- 30 May 2023
- ICICI Securities
V-Guard Industries' Q4 performance came majorly in line with our estimates on topline & margin front, however PAT came in lower than our estimates.
V-Guard Industries Ltd | CMP: 447 | Market Cap: 19,399.68
Q4FY23 Earnings Summary
View: We believe V-Guard's topline growth was majorly driven by its consumer durables segment on account of consolidation of Sunflame. However, revenue growth from Electronics and Electricals segment continued to remain under pressure amid subdued demand. In FY23, revenue from non-South region grew by ~26% YoY to ~| 1841 crore thereby contributing 45.3% to the overall revenue vs 41.6% contribution in FY22. Although, EBITDA margin declined on a YoY basis, we believe EBITDA margin at 8.7% has shown improvement in Q4 after remaining under pressure for last three quarters supported by improvement in gross margin. However, on the profitability front, PAT decline is majorly due to higher interest costs on account of debt raised for acquisition of Sunflame. We await management commentary on demand outlook and sustainable EBITDA margin guidance, going forward.
Impact: Neutral