V-Guard Industries Ltd. share price target

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...

We foresee EPS CAGR of 30% over FY18-21E. We value V-Guard at 35x P/E on Jun-20EPS, with TP of Rs 246 (Rs 240 earlier). We maintain BUY. V-Guards revenues grew by healthy 19% (exp. 16%) despite an erratic summer impacting its summer portfolio. Non-South market (44% mix) continued to blossom with 30% growth, while South grew by 12%. EBITDA/PAT grew by 42/48% (exp. 41/45%).

V-Guard reported ~8% growth (13% comparable growth) in net sales at ~| 659 crore mainly led by ~19% YoY growth in consumer durable segment. However, lower-than-expected growth in stabilisers (owing to muted sales of cooling products) and pump business translated into muted sales growth in the electronics and electrical segments, respectively During Q4FY18, a sharp rise in advertisement and promotional expenses by 3.8x YoY to | 64 crore negated the impact of saving...

We value V-Guard at 35x P/E on Mar-20EPS, with TP of Rs 253. We maintain BUY. V-Guards 4QFY18 like-like revenues grew by healthy 13/15% in 4QFY18/FY18 despite weak summer (exp. 15%). Weak summer also impacted slower gross margin expansion (174bps vs. 272bps exp.) coupled with higher than expected one-time ad expense (Rs 350mn). Adjusted EBITDA/APAT grew by 28/39%.

V-Guard reported 17% growth (23% comparable growth) in net sales at | 523.5 crore, (vs. I-direct estimate: ~| 525.5 crore) mainly led by 20.7% YoY growth in electrical, 17.9% YoY growth in consumer durable segment. We believe GST rate cut in many categories have propelled growth in the quarter. Electronics that mainly consists of stabilisers witnessed growth of 9.7% YoY The company witnessed a 130 bps YoY expansion in EBITDA margin to 9.4% (vs. I-direct estimate: 10.0%) in Q3FY18 mainly...

ICICI Securities Ltd | Retail Equity Research For V-Guard, strong sales growth during Q2FY18 was led by festive demand and re-stocking of inventory by dealers. According to the management, a partial recovery was seen of sales lost due to GST in Q1 while sales are expected to fully recover in the upcoming quarters. Geographically, south regions (contributes 68% to sales) recorded ~13% YoY sales growth while non-south regions continued to grow ~21% YoY during Q2FY18...

We value V-Guard based on a 35x P/E (32x earlier) on Sep-19EPS, and arrive at a TP of Rs 240. We maintain BUY. V-Guard reported strong net revenue growth of 17% at Rs 5.6bn in 2QFY18. Like-to-like revenue growth was at 21%, while our expectation was ~14%. EBITDA and APAT grew by a stellar 30% and 25% respectively.

growth; topline grew due to restocking effect: Revenue rose 17% YoY during the quarter to Rs 560 crores with partial recovery in revenues lost due to GST disruption during the previous quarter. On a like to like basis after adjusting for GST impact, revenue growth stands at 21% YoY. This growth is despite muted cables & wires segment (6% YoY growth) and the switchgears...