Buy V Guard Industries; target of Rs 475: Anand Rathi

Anand Rathi's research report on V Guard Industries

Strong electronics growth continued for V Guard, supported by an uptick in the electrical portfolio driven by higher copper prices. ECD grew in line with the industry, while Sunflame continued to underperform. Electronics growth is expected to stay strong, led by stabilizers, inverter batteries and the solar rooftop segment. The battery business is growing in double digits, with plans to expand capacity through capex of Rs500m. The solar rooftop business is performing well and is expected to become a significant contributor over 4–5 years. Management guided for 14–15% revenue growth, with stable-toimproving margins.

Outlook

We retain a Buy rating, with a higher TP of Rs 475.