Q4FY21 Revenue grew by 58% YoY, on account pent-up demand. PAT grew by 110% YoY, led by strong operating performance. EBITDA margin improved by 450bps YoY to 12.9% on account of cost rationalisation and lower advertisement spends. VGIL to trade at premium valuation on account of increasing penetration in Non-south market, new product launches and expanding retail chains, strong growth in its key south market and strong balance sheet position. We might see slight hiccups in earnings due to Covid second wave. However, economic activities to normalise in Q2FY22 leading to...

V-Guard's performance in Q3FY21 was much ahead of our estimates mainly due to smart sales recovery followed by strong festive demand and market share gains from unorganised/regional players. The company also saw channel re-filling of key products ahead of peak season. According to the management, V-Guard will continue to focus on expanding its distribution network in non-south regions (~41% of revenue). Revenue of non-south regions posted phenomenal growth of 43% YoY, better than ~25% YoY revenue growth from south regions. Other than this, the company will also...

Q3FY21 Revenue grew by 32% YoY, on account of festive & pent-up demand. PAT grew by 80% YoY, led by strong operating performance. EBITDA margin improved by 420bps YoY to 13.7% on account of scale benefits and cost rationalisation. Considering normalisation of economic activities, pick-up in construction activities and revival in discretionary spending, we expect revenue growth momentum to continue. We expect VGIL to trade at premium valuation on account of increasing penetration in Non-south market, new product launches and expanding retail chains, stable performance in its key south...

Q2FY21 Revenue was flat YoY, but on QoQ basis was up by 52%, due to pent-up demand as Covid-19 disruptions ease out. But PAT declined by 13% YoY, due to lower operating performance. Gross margins declined by 220bps YoY, but led by cost rationalisation, decline in EBITDA margins was limited to 50bps YoY to 12%. Focus on Non-South market, new product launches and expanding retail chains will drive growth going forward. Going ahead, we can expect improvement in earnings led by festive season and ease in restrictions. We expect VGIL to trade at premium valuation on account of increasing penetration in Non-south market, stable performance in...

Various cost optimisation measures to protect margins The company witnessed QoQ increase in EBITDA margin led by various cost optimisation measures. On a YoY basis, the base quarter includes ~| 10.2 crore of Esop provision. Adjusting with one-off expense in Q2FY20 and Q2FY21, EBITDA margin would see an improvement of 70 bps YoY. The...

V guard saw flat sales at Rs6.2bn, while EBIDTA was down 5% YoY at Rs739mn with EBIDTA margins were down 54bps YoY at 12%. PAT was down 13% at Rs500m. Cash generated from operations was strong at in 1HFY21 at Rs3.2bn vs Rs1.5bn YoY, as working capital has improved...

We retain Buy on V-Guard Industries Limited (V-Guard) with an unchanged PT of Rs. 211, considering its reasonable valuations and improving business operations V-Guard reported flat revenues with stable operating margins in line with estimates. Higher tax rate in Q2FY21 vs Q2FY20 and lower other income led to 12.7% decline in net profit. Management expects to get back on to the growth path with rebound in business environment and expects revenue to remain flat y-o-y in FY21 and cost saving measures initiated would aid margin expansion in H2FY21. The company's strong balance sheet, cash flow and reputed brand along with strong...

The company has moved ahead with various transformational initiatives which it had embarked on over the last few years. Through a reoriented marketing strategy, it is shifting gears in the non-south markets as well as preparing for the Ecom channel. It has plans to expand its presence in the non-South region by enhancing distribution network and brand visibility. Its A&P; thrust will be on non-south markets, where it expects to gain share. Its product launches also get transformed. Typically, product introductions are made in the Kerala market followed by the other...

Market demand at 80-85% of normal in August-September, while factories are currently operating at 70-80%. The company is set to increase inventory to cater to demand surge in the festive season.. Launch of e-commerce exclusive products. Expect scale up in appliance revenue with key role played by the e-commerce segment. Targeting acquisitions with appetite for Rs. 500 crore-600 crore acquisition size to...

We cut our EPS for FY21/FY22 by 14/9% (18% cut in FY21/FY22 in our 4QFY20 Preview) in order to factor in channel liquidity concerns and weak demand. We value V-Guard at 28x on Mar-22E EPS, deriving a TP of Rs 145. Maintain REDUCE. V-Guard posted a weak show in 4QFY20 with revenue/EBITDA decline of 28/42% yoy. The revenue decline was broad based as Electrical/Electronic/CD segments dipped by 32/27/20% yoy. In Jan/Feb, V-Guard saw a healthy growth of 7% yoy, which was close to 6.5% yoy growth clocked in 9MFY20. Lockdown impacted channel filling of seasonal products during the last 2 weeks of March. Channel inventory is at 40 days (20-30 days normally) and liquidation of inventory will be a challenge for the co. V-Guard is also holding high inventory (105 days vs. 75 days), resulting into higher NWC days. South performance remained challenging in FY20 and posted 6% yoy decline. Non-south revenue mix has increased to 41% in FY20 (34% in FY17).

