After a mixed bag in FY19, this year looks to be solid for V-Guard given acceleration in growth and recovery in margins. We believe various disruptions (Demon, GST, Kerala Floods) over the last 2 years delayed the benefits from its non-south investment. Co had taken a hard decision last year to invest significantly on branding to grow its consumer business. We believe over the next 3 years, V-Guard will be able to expand its EBITDAM by 200bps. We expect co's up-front investments on newer products to start accruing benefits. Newer categories contributed 7% of FY19 revenues, we expect it to reach to 11-12% in FY22. V-Guards 1Q performance was robust owing to benefits of a harsh summer and favorable base. Stabilizer biz (cash cow) fired led by >20% growth in RAC market. V-Guard is expected to regain lost ground in FY20 led by (1) Healthy growth of stabilizers, (2) Robust festive season performance (Kerala foods impacted last year), (3) Favorable base in the rest of FY20 (adj. EBITDA declined by 9%). We moderate our growth assumptions and hence cut EPS by 2% over FY20-21E. We value at 35x on Jun-21 EPS, arriving at a TP of Rs 261. Maintain BUY.