Sep 21, 2011, 10.02 AM | Source: CNBC-TV18
V-Guard Industries has target of Rs 300, says PN Vijay, Portfolio Manager.
PN Vijay (more)
Portfolio Manager, askpnvijay.com | Capital Expertise: Equity - Fundamental ,IPO
Vijay told CNBC-TV18, "V-Guard Industries is a midcap stock from Cochin and Kerala. They went public last couple of years. This company has been traditional strong in UPS and voltage stabilizing equipment and also in PVC cables. It’s done some kind of a niche for itself in the South. The triggers for them are that they are breaking out of the South and they are going into the north and other parts in India in a very big way and that seems to be paying off from the revenue being garnered from North, South and Centers.”
He further added, “The other point is that they are changing the product mix, becoming a bit like Havells if you want to put it that way. Moving into consumer portion of the electrical space like fans, switches etc where the margins are very good. If you can keep your cost low, so overtime apart from keeping their very strong market share in UPS, the company would be branching out.”
“Last quarter was not very good for them because as you know India had a very mild summer. We did not have the usual torrid summer and so their air conditioner sales were very damp and so the UPS sales were also damp even then the growth was good about 25-28%.”
“Going forward I think these two big triggers can give them a top-line growth and bottom-line growth. The concerns is of high copper prices but copper again is falling, which may again be a good thing for them. At around Rs 220 they are trading at 13 times the current earnings, which is quite attractive. I give a target for the share of Rs 300 which has hugely outperformed Sensex last 12 months."
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