Sharekhan's research report on V-Guard Industries
V-Guard’s standalone performance bettered estimates on sales fronts but missed our OPM and net profit estimates due to inventory loss of Rs 10 crore. All the three segments - Electronics, Electricals and Consumer Durables reported healthy growth led by sustained demand and low base. Management is optimistic about good demand given a wider product portfolio, expansion in national presence by adding dealers and investments in capacity augmentation (cables and fans). Company expects GPM/OPM to revert to pre covid levels in the medium term given resilient consumer demand in most of its product categories, cooling off of commodity prices and increase in in-house manufacturing in the medium to long-term.
We retain a Buy on V-Guard Industries Ltd with an unchanged PT of Rs. 280 given encouraging business outlook coupled with strong balance sheet and improving working capital cycle.
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