V-Guard Industries Ltd. share price target

The company has maintained strong return ratios with RoE and RoCE at ~18% and ~24%, respectively (three year's average) Q1FY22 Results: The company reported a better-than-expected Q1FY22...

a single product company in 1990s, VGIL has expanded its product portfolio to more than 100 products across electronics, electrical and consumer durables segments. VGIL has created a primary growth drivers for the company. VGIL manufactures around 50% of the products inhouse and rest is outsourced from trusted third party vendors. VGIL now focused on moving towards in-house manufacturing and creating a strong footprint in the non- south markets. VGIL...

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...