Stove Kraft Ltd Valuation Shifts Amidst Market Downturn

Valuation Metrics: A Closer Look

As of 2 Feb 2026, Stove Kraft’s P/E ratio stands at 42.17, reflecting a slight moderation from previous levels but still indicating a premium valuation relative to many peers in the Electronics & Appliances sector. The price-to-book value ratio is 3.19, which, while elevated, remains within an attractive range compared to historical averages for the company and its industry. The enterprise value to EBITDA (EV/EBITDA) ratio is 11.28, suggesting a reasonable multiple given the company’s earnings before interest, tax, depreciation, and amortisation.

These valuation metrics have contributed to the company’s overall valuation grade being revised from very attractive to attractive as of 1 Dec 2025, signalling a subtle but important shift in market perception. This change reflects a recalibration of expectations amid evolving fundamentals and market sentiment.

Comparative Analysis: Stove Kraft vs Peers

When benchmarked against key competitors, Stove Kraft’s valuation appears more reasonable. For instance, V-Guard Industries trades at a higher P/E of 49.59 and a significantly elevated EV/EBITDA of 30.27, while Bata India, another sector peer, commands a P/E of 58.35 and EV/EBITDA of 16.36. Relaxo Footwear and Campus Activewear are even more expensive, with P/E ratios exceeding 56 and EV/EBITDA multiples above 25 and 32 respectively.

In contrast, Stove Kraft’s valuation metrics suggest a more moderate premium, especially when considering its return on capital employed (ROCE) of 12.65% and return on equity (ROE) of 7.56%. These profitability ratios, while modest, support the current valuation grade and indicate operational efficiency that is competitive within the sector.

Price Performance and Market Context

Stove Kraft’s stock price has experienced significant volatility over the past year. The current price of ₹476.30 is down 3.48% on the day and has declined 41.34% over the last 12 months, markedly underperforming the Sensex, which has gained 5.16% over the same period. Year-to-date, the stock has fallen 16.78%, compared to a 5.28% decline in the Sensex, highlighting sector-specific headwinds and company-specific challenges.

The 52-week high of ₹871.20 contrasts sharply with the recent lows near ₹454.40, underscoring the stock’s wide trading range and investor uncertainty. Despite this, the valuation grade upgrade to attractive suggests that the market may be beginning to price in a recovery or stabilisation in fundamentals.

Mojo Score and Rating Implications

Stove Kraft’s current Mojo Score is 37.0, with a Mojo Grade of Sell, downgraded from Hold on 1 Dec 2025. This downgrade reflects concerns over the company’s recent price performance and relative weakness in key financial metrics. The Market Cap Grade remains low at 3, indicating limited market capitalisation strength relative to peers.

Despite the downgrade, the valuation grade improvement to attractive suggests that the stock may offer some price appeal for value-oriented investors willing to tolerate near-term volatility. The dividend yield of 0.63% is modest but adds a small income component to the investment case.

Sector and Industry Dynamics

The Electronics & Appliances sector has faced headwinds from inflationary pressures, supply chain disruptions, and shifting consumer demand patterns. These factors have weighed on earnings growth and investor sentiment across the board. Stove Kraft’s valuation metrics, when viewed in this context, indicate a relative discount compared to more richly valued peers such as Sheela Foam, which is rated very attractive but trades at a P/E of 90.68.

Investors should also note the company’s PEG ratio of 0.00, which may indicate either zero or negligible earnings growth expectations embedded in the price, or a lack of reliable growth forecasts. This contrasts with peers like Campus Activewear and Redtape, which have PEG ratios above 2, signalling higher growth expectations but also higher valuation risk.

Long-Term Returns and Investor Considerations

Over longer horizons, Stove Kraft’s returns have lagged the broader market. The three-year return is -5.71%, compared to a 35.67% gain in the Sensex, while five- and ten-year returns are not available. This underperformance highlights the challenges the company faces in regaining investor confidence and delivering sustainable growth.

However, the recent valuation adjustment to attractive may signal a turning point, especially if operational improvements or sector tailwinds materialise. Investors should weigh the current price attractiveness against the company’s fundamentals, competitive positioning, and broader market conditions before making allocation decisions.

Conclusion: Valuation Attractiveness Amidst Challenges

Stove Kraft Ltd’s recent shift in valuation grade from very attractive to attractive reflects a nuanced change in market sentiment. While the company’s P/E and P/BV ratios remain elevated relative to historical norms, they are comparatively reasonable within the sector, especially against richly valued peers. The downgrade in Mojo Grade to Sell underscores caution due to price underperformance and limited market cap strength.

Investors should consider the company’s current valuation as a potential entry point for those with a higher risk tolerance and a long-term horizon, given the stock’s significant recent declines and the possibility of operational recovery. However, the modest profitability metrics and sector headwinds warrant careful monitoring.

Ultimately, Stove Kraft’s improved price attractiveness offers a compelling valuation narrative, but it must be balanced against the broader market context and peer comparisons to make informed investment decisions.

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