2026
Corporate Participants:
Rajendra Gandhi — Managing Director
Analysts:
Vidhi Vasa — Analyst
Shreyansh Jain — Analyst
Unidentified Participant
Anand Mundra — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to The Stove Craft Limited Q4 and FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to from MUFG in time.
Thank you and over to you.
Vidhi Vasa — Analyst
Thank you and good afternoon everyone. On behalf of MUFG End Time I welcome you all to Storecraft Limited Q4 and FY26 earnings conference call today. On this call we have Mr. Rajendra Gandhi sir, Managing Director and Mr. Ramakrishnan Pendalya, Chief Financial Officer Mr. Hemant Kumar Kothari, Vice President Investor Relations and Mr. Finance. 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, opinion, expectations as of today.
The statements are not a guarantee of our future performance and involve unforeseen risk and uncertainties. And with this I would like to hand over the call to Gandhi Sir. Over to you sir.
Rajendra Gandhi — Managing Director
Thank you. Good evening. Good evening everyone. On behalf of Stout Rock Ltd. I extend a warm welcome to all participants to the Q4 and FY26 financial results earning call. We also have Merji in Time with us on this call. Who are our advisors on investor relations? Along with me is Mr. Ramakrishna Pendanya, our CFO, Vice President Investor Relations and Subadip Pal VP Finance who is taking charge as CFO from 16th May 2026. We have uploaded our investor deck and earnings press release on the stock exchanges and the company’s website.
I hope everybody had an opportunity to go through them. I would like to begin with that the global geopolitical environment has disrupted supply chain. The situation has also resulted into volatility in foreign currency and commodity resulting into cost pressures across both. However, we are happy to inform our investment in the last five years on backward integrated manufacturing setup is well equipped to observe such supply chain disruption and improve our resilience to adapt to the situation.
Our ability to quick turnaround resulted into addressing the surge in demand of small appliances better than their peers. We are already observing this transition with rising adoption of induction cooktops and increasing traction in small electrical appliances, particularly rice cookers, kettle OTGs and air fryers which are emerging as key growth drivers within the electric propane segment. Iran war resulted in the surge in demand for induction cooktops and other small appliances. During the quarter, both small appliances and induction cooktops have contributed around 36% of our total revenue.
This is mainly due to a higher adoption and penetration of these products by households. This will broaden the market of these categories and increase the market size base as it has moved from option to necessity. This quarter induction cooktops contributed 15.5% of revenue and delivered strong momentum with high value growth of 89.4% year on year and volume growth of 67.3% year on year, we understand that there was an untapped market of orator, the hotel, restaurant and coffee chain segment which was dependent on MPG for cooking.
Horeta segment has limited access to solutions suited to high volume, high wattage and high intensity. So to address this segment we launched the pigeon ignite 3500 watt heavy duty infrared cooktop designed specifically for professional kitchens and commercial use case. The Unix 3500 brought high power output enables faster heating and more efficient cooking cycles, an essential advantage in the high pressure service environment. Built with a heavy duty stainless steel body, the cooktop is engineered to withstand continuous use, aligning with the durability expectations of commercial setups.
Going forward due to demand for energy efficient alternatives is expected to remain resilient as households increasingly prioritize reliable and affordable appliances. This trend is reflected in our small kitchen appliances segment which contributed 40.2% of revenue and delivered Q4 value growth of 12.7% year on year and volume growth of 97.7% year on year. Further, the recent reduction in US tariff on Indian foods from nearly 50% tariff to around 18% is expected to meaningfully improve export competitiveness and open more sustainable growth opportunities for the Indian kitchen appliance industry in global markets.
In line with this, our OEM exports contribution increased to 8.7% in quarter four up from 3.8% in 43. On a YTD basis, OEM exports have delivered a CAGR of 3.9% supported by continued progress on key customer development. Moving forward, Our channel mix Q4FY26 were led by E commerce at 34.3% followed by general trade at 32.3%, modern retail at 11.3%, retail EPOS at 9%, OEM exports at 8.7% and corporate sales at 4.8% for FY26, E commerce contribution 35.9%, general trade 29.7%, modern detail 12.4%, OEM export 10.7%, retail EPOS at 7.5% and corporate sales at 3.8%.
This evolution is encouraging because organized tenants are expanding both access and visibility for Pigeon. Online platforms are helping us reach consumers beyond our traditional geographies where quick commerce is enabling faster deliveries and improving conversion, especially for IT replacement needs and convenience for convenient purchases. Our consistent stock availability, reliable fulfillment and strong customer feedback are strengthening trust and supporting repeat buying from our customers.
I’m also pleased to highlight our progress in exclusive brand outlets. As of 5th March 2026, we have grown to 329 stores across 151 cities and 22 states with 67 net additions in the year including 16 in Q4. We are firmly aligned with our goal of reaching 500 stores exclusively by the year 2027. Alongside this, our flagship brand Pigeon delivered a YTD Cagrade of 11.6% with Q4FY26 CAGR at 16.7%, reinforcing its pan India leadership and strong consumer activity. Now I will discuss Q4 FY26 financial performance.
The consolidated revenue stood at 414.5 crores for the quarter versus 313 crores in the previous quarter last year, hence reducing a growth of 32.4% year on year basis. Gross profit for the quarter stood at 160.2 crores versus 120.8 crores in Q4.25 a growth of 32.6% year on year. Gross margins for the current quarter stood at 38.6% in line percent in line with Q4FY25. EBITDA for Q4FY26 stood at 39.5 crores versus 29.5 crores in Q4FY25 showing a growth of 33.9% year on year. EBITDA margins for the current quarter stood at 9.5% versus 9.4 in Q4FY25 improving by 113 basis points year on year.
