Dolat Capital's research report on V-Guard Industries
V-Guard saw Sales declined 42% at Rs4bn, while EBIDTA was down 87% at Rs91mn. EBIDTA margins were down 794bps yoy at 2.2, while PAT was down 93% at Rs36mn. However, WC improved sequentially on the back of inventory drawdown and better collections in the quarter. 72% of its portfolio, contributing 83% of its profits, depend on growth of other products like ACs and appliances or geared towards long cycle recovery plays like real estate. We trim our FY21 estimates to factor in the weak Q1 numbers (Refer Exhibit 2).
While V-Guard is a well-run company with quality management, given the longer recovery cycle, we maintain Reduce with a TP of Rs180, valuing it at 38XFY22E.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.