V Guard Industries -
Q4 and FY 26 results and concall highlights -
Q4 outcomes -
Revenues - 1755 vs 1538 cr, up 14 pc
Gross margins @ 35.3 vs 35.5 pc
EBITDA - 170 vs 143 cr, up 19 pc ( margins @ 9.7 vs 9.3 pc )
PAT - 112 vs 91 cr, up 23 pc
Segmental revenues and margins -
Electronics - 498 cr, margins @ 17.4 pc
Electrical - 771 cr, margins @ 12.3 pc
CD - 426 cr, margins @ 1.6 pc
Sunflame - 60 cr, margins @ 6.7 pc
FY 26 outcomes -
Revenues - 5965 cr, up 7 pc
Gross margins @ 36.3 vs 36.3 pc
EBITDA - 526 vs 513 cr, up 3 pc ( margins @ 8.8 vs 9.2 pc )
PAT - 308 vs 313 cr ( had to take a one time hit of 22 cr due implementation of new labour codes )
Segmental revenues and margins -
Electronics - 1639 cr ( up 8.6 pc ), margins @ 17.9 pc
Electrical - 2461 cr ( up 13.4 pc ), margins @ 11.4 pc
CD - 1615 cr ( down 1.7 pc ), margins @ 1.6 pc
Sunflame - 250 cr ( down 1.6 pc ), margins @ 5.3 pc
Its ranked no 1 in India in voltage stabilizers. Company is ranked No 3 in India in - Solar water heaters, water heaters and pumps. It’s ranked No 5 in home wiring segment and 7th in Fans. Other segments where the company is present and growing its share include - Switchgears, Batteries, Kitchen appliances, air coolers and modular switches
Cash on books @ 231 cr
They have invested heavily in last 4-5 yrs ( aprox 400 cr ) in improving share of in-house manufacturing. It improves margins and gives them better control over product design and quality. Share of in house manufacturing now stands @ 65 pc
Notes from Q4 concall -
All the growth recorded in FY 26 came in H2
South : Non South growth in Q4 @ 16 pc : 12 pc
South : Non South revenue contribution to full yr’s revenues @ 52 : 48
Seeing better demand trends for Kitchen appliances iro both Sunflame and V Guard branded products. This category has been in slumber post the demand surge seen during Covid times. Now seeing some recovery
Avg hike in RM prices over last 2-3 months ( across categories ) has been in the range of 8-13 pc. Company has already passed on 75 pc of this. Shall pass on the rest in near future. Most companies are doing the same
Did see descent summer sales for fans / coolers in Apr ( vs tepid trends in Q4 ) in South Indian mkts
Aprox 15 pc of company’s sales come from Kerala
Not only are the RM prices going up, some RMs are in short supply as well. Some smaller players may even have to reduce / halt production due to this
Consumer Durables ( CD segment ) reported margins of 4.2 pc in FY 25 vs 1.6 pc in FY 26 ( must have been due to substantially weak summers in H1 FY 26 ) - if company can turn this around in FY 27, can make a big improvement to their bottomline
Sunflame integration ( wrt processes / sales force etc ) is now complete. Should see benefits to flow in FY 27
Aprox 40 pc of their ceiling fan sales now come from BLDC variants
Seeing descent traction of BLDC tech in the Chimneys category as well
Should see much better growth in CD segment in current FY ( specially in fans + cooler category ) due much better summers and low base of LY
Wires is a structurally low GM category. One needs to have a scale of at least 1000 cr / yr to make money in this category
Electronics volume growth in Q4 was @ strong 14 pc
Should be able to grow in Mid Teens in FY 27. Confident of a > 10 pc kind of volume growth in FY 27 as LY’s base was low
Aiming for 10 pc kind of EBITDA margins for FY 27. Had the RM prices not flared up, would have aimed for 11-12 pc kind of EBITDA margins
According to the management - if one is not among top 5 player in any FMEG category, it is literally impossible to make money over medium to long term
The Solar Systems ( panel + inverter + battery ) is a high growth area for the company. Company makes the Inverters and Batteries in house. Company ventured into this segment only 3 yrs back. This category has the potential to become one of the largest category for the company ( in next 3-4 yrs )
Disc: initiated a small tracking position, biased, not SEBI registered, posted only for educational purposes