PAT for Q4FY26 stood at 6.1 crores versus 1.4 crores in Q4FY25 showing exceptional growth of 317.8% year on year. The PAD margins for the current quarter stood at 1.5%. Now I will discuss the FY26 financial performance. The consolidated revenue stood at 1,607.4 crores for FY26 versus 1,449.8 crores in FY25 and suggesting a growth of 10.9% year on year. Gross profit for FY26 stood at 622.5 crores versus 552.4 crores last year same time, same period producing a growth of 12.7% year on year. Gross profit margin stood at 38.7% an increase of 164 basis points year on year.
Basis EBITDA for FY26 stood at 166.1 crore versus 150.7 crore in FY25 showing a growth of 10.3% year on year. EBITDA margins for FY26 stood at 10.3% profit after tax. FY26 stood at 42 crores versus 38.5 crores in FY25 showing a growth of 9.1% year on year. GRAT margins for the PDF stood at 2.6%. Now I would request the moderator to open the floor for question and answers. Thank you.
Operator
Thank you. Thank you very much. We’ll now begin the question and answer session. Anyone who wishes to ask a question may press star and 1. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking the questions. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question is from the line of Shreyans Jain from Swan Investments. Please go ahead.
Questions and Answers:
Shreyansh Jain
Hello sir, I have three questions. First is on the cash flow. Sir, if I look at a cash flow statement we’ve done a CapEx of about 111 odd crores and I think in the Q3 call we had mentioned that CapEx was 63. So I’m just trying to understand Q4. We have spent about 48 odd crores. Can you help me understand what have we spent this on for Q4 as well as the whole year? Because we are going to understand that a large part of our capex we are done with.
Rajendra Gandhi
So what is reflecting on these numbers is what you have capitalized what has been capitalized in the quarter. We’ll give you a list of all those capitalized items. Of course the capex spend had come to. Has come to a complete. I mean the cycle is completed but there are very few WIP items like our substation for. For electric power and one IKEA planter which is a total of the gate is.
Unidentified Participant
See the in the cash flow what when you see the cash flow for investment is 111 cross but you are we also have taken some LCs and then we have gone with the long term, long term borrowing against this the these capex. So you should net off the capex investment with the suppliers credit. So the net is the actual increase in the cash flow. The net is the actual cash flows for the capex.
Shreyansh Jain
So the net I try to do with last year’s gross block I did accumulated depreciation and business depreciation. So the net addition comes to 35 crores and the amount here is 111. So I’m just trying to understand is this fixed assets liability where are we spending this on? If you can just explain this in a little more detail.
Unidentified Participant
As I said you have to net the increase in the or decrease in this suppliers credit. So in the financing activity in the financing activities you have suppliers credit where it has positive of about 32 crores. You should net net of that.
Shreyansh Jain
Maybe I’ll take this offline. So the second question is obviously we have repaid our debt but if you look at the interest in other finance charges paid that has increased from say 19 crores to 25 crores now why should this happen? So can you hear me? Hello.
Operator
Hello Shan. Sir, we can hear you. Yes we bring the headset a little bit closer.
Shreyansh Jain
Yeah I’m saying sir during the year we have repaid our debt but if I look at the cash flow again interest and other finance charges paid has increased from 19 odd crores to 25 odd crores. Now even if I adjust the suppliers credit. I mean I’m just trying to understand what is happening in this line item because ideally you to go down, right?
Rajendra Gandhi
See interest on borrowings have come down and the interest expense that is for suppliers credit, lease, liability, lease and buyback financing that has gone up.
Unidentified Participant
We had one sale and lease the transaction in the last quarter and on that the interest charges has gone up compared to the previous quarters but the borrowing cost has come down.
Shreyansh Jain
Okay and sir one question on the P and L obviously we’ve done well on the top line bit but I’m just trying to understand shouldn’t we have benefited on the gross margins because ideally I think in one of the calls Mr. Gandhi had mentioned that we have taken price increases but yoy gross margins are flat. And on the same side if I Look at the Opex 50 crores of Opex has gone to 73 odd crores which is an increase of 41%. And I was able to understand that all our exports are fob. So a lot of the increase in freight and all that doesn’t actually impact us.
Right. So what is leading to this 41% increase in OPEC?
Rajendra Gandhi
See our retail sales has gone up from the like previous quarter or for the whole year. Is there some disturbance?
Shreyansh Jain
No, I can hear you clearly.
Rajendra Gandhi
Yeah. So because there is a sales commission that is accounted for other expenses. Which is in line with revenue growth and generally the overall otherwise the growth for the quarter is about 30%. So also the relative cost of freight, provision for guarantee and business promotion, power cost, all these are growing in line with that revenue growth.
Unidentified Participant
The sale has gone up compared to the previous year same quarter by 22%. My cost has gone up by only less than that increase. So which means about with a similar range. But it is in line with the sales increase. As Mr. Gandhi said, price then warranty and then business promotion expenses, these are all increased in line with the sales increase.
Shreyansh Jain
Got it. And sir, last question is can you help us understand the value volume split in small appliances? Volumes have grown by but overall value is just 13 odd percent. So what is happening in this segment? Sir,
Rajendra Gandhi
You are telling there is a. There’s a difference between volume growth and value growth.
Shreyansh Jain
So for the quarter small appliances volumes have grown by almost 100% but overall value growth is just 13%. So what is actually happening in small appliances?
Rajendra Gandhi
So we’ll give you complete data if required. So the different products are at different price points. There are higher contribution coming from lower ASP products in the quarter. And so you are seeing higher volumes of those products. And the net value growth is accordingly because the unit count of the sum of all the small appliances is what we give you in the presentation. But the value is absolute.
Shreyansh Jain
Got it. I’ll fall back in the future. Thank you. And all the best.
