Buy V-Guard Industries; target of Rs 528: Sharekhan

Sharekhan's research report on V-Guard Industries

Standalone net profit grew by 55% y-o-y, aided by a 23.2% y-o-y revenue growth and a 130 bps y-o-y rise in OPM. Gross margin improved by 220 bps y-o-y. Management expects sustained demand momentum to aid higher revenue growth in FY2025 with a focus on reverting to 10-10.5% EBITDA margin. One-fourth of loan related to acquisition of Sunflame has been repaid and management expects to fully repay associated loans by Q1 FY26. In-house manufacturing is expected to increase to 75% over the next 12-18 months from 65% currently.

Outlook

We retain a Buy rating with a revised PT of Rs. 530, increasing our valuation multiple, given its strong earnings growth trajectory over the next two years.

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