Inventory losses hit EBITDA marginVGUARD - 297 Change: -4.70 (-1.56 %)
News: On a favourable base, the company's net sales increased by 80.2 % YoY in Q1FY23 to Rs 1018.3 crore. All three categories contributed significantly to the strong topline increase. Revenues increased at a CAGR of 13% over the course of three years, with the ‘Consumer Durables’ and ‘Electricals’ segments leading the way with growth rates of 25% and 15%, respectively. Due to the usage of high-cost inventories in the Electricals business, gross margin decreased by 366 bps YoY. EBITDA margin on a YoY basis was steady at 8.1 % due to savings in employee costs and other expenses. PAT climbed by 109 percent YoY to Rs 53 crore.
Views: We believe V-Guard has demonstrated solid topline performance, driven by significant sales growth in non-South regions. The Non-South region's revenue increased at a faster rate of 96 % YoY to Rs474 crore. However, inventory losses brought about by the sharp decline in copper prices weighed down EBITDA margin.