Operator
Thank you. The next question is from the line of Riyan. She s from three NITRA asset managers. Please go ahead
Shreyansh Jain
And thanks for taking my question. Sir, I have a couple of questions. First on your inventory side, the inventory levels still remain relatively elevated despite working capital improvement. So is this inventory being built intentionally ahead of anticipated demand growth or are there certain categories where sell through remains slower than expected this quarter?
Rajendra Gandhi
Are you been discussing inventory?
Shreyansh Jain
Yeah,
Rajendra Gandhi
I think we have optimized on the inventory levels. This is the inventory of both our RM and finished goods. We are a manufacturing company. We have both almost at equal level. RM and inventory. We actually have a number of days of inventory has come down.
Unidentified Participant
You may see the absolute value remain the same but the number of the inventory death has come down.
Shreyansh Jain
I’m not fan talking about the absolute inventory.
Unidentified Participant
Absolute inventory. Yes, to some extent. Because the metal prices are increasing. We had stopped this. Yeah. Aluminum and then steel in the last quarter.
Shreyansh Jain
Okay, got it. So the second question is around your retail expansion that your retail expansion accelerated meaningfully in FY26. So at the current maturity level are more at its toes dilutive or equity and crore margins in the first 12 to 18 months.
Rajendra Gandhi
Can you repeat your questions or you’d still not be able to.
Shreyansh Jain
Yeah,
Rajendra Gandhi
Yeah.
Shreyansh Jain
So my second question is around your retail expansion that you have done has accelerated meaningfully in FY26. So at the current maturity level are newly added stores margins in the first 12 to 18 months.
Rajendra Gandhi
Yeah. So if you will see our average sales of the retail per store has gone up substantially from 3.8 lakhs to
Unidentified Participant
4.4.
Rajendra Gandhi
So any incremental growth beyond 2.5 lakhs on an average is directly contributing to bottom line.
Shreyansh Jain
Okay, the last one bookkeeping question. Could you please guide that? What revenue EBITDA margin growth are you targeting for next two to three years?
Rajendra Gandhi
I think we would definitely want to protect that 11%. Even we are currently at that level. There are one off items like particularly in the quarter we had a huge surge in the forex loss, very volatile rupee depreciation of rupee. Otherwise we are in line. And so with higher revenue growth we definitely believe that EBITDA margins will be better than this. But we are very confident with the current trend and the demand for all the categories of our products. We will be able to protect that 11% and definitely improve on this.
On the growth front we are seeing growth in all our channels and all our products. So again we are confident of getting back to the earlier growth rate. While we have gone by it was strong before the quarter, we had challenges with our export. Export is getting normalized. With the normalization and additional revenue of IKEA coming this year and with the growth on small appliances, we are very confident of a upwards of 15% growth this year.
Shreyansh Jain
Okay. Okay sir, thank you. That’s it for myself and good luck for your coming quarter. Thank you.
Operator
Thank you. The next question is from the line of Anand Mudra from Sorville. Please go ahead.
Anand Mundra
Hello. Yeah, good afternoon sir. Congratulations on great results especially on revenue and working capital side. And thanks for the detailed presentation also which captured the reason for one time expenses in the financials. So wanted to understand about EBITDA margin. So we have missed this year guidance by what is your guidance for next year’s EBITDA margin? 11% you said. So in spite of growing revenue by 15% some operating leverage may play out and EBITDA margin may be higher than 11%.
Rajendra Gandhi
Anandji, what we were suggesting is we are very confident of protecting the 11% and improving upon from here. We are also confident on the revenue growth more driven by growth in small appliances, our exports stabilizing and also IKEA business commencing to start doing revenue in ikea. So all these three give us. Give us that confidence that we will grow at upwards of 15% and have any growth beyond that will be also positively contributing to increase in percentage of ebitda.
Anand Mundra
Okay, Understood sir. Another thing. Have we taken any price hike because rupee is depreciated substantially and we may have some higher.
Rajendra Gandhi
We have covered the price height for commodities beginning of this quarter. We have accounted for that and passed down the price increase. And for our exports there has been a little delay but Some starting from 1st of June all our customers have agreed to the increase that we have asked for. And so with that we are confident of this margin.
Anand Mundra
Okay, sir. So my another question with respect to capacity of induction cooktop, what is our capacity sir, in terms of number of units and how much you want to. Are you planning to increase that?
Rajendra Gandhi
We were around 2 million pieces last year and we would be up for the current run rate will be between 4 million and 5 million. But we are adding some more with our additional lines also being set up at our plant in Bali apart from Bangalore. So we should be on the lower side between 4 to 5 million. And if we are able to cater, I mean manufacture more with the demand being very high, it could be higher.
Anand Mundra
So last year we were having capacity of 2 million.
Rajendra Gandhi
Yeah, we produced 2 million.
Anand Mundra
Okay. And this year what is your guidance here or what is your capacity? Current
Rajendra Gandhi
Run rate we will hit between 4 to 5 million.
Anand Mundra
So you want to double the production?
Rajendra Gandhi
We have already doubled the production. But the demand continues to be higher than our capability to produce and overall manage the supply chain. And if you are able to improve on our production capacity, we see a market which is growing very fast and will be. We are confident to be leadership and leadership position in this. We are well equipped compared to our peers on this.
Anand Mundra
Okay, and sir, with respect to Capex because since you are doubling the capacity, there will be some Capex for this financial year too. Other than maintenance. No,
Rajendra Gandhi
This is. We had a capacity. It is more of some small assembly line and allocating more resources towards this product is not, it’s not meaningful. Capex there’s very small assembly line testing lines.
