V-Guard Q1 Results Review - Summer Products Led Healthy Quarter; Improved Outlook Priced In: Systematix

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.V-Guard Industries Ltd.’s strong Q1 FY25 (revenue/Ebitda/profit after tax up 22%/49%/54% YoY) was driven by summer products in the Electronics (revenue up 41%) and electrical consumer durables (revenue up 26%) segments. Superior segment mix drove Ebitda margin to a healthy 10.5%. Electricals revenue (up 7% YoY) was impacted by channel destocking led impact in wires demand (inline with peers) on softening copper price in June. Sunflame result (revenue down 7% YoY, 4.7% Ebit margin) stayed weak; recovery is likely in the upcoming festivals. Non-South markets led growth (up 30% YoY; 50.9% mix versus 48.4% YoY) whereas South markets grew by 17%. V-Guard’s performance in last two quarters has improved; outlook looks promising too. Most of the margin expansion levers are in place. Adequate price action and rise in own manufacturing mix (65%, aims 75% in two-three years) will drive Ebitda margin back to 10.5% level. TPW fans plant at Hyderabad is expected to start in 18 months. After strong Q1, we increase earnings estimates by 3-5%. We now expect 16%/28%/36% CAGR in revenue/Ebitda/PAT over FY24-26E (after a low 13%/14%/9% CAGR over FY19-24). Tight working capital management would aid healthy operating cash flows and 26% return on invested capital in FY26E. While we are positive on V-Guard’s prospect, after ~25% rally in the scrip in the last two-months and now at 42 times FY26E price/earning, we maintain Hold rating, with a higher target price of Rs 439 (40 times FY26E P/E, earlier Rs 420 at 40 times). Growth and margin trajectory in Sunflame is the key monitorable..Click on the attachment to read the full report:.Tech Mahindra Q1 Results: Profit Rises 30%, Meets Estimates.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit. .Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

V-Guard Q1 Results Review - Summer Products Led Healthy Quarter; Improved Outlook Priced In: Systematix

Growth and margin trajectory in Sunflame is the key monitorable, says the brokerage.

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V-Guard Q1 Results Review - Summer Products Led Healthy Quarter; Improved Outlook Priced In: Systematix

Growth and margin trajectory in Sunflame is the key monitorable, says the brokerage.

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