Buy V-Guard Industries; target of Rs 440: ICICI Securities

ICICI Securities is bullish on V-Guard Industries has recommended buy rating on the stock with a target price of Rs 420 in its research report dated May 16, 2025.

Broker Research

May 23, 2025 / 13:01 IST

buy

26 Aug, 2025 12:21

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ICICI Securitie`s research report on V-Guard Industries

V-Guard reported a strong set of Q4FY25 result which was partially overshadowed by muted numbers of Sunflame. We believe V-Guard did well led by: (1) Stabiliser business benefitting from strong demand for air conditioners. It may face challenges in Q1FY26 with unseasonal rains and higher trade inventory. (2) Healthy summer led to growth in consumer durables (fans and coolers). (3) Wires business recovered with normalisation of trade inventory. While acquisition of Sunflame has failed to generate EVA since its acquisition, we model it to remain in investment mode in H1FY26. The impact on CSD, CPC channels is likely to stay. As the company does not plan to focus on e-commerce, its addressable market is relatively limited for Sunflame.

Outlook

We believe there is potential for V-Guard EBITDA margin to steadily inch upwards with operating leverage, stability in commodity prices and superior revenue mix. We believe risk-reward is favourable at CMP and maintain BUY with DCF-based revised TP of INR 440 (implied target P/E: 38x on FY27E).

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