Anand Mundra
Okay. And so what is the guidance for this year? Capex that will be cash outflow from the balance sheet from the cash flow statement. I’m saying.
Rajendra Gandhi
Yeah, that I think is well within our plan. It is around 40% is including our retail. I mean overall Capex for this year will be around the 44.
Anand Mundra
Okay. And sir, when is the IKEA billing to Ikea will start this,
Rajendra Gandhi
This quarter.
Anand Mundra
Okay. Q1 of this year. Okay, thank you sir. Thanks a lot.
Operator
Thank you. The next question is from the line of Vinod Krishna from M Industries. Am
Rajendra Gandhi
I audible, sir?
Anand Mundra
Yeah.
Rajendra Gandhi
So thank you for the opportunity. So my question is now that we have done our Capex is almost at the end and we have added Ikea we are also expanding our footprint across the globe and also having a tailwind in our kitchen appliances because of whatever is happening. And so don’t be like I’m not asking for particular number guidance but don’t you think our growth should be better than what we have done over the last five years in the next two to three years because we are confident of higher
Shreyansh Jain
Growth
Rajendra Gandhi
More than 15%. I’m not saying give me exactly it’s not a commitment but given the factors that you already have Ikea
Shreyansh Jain
Exports and also tailwinds in the domestic can we assume better growth than last one did last 15% that within the last five years. Sir, can I take it so
Rajendra Gandhi
I will tell you the last quarter we grew in the range of 30% and current demand continues to be at the same level. So we are confident of that higher growth now.
Shreyansh Jain
So second question. Can we, can we assume the working capital be at the same can we maintain or did the one off because of the index inventory moving very fast because of Iran or we can maintain current level of working capital around 30 days or it is too optimistic. What should be the working capital?
Rajendra Gandhi
We are confident of keeping it below 30 days.
Shreyansh Jain
Your confidence below 30 days. Sir, the last question so what will be the drivers? So last two questions are in
Rajendra Gandhi
E commerce because our 30 35% sales come equommerce are we seeing more competition in E Commerce because it is easier to distribute instead of having presence across retail outlets? General trade, retail trade, are you seeing more competition and how are we positioning ourselves for because large part of our sales is coming from E Commerce so to really build a brand and what are we doing sir? Because that, because there it is easy to compete, right? You can outsource and put a brand you don’t need to be present across the cities
Shreyansh Jain
And towns and GT and mt you can’t retail, you need not be. So can you see explain more the dynamics of the E commerce business? Sir, if you don’t mind
Rajendra Gandhi
In both the small appliances category and category we are leaders on both the large platforms in this country already.
Shreyansh Jain
So you are not seeing a different
Rajendra Gandhi
It is a combination of too many factors. It is not only about sourcing and selling our capability to make, innovate, give the product, I mean bring the product to the consumer at the right price point make it available in large numbers when it is required having established network across the country the brand connect with the customer. I think all of these matter work and that’s why we are leaders there
Shreyansh Jain
From the read. Okay, thank you sir. So on the lead if you can in the presentation put the market shares in at least where you think it is not moving it is more stable like in pressure cookers
Rajendra Gandhi
And in the case categories where you are sure that the market shares don’t change too much if you can put it in the presentation it will be helpful sir, that is one request and second is what are the drivers of margin growth in the next two to three years? Sir, I’m not asking for next one year but maybe because we have done the capex, most of the thing is behind us so what are the drivers of our margin exposure? Just sales growth or
Shreyansh Jain
Because at peak of our manufacturing capacity what would be our sales sir? And how far we are away from that sales?
Rajendra Gandhi
So you answer it yourself. As we scale up, we harness the capacities that we have built. The cost gets rationalized and unit cost gets improved. With all the backward integration that we have and with higher production efficiency in production, definitely this becomes a margin driver. With higher revenue growth definitely the cost between the cost of the product and the realization also goes up and the overall corporate cost will proportionately come down. All these are budget drivers. As we grow from here, we can definitely see improvement on our EBITDA margin.
Shreyansh Jain
So at peak capacity, what would be our sales? Sir, if you can No, I agree it is different
Rajendra Gandhi
Between 2,500 to 3,000 with the existing facility we are very confident to get there
Shreyansh Jain
And it would come in the next two years. Mostly because if you assume a 15, 20% growth
Rajendra Gandhi
We wish we grow at the current pace that we are growing. The last quarter we have grown at 30%
Shreyansh Jain
So we will go there in two years. Okay, all the best sir. Thank you very much for the opportunity.
Rajendra Gandhi
Thank You.
Operator
Thank you. The next question is from the line of Melee Parakh from Propriety Ventures. Please go ahead.
Rajendra Gandhi
Yeah,
Shreyansh Jain
So wanted to have some more budget information on the export side. Can you just provide this revenue mix of the domestic and the export?
Rajendra Gandhi
So our exports were growing. We did have a disruption because of tariffs. Those tariffs now today are in line with the Southeast Asian countries. And we are a preferred supplier with our existing customers. And additionally with the growth of the IKEA business, our export contribution, which in the earliest years used to be around 12% will grow from there. The setback in the early part of this year is the reason for lower contribution from exports. But we will get back to higher of 12%. And actually our exports in terms of growth will be little higher than the company’s growth rate.
But we are also very confident of strong domestic growth driven by both small appliances and the pressure cooker. Our pressure cooker segment is growing by volume and there is a lot of movement from aluminum to stainless steel. So by value terms is also growing. So between pressure cooker and small appliances and export, we see growth coming from all these three segments.
Shreyansh Jain
Can you just please provide the export Numbers contribution in Q4 FY26 just from the numbers perspective? Yeah.
Rajendra Gandhi
Value is about 8.7% for the Q4, sir. And 11% for the whole year.