The second half of March happens to be a strong revenue booking period for V-Guard due to significant offtake of summer based products and annual closing of incentive schemes of various products. According to the company, the lockdown situation impacted revenue, EBITDA to the tune of | 250 crore, | 70 crore, respectively, in FY20. Adjusted with Covid-19 impact, FY20 revenue, EBITDA would have been up 6%, 47%, respectively. Further, the company's improved product mix, benign raw material prices helped drive gross margin up ~330 bps YoY in FY20. It has further guided that while...

Once again, V-Guard missed estimates with a wide margin, with its performance being weaker than peers. Gross margin continued to expand, while now base catch-up has happened. The sharp fall in revenues and stable costs led to 42% EBITDA decline yoy. Majority of the revenue recovery has happened in rural and suburban areas, while metros yet to open up fully. The management remained confident on sustained gross margin expansion (+390bps in FY20). FY21 capex would be Rs400mn vs. Rs850mn in FY20. In the wake of extended lockdowns delaying recovery, we have cut FY21/FY22 revenue estimate by 8%/7%; however, the EPS cut has been restricted to 14%/4% on gross and...

V-Guard Industries Limited's (V-Guard) Q4FY2020 revenue declined sharply by 27.5% y-o-y (below estimates), as it was affected by COVID-19 led Lockdown in the last few days of March 2020 (peak season), which impacted sales worth Rs. 250 crore. Loss of sales during March was more adverse as the second half of March tends to be big due to pre-build of summer products at the trade and due to closing of annual schemes and incentives. The company witnessed a decline in revenue across segments, such as electronics (down 26.8% y-o-y), electrical (down 31.8% y-o-y), and consumer durable (down 19.5% y-o-y). Regionally, nonsouth market revenue declined by 21.2%, while south markets were lower by 31.2%...

V-Guard Industries Ltd (VGIL) is one of leading player in Electrical consumer durables space. Its major product segment includes Stabilizers, cables & wires, UPS, pumps and Electrical appliances. We upgrade VGIL to Accumulate from Hold as we believe that near...

After a mixed bag in FY19, this year was expected to be solid for revenue acceleration and recovery in margins. 1HFY20 has seen margin recovery but revenue growth was challenged due to various issues. We expect partial recovery in revenue growth in 2HFY20. We believe various disruptions (Demon, GST, 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 (FY19-22E), 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. V-Guards 2Q performance was mixed with miss in revenue but beat in margins. Cables and Stabilizers were the outliers, while other products were under pressure owing to floods, short term supply issue, competition and weak macros. Adjusted EBITDA grew by robust 35% led by 39 quarter high gross margin at 33.8%. We expect a pickup in revenues in 2HFY20 and margin expansion. However, we cut EPS by 4% to factor muted south performance, slower consumer durables and higher tax rate. We value V-Guard at 35x on Sep-21 EPS, with TP of Rs 242. With limited upside, we downgrade to NEUTRAL.

V-Guard's Q1FY20 performance was largely driven by electronic and consumer durable categories, up 18% and 15% YoY, respectively. Electronic products (stabilisers, UPS) sales growth came on the back of a revival in sales of air conditioners while consumer durable sales growth came in on a low base. During the period, increase in gross margin (up 200 bps) coupled with a change in product mix helped drive EBITDA margins. This resulted in strong PAT growth of ~50% YoY in Q1FY20. The period also witnessed an improvement in working capital cycle by 11 days compared to...

Q1FY20 Revenue grew by 10%, while PAT grew by 52% YoY. EBITDA grew by 42% YoY and margin improved by 280bps YoY to 10.2% led by better product mix, prices hikes and cost rationalisation. Management reiterated their focus on Non-South market, new product launches and expanding retail chains. We expect earnings growth momentum to continue led by new product launches and deeper retail penetration. We upgrade our EBITDA margin estimates by 30bps & 20bps for FY20 & FY21E to factor in potential improvement in margin profile....

V-Guard witnessed strong quarter with an improvement of 200 bps+ and 100bps+ in gross and operating margin respectively due to lower volatility in commodity and forex. Hence, the reported and adjusted net profit (adjusting for Rs. 10 crore incremental ad spend in Q1FY2019) grew by 52% and 18% y-o-y. Non-South regions grew at a strong rate of 14.8% y-o-y leading to overall revenue growth of 10% y-o-y. ECD segment revenue grew by 17% y-o-y while electronics grew by just 0.7% y-o-y affected by lower copper prices. The management will be targeting 12-15% revenue growth (with...

V-Guard Industries Ltdis a major electrical appliances manufacturer inIndia, and the largest in the state ofKerala.

V-Guard is coming out of a difficult phase (floods, volatile cost inflation, up-front investments on newer products) with a strong outlook on FY20. Hot summer in 2019 is driving healthy RAC offtake, this makes us believe that stabilizer will fire (favorable base) which will drive margin expansion. Meanwhile, newer categories (GM accretive) continue to enjoy distribution expansion and drive incremental growth. Newer categories contributed 7% of revenues in FY19, we expect it to grow to 10% in FY21. V-Guards 4Q performance was healthy despite a slight miss in revenue and margins. 4Q performance was optically robust owing to a favorable base (impact from one-time ad spend). FY20 outlook is strong as we expect revenue growth to accelerate and margins to revive. We value at 35x on Mar-21 EPS, arriving at a TP of Rs 250. Maintain BUY