V-Guard Industries Ltd. share price target

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....

We maintain BUY. V-Guard reported a mixed bag with in-line revenue growth and miss on EBITDAM. In the backdrop of volatile commodity prices, the co. was unable to pass on input costs given the weakness in Kerala (~25% revenue mix). South market clocked 9% revenue growth (a 7 quarter high) despite weakness in Kerala (impacted by floods). Non-South market (37% revenue mix) continued to outperform with 18% revenue growth. EBITDA/APAT grew by -9/-6% (exp. 6/10%).

(19% of revenue), UPS (12%), C&W; ( 30%), Pumps (12%), Water Strong return ratios & Debt free BS to aid inorganic growth heaters (12%), and Fans (10%). Revenues are growing consistently V-Guard's return ratios are strong with ROE in 18-22% range driven at 15% annually very much in line with mgt. Guidance. In H1FY'19, by a combination of asset-light business model with it outsourcing due to exceptional event of heavy floods in Kerala, revenue growth ~ 60% of its production. At the same time, its gross margins are...

(19% of revenue), UPS (12%), C&W; ( 30%), Pumps (12%), Water Strong return ratios & Debt free BS to aid inorganic growth heaters (12%), and Fans (10%). Revenues are growing consistently V-Guard's return ratios are strong with ROE in 18-22% range driven at 15% annually very much in line with mgt. Guidance. In H1FY'19, by a combination of asset-light business model with it outsourcing due to exceptional event of heavy floods in Kerala, revenue growth ~ 60% of its production. At the same time, its gross margins are...

V-Guard's Q2FY19 performance was largely impacted by Kerala floods and a weak summer for its products like stabilisers and pumps (both together contributed ~30% to FY18 topline). Hence, the large part of growth in Q2FY19 came in from consumer durable segment (up ~12% YoY) driven by newer products categories like switchgear, kitchen appliances. On the geographical front, non-south markets saw healthy topline growth of ~20%. Revenue contribution from non-south increased from...

V-Guard Industries Ltd (VGIL) is one of the leading players in Electrical consumer durables space. Its major product segment includes Stabilizers, cables & wires, UPS, pumps and Electrical appliances. Q2FY19 revenue grew by modest 7% on account of abnormal rains in south region. PAT declined by 17% YoY. EBITDA margins fell by 360bps YoY to 8.3% on account of delay in pass through of commodity prices, lower sales & inventory loss. We expect margins to improve led by prices hikes and demand pick-up....

We maintain BUY. V-Guard reported a weak quarter, primarily impacted by Kerala floods during festive season and spillover effect from an erratic summer. Net revenues grew by 6% (10% growth adj. for Kerala floods) vs. exp of 12%. Non-South market (36% mix) continued to blossom with 16% growth as compared to South growing by 1%.

V-Guard reported ~14% growth in net sales at ~| 635 crore mainly led by ~24% YoY growth in the consumer durable segment. Major growth came in products like fans (up 22% YoY) and water heater segment (up 14% YoY). Electricals segment revenue (topline contribution ~44%) grew ~11% YoY largely led by ~10% YoY growth in cable & wire segment. However, electronics segment revenue (topline contribution ~30% in...