Unidentified Participant
Thanks a lot. Have a nice
Operator
Day. Thank you. The next question is from the line of Raghav Maheshwari from Kamayaka Wealth Management. Please go ahead.
Shreyansh Jain
Yeah, hi. Thanks for the question, people. Okay, first of all I just wanted to understand since you mentioned that from Q1 onwards revenue from IKEA will be built. So is it fair to assume that the plant is live and we have capitalized all the costs or are we still yet to capitalize some costs?
Rajendra Gandhi
We have capitalized it now in the first quarter. We have capitalized all but last quarter, all of IKEA’s. The investment in that plant has been capitalized as of 31st March.
Shreyansh Jain
Okay, sir. And what kind of revenue are we looking from this IKEA deal? Yearly?
Rajendra Gandhi
I think this is a progressive growth. We have invested for the future. It will be. We have three line of products already that has been awarded to us. The first line will start, will have a production and revenue recognition in the company from this quarter. And maybe by the third quarter the second line and by the fourth quarter the third line. So maybe before the end of this year we are between 40, 50 crores. But at a full fledged full year of this, at the full capacity utilization of these three lines will be around 200.
Between 200 and 250 crores
Shreyansh Jain
On the system. That helps. My next question is on the line of our retail stores, we are moving from the popo model to, you know, the POCO model and the in. In which model are we more aggressive like at the daily. Are we considering franchisee owned, franchisee operated more
Rajendra Gandhi
So as a strategy, when we started to build our retail, we wanted to have a complete control on the experience of the stores, the way it is working and understand the whole thing. And the future stores are all CofO or CofO including the existing Coco stores in the next two. I believe in the next two years majority of all these stores will be franchisee operators. Either it is KOFO or cofo. You would want entrepreneurs to manage these stores. There is a good pipeline of franchisees who are interested in taking up these existing stores also.
We are working on that. I mean the future of our retail is that it will be managed by entrepreneurs.
Shreyansh Jain
Understood, sir. And for such aggressive expansion of franchises. Sir, can you guide me through your sales store sales growth percentage for not the new stores for the matured storms
Rajendra Gandhi
At the moment, particularly if you want to only compare the last quarter, it has been very strong. It is in the range of 25%. Even the same store growth.
Shreyansh Jain
This you are talking about the mature stores, right?
Rajendra Gandhi
Yes.
Shreyansh Jain
Okay, so a mature store has remained like two years old.
Rajendra Gandhi
No, that may not be the benchmark. I said the last quarter has been very strong. Same store to store growth is in between the 25 to 30%.
Shreyansh Jain
25 to 30%. I just wanted a bifurcation between newer stores will get you more revenue in the first month.
Rajendra Gandhi
For us, we believe any store which is crossing that two years of operation, majority of those stores are breaching the 5 lakhs.
Shreyansh Jain
Understood, sir. Understood. And sir, last question from my side, sir. In this FOCO and Foco model of franchisee in which we are targeting, who books the inventory? Will the inventory be on your books or the franchisee owners book?
Rajendra Gandhi
Yeah. All the inventory belongs to the company. And this is funded by deposits that we will take from the franchisees. If these are franchisee operated stores
Shreyansh Jain
And what kind of royalty do you have with them? What kind of royalty arrangement do you have with them?
Rajendra Gandhi
The franchisee 2 lakhs is a fixed fee that he pays and otherwise based on the arrangement between a coin. Four, four. He gets between 15 to 30% margin.
Shreyansh Jain
Understood? Understood. That’s all from my side, sir. Thank you so much.
Operator
Thank you. A reminder to all the participants, please restrict Yourself to two questions. The next question comes from the line of Madhur Rati from Counter Counter Cyclical Investments. Please go ahead.
Shreyansh Jain
Thank you for the opportunity. So I wanted to understand how much gross margin improvement can be expected with economies of scale going forward. Maybe over the next two to three years
Rajendra Gandhi
We are, we are targeting to improve it by 1% every year. And we believe that within the 23 years we should hit a 42%.
Shreyansh Jain
Right. So on a 2500 to 3000 crore revenue base also we are expecting a 40 to 43% in the gross margin. Is that understanding correct?
Rajendra Gandhi
Yeah. So as we grow from here, definitely we are also working on our margin improvement. So we believe we’ll be able to improve by 1% year only.
Unidentified Participant
Right? Anar, I wanted to understand you mind.
Operator
Sorry for interrupting. Mr. Rati. Please be louder. We can’t hear you. Mr. Rati, you’re not audible. The line has got disconnected. I will take the next participant. The next question is from the line of Reshen Mehta from Green Edge Wealth. Please go ahead.
Unidentified Participant
Thank you. Few questions on the balance sheet. If you look at the working capital, it has improved substantially in FY26. So what really has helped reduce our inventory and debtor days? I think they’ve reduced by days each and also simultaneously creditor days have increased. So if you could just, you know, explain the reduction in overall working capital. Yeah. So for receivables we are working with channel financing partners to realize the money earlier than the due dates. And then for payables we are working with payable finance partners where we, while we pay the vendors on time so we get an extended credit from these partners.
And then for inventory we have a close watch on the utilization. And then we keep the inventory for the require, I mean whatever is required for production. And then we have, we have good controls on the inventory so that we are trying to reduce it, reduce the inventory and then the number of days. So typically for you know, raw materials like steel and aluminum, you know, what is the inventory that we typically keep for them? And considering the inflationary trend we are seeing there, what kind of cleanup, you know, have we done?
So for raw materials we keep around 60 days of. For 60 days of sales. So especially aluminium and then steel, around 45 to 60 days. And currently in the current scenario are we increasing that from let’s say 60 days? Yeah, for the last quarter because they’re expecting the increase in the metal prices. We have had taken high volumes and then keep the. Kept the materials. So it is an advantage for us so that we got at the lesser price than the market price. So with this, where do we see our working capital at, you know, sustainable level?
