V-Guard Industries Ltd. share price target

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...

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...

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%...

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 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.

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.