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The ongoing war in West Asia has brought to light the dependence on imported fuels.

India imports most of its crude oil and a majority of its natural gas requirement. This has caused anxiety among consumers about disruptions in cooking fuel.

The fear has also led to a sharp rise in demand for induction cooktops and put the spotlight on the companies that make induction stoves in India. Let’s have a look at three of them

TTK Prestige is a well-known kitchenware name with leadership in a range of product categories – cookers, cookware, gas stoves, etc.

It has a market leadership position in the organised pressure cooker segment. The company has been in existence for over six decades.

TTK Prestige has a decent financial track record and has paid consistent dividends. Its sales have grown at a CAGR of 6%, while profits have reduced in the past couple of years.

The company has maintained average ROE and ROCE of 13% and 18%, respectively, over the past 5 years.

Currently, the company is focused on innovation of its product range to remain relevant to consumers. With continuous additions to the product range and promising potential in export markets, the management expects the business to keep expanding.

The management’s strategy is to expand capacity whenever capacity utilisation approaches 70%.

Bajaj Electrical is a consumer electrical equipment manufacturing company based in Mumbai. It’s a part of the Bajaj group.

The company has a good brand recognition among Indian consumers. Its products are also well regarded in the market in terms of quality.

The company has struggled on the growth front over the years due to intense competition but has improved its return ratios recently.

Despite no improvement in revenue and profits over the last 3 years, the company remains debt free with steady cash flows.

The company pays 25% of its profits as dividends.

This company is a prominent name in the consumer electrical industry in southern India. With nearly 50 years of history and a strong market position, it has expanded across the country.

The company’s product range is vast – voltage stabilizers, digital UPS, inverter batteries, electric water heaters, solar water heaters, domestic pumps, industrial motors, domestics gears, distribution boards, wiring cables, industrial cables, induction cooktops, mixer grinders, fans, rice cooker, gas stoves and solar power systems.

It operates a strong network of distributors, direct dealers, retailers and service centres across India.

While it was not a big player in induction stoves initially, the company has made a name for itself over the years. Its products have been well received in the market.

Over the last five years, the company’s sales and profits have grown at 17.4% and 10.8% CAGR, respectively. In this period, it averaged returns on equity of 15.2% and on capital employed of 20.6%. The company has been debt-free for many years.

Investors should evaluate these companies’ fundamentals, commodity cycle risks, corporate governance, and valuations carefully before making any investment decisions.

Happy investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com.

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