What is, what would be those levels? Yeah. With all that, we were able to reduce it. So in fact, while the increase, the inventory is at the same levels in absolute value compared to the previous year, still we have to reduce the number of days. Right. And you think that is sustainable, right, like around at seven? Yeah, it is sustainable. Yeah. Right, you’re right. And you know, the right of use assets, this number has reduced substantially from 160 crores in FY25 to 62 crores in FY26. So what led to this reduction?
See, in last quarter we have reduced the useful life of the retail stores. We initially we used to capitalize for nine years. So based on. Because we started these retailers about two, two and a half years ago. So we have, I mean we have the trend established and then we have reduced this useful life from nine years to three years. That’s why the assets and liability has come down both, I mean, equal, equally. Okay, okay. And you know, if you could just talk about the demand and you know where we are seeing that buoyancy.
Of course, point taken, sir, in your opening remarks in terms of induction cooktops and OTGs and things like that, but any specific areas and are we also seeing, you know, the buoyancy because of the GSE rate cuts that had happened some time ago? So just your thoughts on, you know, how the demand has shaped up and how it is expected to move, you know, going forward. And any specific reasons or subsegments apart from induction cooktops and electrical appliances that you would like to highlight?
Rajendra Gandhi
Primarily these are the three categories of products for us. Cooktop appliances and cookware. Cookware substantially is contributed by pressure cookware and the cookware is coming from our exports. In all these three segments, we see continuous. We continue to see very positive growth. Of course, the smaller plans are growing faster segment is growing both in terms of volume and also because of the premiumization that is going from aluminum to stainless steel. The value growth is also substantial.
In the last quarter you will see that we have very high growth in value terms, 44% coming from. And because we had reasonably good export, we had a 49% growth in the 1 in our non stic cooperation. The small appliances category apart from induction is also growing. But induction at the moment is growing disproportionately. But this is also getting to adaptation. Now most of the households are wanting to use indexing cooktops they would have started using it based on those emergency needs. But now people want to use.
We are seeing this kind of trend and we believe this will continue for a long time. India being a very large country, not too much of capacity in the country we are at, we are positioned in such a better position to peers. So all this will lead to higher growth than industry for us. But the industry is also continuing to grow.
Unidentified Participant
So on the induction cooktop side, if I’m not wrong, a bulk of the raw materials is imported from China. So because of the supply chain disruptions that we are seeing and overall industry demand surge for this category, are we facing any challenges in terms of sourcing the underlying raw materials for induction cooktop?
Rajendra Gandhi
Again, as I mentioned, we are better positioned in this the manufacturer. It’s a highly backward integrated facility for manufacturing index and cooktops. Is not that all of these components we import all those facilities that are available domestically, we use them. Either we manufacture them ourselves or also source them. Example. To give you one small example, we make our own PCBs but we get the PCB board from the domestic manufacturers is only the components that we import. A typical assembler would want to import the whole population.
The cost difference between these two, the capacity that will be available from the suppliers in China may not be adequate enough to address the surge in demand. Of course there is one particular input that is the crystalline glass. Today at the moment in this country we do not have any capacity. So about 33 to between 33 and 40% of the import is imported. Based on the type of model that you make. Yes, that remains. And. But we have a very strong capability of sourcing procuring these items from China.
We have a very strong team on the roles of the company working in China also.
Unidentified Participant
Sure. Thank you.
Operator
Thank you. The next question is from the line of Anudhav Goel from Cosmo Ventures. Please go ahead.
Shreyansh Jain
Yeah. Hi sir. Congratulations on a great set of numbers, especially the cash flows front. Sir, we are a mass value brand and 60 to 70% of the cost of an induction cook cooktop for industry is still imported. I think there are three components. Pcb, glass and induction coils. So for I think I heard your comments for PCB and glass. So what about this induction coil?
Rajendra Gandhi
There’s enough of wire available in the country and then there’s a plastic part. Of course we import the magnets.
Shreyansh Jain
Okay, okay, okay. So sir, wouldn’t gross margins take a hit for the next 1 2/4? Like we have steel prices increasing, aluminium price is increasing. The forex movement is not favorable. So at least temporarily for a few quarters, we should see a hit on margin, right?
Rajendra Gandhi
No, we will definitely pass on any commodity price increase. Generally we have an arrangement with our suppliers for a quarter and the average of the previous quarter is what we have an arrangement for all our. But we definitely see a challenge on addressing the Forex disruption. That could be a challenge. But otherwise on any input cost increase due to commodity, we’ll pass on.
Shreyansh Jain
Okay, so can you quantify the price size we might have taken so far
Rajendra Gandhi
For the current quarter? We are in the range of 10%.
Shreyansh Jain
10%. Okay.
Rajendra Gandhi
Yeah.
Shreyansh Jain
Okay. Okay. Okay. And so coming to exports, I think before tariffs came in picture, we were very, very positive on growth in and beyond Ikea. So you feel that potential business we were eyeing will take some time to come back once lines have dropped tariffs,
Rajendra Gandhi
It started coming back.
Shreyansh Jain
They said we should pencil in some gradual growth for this year.
Rajendra Gandhi
Yeah. So definitely there’ll be good growth and it will be gradual.
Shreyansh Jain
And so my last question is we see many new brands and entrants coming in the market. You know, maybe they are at about 50 current sales or 100 current sales. Do we have any thoughts to acquire a mass premium or a premium brand and try leveraging our manufacturing and distribution set up to play?
