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).

COVID-19 dents sales growth and operating margin V-Guard Industries (VIL) posted revenue of Rs5.4bn in 4QFY20, down 28% YoY, 21%/26% below our/consensus estimates as lockdown in March led to Rs2.5bn loss of sales. Revenue from South region fell 31% YoY to Rs3.2bn (60% of total sales), while Non-south region fell 21% YoY to Rs2.2bn (40% of total sales). Revenue of Electronics/Electricals/Consumer Durables segments fell 27%/32%/20% YoY to Rs1.5bn/Rs2.4bn/Rs1.4bn. Gross margin jumped 370bps YoY to 33.3% (but flat QoQ), led by premiumisation of product portfolio and pricing actions. EBITDA fell 42% YoY to Rs452mn, leading to an operating margin of 8.4%, down 220bps YoY, below our/consensus estimate...

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...

V-Guard has temporarily suspended its operations across manufacturing locations, offices and warehouses following the government's order of lockdown to curb the spread of COVID-19 virus. The company is not materially impacted by any supply disruptions from China as its imported SKUs form only 7% of total turnover. The summer season looked promising owing to higher temperature in certain states like Tamil Nadu, Kerala and Andhra Pradesh, especially for the summer product categories of AC stabilizers and fans. However, the...

V-Guard Industries (VIL) posted revenue of Rs6.3bn in 3QFY20, up 5% YoY, 5%/3% below our/consensus estimates. Growth was lower as consumer sentiment remained sluggish, leading to softer demand and aggressive price cutting by some players in water heater, fans and switchgears, which VIL did not resort to as it gave precedence to profitability. Revenue of Electricals segment grew 5% YoY to Rs2.7bn, driven by growth in Pumps, while Consumer Durables segment revenue rose 10% YoY to Rs2bn, led by double digit growth in fans and water heaters. Electronics revenue was flat YoY at Rs1.5bn. Revenue from South region grew by 4% YoY to Rs3.9bn (62% of total sales), while Non-south region grew by 8% YoY to Rs2.4bn (38% of total sales). Gross margin jumped...

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 Industries (VIL) has posted 2QFY20 revenue of Rs6.2bn, up 4% YoY, 4%/5% below our/consensus estimates. Growth was lower owing to subdued consumer demand, tight liquidity conditions and impact of floods in four states. Revenue of Electricals segment grew 9% YoY to Rs2.8bn, while Electronics segment revenue grew 4% YoY to Rs1.7bn. Consumer Durables revenue fell 4% YoY to Rs1.8bn due to softer Water Heater sales. Revenue from South region grew marginally by 2% YoY to Rs3.9bn (63% of total sales) impacted by floods and extreme weather conditions, while Non-south region grew by 8% YoY to Rs2.3bn (37% of total sales). Benign commodity cost, price hikes and healthy growth in Stabilizers drove 420bps YoY...

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'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...

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

y-o-y to Rs. 740 crore, marginally below our estimate. The revenue was driven majorly by the electrical segment (14.8% y-o-y, in which sub-category cables grew 24.8% y-o-y) and new product categories (up 61.5% y-o-y in which sub-categories switch gears and kitchen appliances grew by 89.3% and 41.8% y-o-y respectively). Stabilizers reported only...

growth to fall short of initial guidance: V-Guard Industries (V-Guard) is expected to fall short of its revenue guidance for FY2019 due to slower than expected demand recovery in the Southern market dominantly Kerala. Replacement demand pick-up down South is still slow and has not picked up as expected in some of its core segments such as wires...

V-Guard Industries Ltd (VGIL) is one of the leading players in electrical consumer durables space. Major product segment includes Stabilizers, Cables & Wires, UPS, Pumps and Electrical Appliances. Q3FY19 revenue grew by 12% but PAT declined by 6% YoY. EBITDA margin fell by 180bps YoY to 7.6% on account of volatility in commodity prices & INR depreciation. Management's focus on Non-South market, new product launches and expanding retail chains will drive growth....

V-Guard Industries (VIL) posted 12% YoY rise in revenues to Rs5.9bn in 3QFY19, in line with our and consensus estimate. The growth was aided by inverter (up 18%), voltage stabiliser (up 17%), water heater (up 17%) and fan (up 23%). The scale-up in kitchen appliance (up 45%) and switchgear (up 55%) was also robust, albeit on a low base. Revenues from south region grew 9% YoY (highest growth rate in the past seven quarters) while non-south region grew 18% YoY and accounted for 37% of total sales (versus 35% YoY). Gross margin was down 210bps YoY at 30% (FY18 gross margin was 30.1%) owing to volatility in commodity prices and currency rates. Consequently, EBITDA margin fell 170bps YoY to 7.6%, below our/consensus estimate of...