There is a lot more clarity on Stove Kraft today, compared to 6 months earlier. The results this year have been great. I want to bring attention to 3 points, which have been and will be big tailwinds for Stove Kraft.
Value Migration – Both Up & Down
Pigeon is the cheapest and the best value proposition for a customer migrating from the unorganised market. Lots of these customers are first time users of gas stoves, electric stoves, chimneys and non-stick. The choice is not just of affordability, but also one of fear ! People are terrified of overpaying !
Pigeon has, over the last decade made sure it stands for value and price. Much like Bata. No low income/middle income customer ever feels stupid or conned for buying Bata. Given the fact that Bata quality is so amazing, he is likely to continue to buy at Bata even when he can afford better. It is only when he makes a quantum jump in his earning power, might he get compelled to move. This is a massively powerful advantage & Stove Kraft has it.
Now coming to the even more surprising, downward value migration. We have all bought expensive things that came with exclusive features. For e.g in cars there was a time that only luxury cars had airbags, reverse parking camera, remote keys, automatic wipers etc etc. While lots of expensive cars were sold for the prestige value, the features too were not available in cheaper alternatives. The feature gap between the two has narrowed down considerably.
I take this example rather personally.(Grrrrrrr) I used to own a Landrover Discovery and when I saw the Harrier I felt stupid, really really stupid. It was the same car, with most of the same features at less than 40% of the cost. Yes, a few features were missing, but given that I live in Hyderabad I can easily be happy without a BUM WARMER in my car.
My point is when products give you the same utility, unless you have an ego that needs crutches to survive, you will go buy the cheaper product. All these cook tops and electric chimneys used to have a massive air of sophistication about them. Now with them becoming more and more popular, you realise that all that so called sophistication was just Gas. ( what a pun, what a pun ! 😉 )
I used to be very particular about buying a good branded electric kettle. I frankly don’t care as much as I used to anymore.
Innovation & why Boys love their Toys
Have you ever noticed that the ratio of men to women outside a car accessories shop is like 100000000000:2 ? This isn’t a reflection of a woman’s ability to drive, but just a difference in the way the brains are wired. Men love gadgets – Period ! Unless you’ve been living under a rock, you would have noticed a massive increase of male presence in the kitchen. When men do things, they need tools to do things. Over the last year I have added at least 30 new things in my kitchen – be it kitchen roll holders, portable smoothie maker, chopper, egg boiler, chopping trays etc. With amazon and the low price point of mini kitchen tools, I just couldn’t stop. It’s a dopamine shot – a legal one at that.
Women have a unique tool called – ADJUSTMENT. That tools shows up in men only when the price is beyond their budget.
But seriously, Indian kitchens, despite from producing the highest range of food items in the world, are massively under-tooled and this is going to change. Given the fact that the skill level of cooking is coming down drastically, as women begin to work as well, there is a massive gap between the cooking skills of different generations of women. Also, when diets change to include more heat and serve, more bread over rice, more pre-mixed over cooked from scratch, presentation becomes a big thing.
It isn’t just about cooking anymore. It is about COOKING – REHEATING – SERVING !
The evolution of the desi kitchen be like – Kerosene Stove + Iron Tawa >> Gas Stove + Non Stick >> Electric Stove + Microwavable Multipurpose Cook-wear. Most Indian kitchens are in phase 1 or 2. The scope is HUUUUUUUUUUUGE !
iska RATE kya hai -> iska RATING kya hai?
A very basic question – Who rates ? A contrarian, usually doesn’t rate. Someone who takes comfort in the fact that other people also have the same opinion, usually rates. Ratings are about validation – yes, validation, in even simple products like a humble vegetable chopper. Rating is kind of an infinite loop. The crowd goes by ratings and the ratings increase the crowd, which then again increases ratings. This will go on, unless AMMA-JAN tries to hi-jack the system by its many methods. If you are inquisitive – look it up.
The First Mover Advantage + a Good Value product is a lethal combination. Forget Butterfly even Amazon has had to cut its prices, either to get rid of stock or entice people. While Amazon cuts its prices from 38-70%, Pigeon happily sells its goods at MRP with the BESTSELLER sticker.

In the true sense of Bollywood, ratings can take you from ZERO TO HERO & bring you back from HERO TO ZERO. In the investing language, ratings are Price Multiples which keep driving people to buy quality.
the Basic Instinct of Mr Gandhi 😉
Raju Bhai Gandhi calls himself a businessman, but look at the fine print and you will realise that he has moved from being a business man to an industrialist. He would love to produce most of his stuff, at the cheapest cost at the best quality in the world. At the same time, his trading genes will never let him dive straight into manufacturing. He will first trade a product, establish and test the market, and when he sees a profitable & sustainable demand, he starts producing it. This strategy is largely fool proof. This is strategy that even CERA has followed and it has paid off really well.
There are different ways to play the market, be it TTK, Hawkins, Butterfly Gandhimati. The following video will tell you why I would choose a bird over a butterfly.
Stove Kraft trades at under 2000 cr today. I think it will cross a billion $ valuation, i.e 3.5-4x before the end of the decade.
My earlier post on Stove Kraft – https://biginvestorblog.com/2021/03/25/this-krafty-pigeon-is-flying-high-on-gas/
Amazing analysis my friend. You nailed it.