Rajendra Gandhi
You don’t want to evaluate any such opportunity. But there is enough room for us to grow with the facility and capability that we have built both in the channels and the manufacturing capacities. But we will not say up if there is any good opportunity that can add value to our business.
Shreyansh Jain
Okay, best of nothing. Thank you so much.
Operator
Thank you. The next question is from the line of Anand Mudra from so well, please go ahead.
Anand Mundra
Just wanted to understand those other expenses in quarter four, our other expenses have gone up to 62 crore. This is very high. So wanted to understand is there any one off item in this?
Rajendra Gandhi
There is no one off item per se. But I will tell you substantially there’s a of the large number, about 10 crores is increase in sales commission. The sales commission is a commission that we pay to our franchisee stores.
Anand Mundra
Okay.
Rajendra Gandhi
Because there is a huge surge in the revenue number itself for retail. That’s where you see the dryer. Otherwise it is in line or a line with our revenue growth. Example I will give you if it was 5.5 crores of rate and forwarding last year. This year it is 6.15 crores. Similarly for provision for warranty, if it was 1.25 crores, it is 1.75 crores. This year business promotion would have moved from 48 crores to 54 crores. So it is in line with this power and fuel. Say from 15 crores is gone to 20 crores.
It is in line with revenue growth.
Anand Mundra
So sir, effectively our revenue from our own stores have increased in quarter four as compared to the full year. Hence the commission has gone up. Correct?
Rajendra Gandhi
Yes. Yes.
Anand Mundra
So our gross margin is impacted much more. Because gross margin from the direct store is much higher. So
Rajendra Gandhi
Revenue from retail stores is in the range of 9%.
Anand Mundra
And Q4 it was higher
Rajendra Gandhi
In the same range.
Anand Mundra
Okay, understood. So one more thing. In I checked few conference call of last year we we have guided for 50 crore of capex including the Ikea Capex. But as per cash flow statement we ended up spending 111 crores. So this year our guidance is 50 crore. Do you think the we may end up spending more? Do you think 50 is more or less? We are there
Unidentified Participant
In the cash flow. The capex investment is coming. 109 is actual indirect cash flow. So whatever is capitalized in the PPE schedule is reflecting there. But it is funded by the banks by way of suppliers credit. So my actual cash out is the net of being the decrease in suppliers credit.
Anand Mundra
And what is the actual outflow? Sir, actual net outflow would
Unidentified Participant
Be around 70. 70 to 75 crores.
Anand Mundra
Okay, Just a clarification. Till the time it is funded by suppliers. Right. It will. It will not come in cash flow statement as capex. It will come and it will. Okay, understood. It
Unidentified Participant
Will not be a real cash flow only when we pay the liability to the bank. It reflects in the cash flow
Anand Mundra
Was 70 crore last year.
Unidentified Participant
Yeah. Net cash out for Capex will be about 70 75.
Anand Mundra
Okay. And sir since other expenses have gone up substantially. Coming back to the same question other expenses have gone up substantially in Q4. What shall we budget for financial year 27 as a whole other expenses as a percentage of sales.
Unidentified Participant
As a percentage of sales it remains the same down being the revenue is growing up. But the other expenses will not go in the same increase while the revenue grows. So if revenue obviously it will be less than the current year’s percentage.
Anand Mundra
Okay, understood. Thanks. Thanks a lot.
Operator
Thank you. The next question is from the line of Vinod Krishna from Amanda’s wealth. Please go ahead.
Rajendra Gandhi
You mentioned that in my previous question that you are leader in E commerce. So any
Anand Mundra
Market
Rajendra Gandhi
Shares can you give on pressure cookers induction?
Shreyansh Jain
Wherever you can clearly say that we are leaders in whichever items. If you can name the item market share
Rajendra Gandhi
So if you mention these two products, definitely by volume, we are far ahead of competition both on indexing cooktops and pressure cookers.
Shreyansh Jain
You do not. And overall also you do not want to share the exact numbers of 30 or. No,
Rajendra Gandhi
No. There are different category of products different see in different product segment. Particularly since you mentioned induction cooktop and pressure cookers we are far, I mean definitely far ahead in volume by any competition on both these platforms.
Shreyansh Jain
Any target of retail expansion over the next three years this year will be 500 for the next three, four years we are looking
Rajendra Gandhi
At that run rate of 25 stores every quarter more or less
Shreyansh Jain
That will continue.
Rajendra Gandhi
Yeah.
Shreyansh Jain
Thank you sir. All the best.
Operator
Thank you. The next question is from the line of Madhurati from counter cyclical investments. Please go ahead
Shreyansh Jain
Sir. Thank you for the opportunity. How would we have margin excluding the induction segment? So I’m trying to understand what would be the margin for induction? Would it be near company average or higher or lower?
Rajendra Gandhi
So for us other than the export business which is white label at the gross margin level we are agnostic on channel or product or category.
Shreyansh Jain
Okay. And sir, I wanted to understand we have invested over 500 crores in capex over the past five years but that hasn’t reflected in our revenue. If I consider FY22 to 26 hardly 400 crore revenue increase where we struggled and so going forward, how should I look at our capital allocation policy?
Rajendra Gandhi
So there is no struggle. The capex is for a long term and we have moved from 800 to a revenue to 1600. But the capex is designed for 3000 so the growth is from 800 to 3000.
Shreyansh Jain
Right. What kind of payback period do we expect before embarking on? Generally
Rajendra Gandhi
We believe that whatever we invest we should get back in maximum three years.
Shreyansh Jain
Right. And so we haven’t. Even if I consider our PBT there, the PBT that is terminated in the past five years doesn’t like. If I consider the payback versus the PBT incremental PVT that we have delivered in the past few years it doesn’t match up for the three year pay ratio. So this is not for
Rajendra Gandhi
The five years period that these investments have happened progressively in the last four years. And this is also for the future. It is not for the period that has gone by the investment. Whenever we do an investment, if it does not give us returns in three years we will not pursue the investment.
