Here's why Stove Kraft shares tanked over 16% today

Shares of Stove Kraft Limited (SKL) tanked 15.59 per cent to hit an intraday low of Rs 715 on BSE after the company reported a weak set of numbers for the quarter ended December 2021. The stock was highly volatile today with an intraday volatility of 7.4 per cent.
 
The company reported a 67 per cent decline in consolidated profit at Rs 11 crore for the quarter ended December 2021 as against a net profit of Rs 33.5 crore in the year-ago quarter. The company's revenue from operations rose 1  per cent to Rs 279.9 crore during the quarter.
 
The stock ended 14.30 per cent lower at Rs 725.90 against the previous close of Rs 847.05. Market cap of the company fell to Rs 2,377.89 crore. The shares stand lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
 
Commenting on the Results, Mr. Rajendra Gandhi, Managing Director said, "This quarter saw a tepid growth in revenue vis-à-vis last year. This was primarily driven by a higher base in FY20 since Diwali was in middle of November last year and consequently had a positive impact in third quarter of FY20. For this year, majority of the Diwali purchases occurred before 3rd quarter and as a result, volumes were relatively muted when compared to last year."
 
"During the current quarter, the company witnessed cost pressures from raw material price increase. However, the company did not pass on this increase to end-consumers as the company was expecting this increase to reverse, which did not happen. As a result, both gross margin and EBITDA margin saw a decline when compared to last year," he said.
 
"However, the company has increased its price in Q4 and going forward, the impact of raw material price increase will be limited on our margins. In addition, the company continues to focus on backward integration of the facilities, thereby increasing efficiencies and reducing costs," Gandhi said.
 
He further added, "We continue to invest and expand our product offerings both organically and inorganically. The company is entering into branded modular kitchen segment and electric switches and accessories segment through the acquisition of Metsmith and business of SKAVA Electric respectively."
 
SKL is a kitchen solution and an emerging home solutions brand. It is one of the leading brands for home and kitchen appliances in India, and one of the dominant players for pressure cookers and amongst the market leaders in the sale of free-standing hobs, cooktops and non-stick cookware.
 
The company is also engaged in the manufacturing and retail of home and kitchen solutions under the Pigeon and Gilma brands and proposes to commence manufacturing of home and kitchen solutions under the BLACK + DECKER brand.