Buy V-Guard Industries; target of Rs 393: Geojit Financial Services

Geojit Financial Services is bullish on V-Guard Industries has recommended buy rating on the stock with a target price of Rs 393 in its research report dated March 07, 2025.

Broker Research

March 07, 2025 / 13:29 IST

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Geojit Financial Services 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 Q3FY25, VGIL reported a stable 9% YoY revenue growth led by the electronics segment. However, wires & consumer durables were impacted by higher inventory in channels, volatility in copper prices, and muted consumer demand. Despite a 230bps YoY improvement in gross margins, EBITDA margin declined by 50bps YoY to 8.2% due to higher employee & other expenses. Given lower operating performance and higher depreciation expenses, reported net profit grew by a modest 3.4% YoY. We anticipate recovery starting from Q4, led by strong summer demand leading to better scale and improved margin performance. We anticipate FY26 to see better growth led by a pick-up in government spending, healthy demand from the construction sector, and summer products that will drive growth in the near term.

Outlook

We value VGIL at a P/E of 34x on FY27E and upgrade to BUY from Accumulate, given a healthy earnings outlook of 28% CAGR over FY25E-27E with a target price of Rs.393.

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