Shreyansh Jain
Right answer. With this IKEA business scaling up, what can be the quantum of this business? Maybe in the next one or two years
Rajendra Gandhi
The Current line of items that have been awarded to us and at its full capacity will be between 200 to 250 crores.
Unidentified Participant
Okay, so that was from mine. Thank you so much and all the best.
Operator
Thank you. The next question is from the line of Lakshmi Narayan from Tunga Investments. Please go ahead.
Anand Mundra
Thank you. I was looking for the channel. Has it been given already? Because I joined the call a little late. I’ll pick it up.
Rajendra Gandhi
Sorry.
Anand Mundra
Yeah, I. I like channel mix of the sales in terms of modern trade. Your own channel, E Commerce for the
Rajendra Gandhi
Quarter or for the year. Okay. We are at 29.7% for GT 35.9% on e. Com 12.4% for Modern Trade. 3.8% is corporate sales. Our EBO sales is at 7.5% and our exports is at 10.7%.
Anand Mundra
And I see that we sell products on various combo offers. Right. So what percentage of our sales come from combo offers is something which you track. Is that a better way to say we
Rajendra Gandhi
Do annual combo sales during the December period and the overall sales is about between 5 to 6% of our annual sales.
Anand Mundra
Got it. And your working capital has actually gone through a tremendous improvement. What led to this improvement and how sustainable is this?
Rajendra Gandhi
So we have worked on both our receivables and payables and the inventory with the receivables now are all fully majority of all that are covered by channel financing. So we have some charge discount policy for our customers that funds their cost of paying us. So most of the time it is much ahead of the normal payment period. Majority of all our payments we receive within 15 days. And on payable side we are on invoicemark platform. This is a platform which facilitates payment to MSMEs. Wherein while the maximum credit period to MSMEs is 45 days, we pay them in 90 days.
But they get the payment upfront immediately. And because they get this money immediately, they fund the cost of this penalty for us. While we pay them in 90 days, the payment is received by our suppliers
Anand Mundra
Almost
Rajendra Gandhi
Immediately and on the inventory. While we maintain the same level of inventory as our revenue is going up, the inventory to the number of days is coming down. All these three are contributing to our better cash flow by number of days. We believe these are sustainable model. We have worked for this and in that range between the 24 to 30 we are definitely confident of being there. This also is accounting for some inventory that we sometimes as a strategy build. Like in the last quarter we had to build inventory on aluminum because there was forward looking costs.
Similarly for Stainless steel. There were supply side challenges. So we want. So these are also accounting for all this. We believe that this is a sustainable model.
Anand Mundra
Thank you. And in terms of your total in house manufacturing versus outsourced, how this has actually panned out over the year when compared to the last year?
Rajendra Gandhi
No, we almost have moved to 7 and 98. We are between 97 and 98% of all in house manufacturing.
Anand Mundra
Got it. And in terms of, you know, good sales in Q4, when you started the Q4, did you anticipate such a good increase or how much was actually driven by the induction? I mean, if you remove the induction part, how much of that you actually anticipated and you actually could actually manage such a good sale?
Rajendra Gandhi
Okay, let me put it like this. The industrial sale started on the 10th of March. So yeah, of the 90 days, 70 days has elapsed. We are seeing growth in, across the categories. Of course, there was a sudden spurt in all the sales of Induction and that has seen success. But we were growing on the induction category as a category. Even before this high spurt in demand. We were growing.
Anand Mundra
And do you see this? Anything that led to this spurt in demand other than your own sales engine and the marketing engine? Anything, any other factor that actually contributed to the. We
Rajendra Gandhi
Believe post the GFC reduction to 5% we are continuously seeing across the categories good demand in our products, even those products which are not following the category. I mean the bracket of 5%. But post the GST reduction announcement that was in the middle of third quarter being continuous growth.
Anand Mundra
Sorry, you know, because, you know, I’m just wondering if a person would go and buy a cookware or a, or a utensil or something because of GST cut. Is that, I mean, just trying to understand how, how gst. Okay,
Rajendra Gandhi
Let me try to explain to you. This becomes a very strong play for any organized player. At 5%, there’s almost no impact of GST on the product between 18 and a 5. There is a huge difference. There is a lot of challenge for any unorganized player. Then in our opinion, lot of that sale is also coming to players like stoutcraft who are very aggressive. See, we are also addressing a very price conscious, very cost conscious customer. By design, the brand is designed to address them. So it definitely impacts.
It does not mean that it will have no impact at all.
Anand Mundra
Got it. And do you think this is actually, this is faced by other manufacturers also all your peers, this kind of a spurt in demand
Rajendra Gandhi
On the induction? Yes, across board. Those who are serious players in the Induction cooktop category, those who are stranded with inventory that they could not be quitted. All that saw very consumption. And so there is a pipeline that is completely empty. Even if demand stabilizes, normalizes, there is a pipeline that has to be completely filled in. So for a near term UN if there is assuming there is no adaptation of these products, still there is demand. But in our opinion, the consumers are now wanting to have this appliance as a regular daily use cooktop.
And with that we see that there is an opportunity of a very large group.
Anand Mundra
Thank you for answering my questions.
Operator
Thank you. In the interest of time, that was the last question for the day. I now hand the conference over to Mr. Rajendra Gandhi, Managing Director from Storecraft Limited, for closing comments.
Rajendra Gandhi
Thank you. We hope we could answer your queries. But in case you have any further clarifications on any queries, you may write to us or reach out to our investor relationship advisors. And thank you for this evening.
Operator
On behalf of Storecraft Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.