Sharekhan is bullish on V-Guard Industries has recommended buy rating on the stock with a target price of Rs 270 in its research report dated February 03, 2020.
Sharekhan's research report on V-Guard Industries
V-Guard reported lower than estimated net profit at Rs. 42.9 crore (up 27% y-o-y) on account of muted topline growth (up 5.4% y-o-y) and lower than expected OPM (due to lower absorption of fixed costs led by muted revenue growth). The focus areas of the company will be increasing its non-South presence, expansion into adjacencies and improving efficiencies which should revive its revenue growth to double digit over the medium term. Uncertainties with respect to Coronavirus in Kerala and China (being key supplier for electrical components) can affect near term earnings.
We retain Buy on V-Guard Industries Limited (V-Guard) with a revised PT of Rs. 270 lowering our valuation multiple due to near term headwinds and rolling forward it to FY22E earnings.
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