V-Guard Industries' electricals, consumer durables segment drive toplineVGUARD - 219 Change: -5.95 (-2.64 %)
News: V-Guard’s consolidated revenue increased by ~24% YoY to ~Rs. 1058.2 crore led by increase in revenues of electricals and consumer durables segment. However, Electronics segment grew at a slower pace of ~2% YoY to Rs. 247 crore. Higher raw material prices dragged down EBITDA margin by 242 bps YoY to 10.5%. Strong revenue growth and lower tax provision led to increase in PAT by 31% YoY to ~Rs. 90 crore. At a payout ratio of 25%, the company announced final dividend of Rs. 1.30/share
Views: We believe that, V-Guard industries reported a better than expected performance. However, EBITDA margin is impacted by raw material prices and impact on gross margin could be attributed to lower sales of high margin products. We await management commentary on price hikes to mitigate higher raw material prices which is affecting the rural demand.