Accumulate V-Guard Industries; target of Rs 363: Geojit

Geojit recommended accumulate rating on V-Guard Industries with a target price of Rs 363 in its research report dated August 24, 2023.

Broker Research

August 24, 2023 / 17:48 IST

Accumulate

Geojit's research report on V-Guard Industries

V-Guard Industries Ltd. (VGIL) is one of the leading players in the electrical consumer durables space. Major product segments include Stabilizers, Cables & Wires, UPS, Pumps and Electrical Appliances. In Q1FY24, revenue and profitability were up by 19% & 20% YoY,respectively, due to stable growth across segments and a 5% revenue contribution from Sun Flame (recent acquisition). EBITDA increased by 27% YoY & margins expanded by 50bps YoY to 8.6% supported by gross margin expansion. Looking ahead, a stable inventory and softer raw material prices are anticipated to support an improvement in margin, while the festive season will drive topline in H2FY24E. We remain positive on the stock on account of its increasing share of own manufacturing, expanding product portfolio, growth momentum in consumer durables, and further scale-up in the nonsouth market.

Outlook

We value VGIL at a P/E of 42x on FY25E, and given the strong earnings outlook and healthy balance sheet, we maintain an Accumulate rating with a target price of Rs.363.

For all recommendations report, click here