Induction cooktops: Hot trade, but cold earnings for makers

Shares of induction cooktop makers jumped after the blockade of the Strait of Hormuz disrupted liquefied petroleum gas (LPG) supplies, pushing households towards electric alternatives.

- Srushti Vaidya

Induction cooktops have become one of the most sought-after products amid tightening LPG supplies.

(ISTOCKPHOTO)

But the surge may do little to move the needle for the companies behind these appliances.

Since 28 February when the US and Israel struck Iran, shares of TTK Prestige and Butterfly Gandhimathi Appliances rose about 15% through 12 March, while Stovekraft climbed 9% through Il March, compared with a 6% fall in the benchmark Nifty 50.

Notably, for these companies, induction cooktops account for a small share of revenue, limiting the earnings impact even if demand spikes.

“Even if the induction cooktop segment grows by about 50% in the next financial year for the three companies, the overall company revenue would increase by only around 5-6%. So it is not very material,” said Aakash Fadia, consumer durables lead analyst at Yes Securities.