V-Guard Industries Limited has informed the Exchange about Investor Presentation
February 2, 2022
The Manager Listing Department, BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400 001
Ref:- Scrip Code: 532953
Dear Sir / Madam,
The Manager Listing Department, National Stock Exchange of India Limited, Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra- East, Mumbai- 400 051 Ref:- Symbol: VGUARD
Sub: Submission of Investor presentation pursuant to Regulation 30 of SEBI (Listing
Obligations and Disclosures Requirements) Regulations, 2015.
Pursuant to Regulation 30 read with Para A of Part A of Schedule III of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, we hereby submit the Earnings Presentation on Unaudited Financial Results of the Company for the quarter and nine months ended December 31, 2021.
Kindly take the above information on your records.
Thanking You,
For V-Guard Industries Limited
Jayasree K Company Secretary
Encl: as stated
V-GUARD INDUSTRIES LTD. Regd. office 42/962, Vennala High School Road, Vennala, Kochi - 682 028. CIN: L31200KL1996PLC010010
P +91 484 433 5000, 200 5000 E mail@vguard.in W www.vguard.in
V-Guard Industries Q3 FY22 Earnings Presentation
Disclaimer
2
Certain statements
in this communication may be ‘forward looking
statements’ within the meaning of applicable laws and regulations. These
forward-looking statements involve a number of risks, uncertainties and
other factors that could cause actual results to differ materially from
those
suggested by
the
forward-looking statements.
Important
developments
that could affect
the Company’s operations
include
changes in the industry structure, significant changes in political and
economic environment in India and overseas, tax laws,
import duties,
litigation and labour relations.
V-Guard Industries Limited (V-Guard) will not be in any way
responsible for any action taken based on such statements and
undertakes no obligation to publicly update these forward-looking
statements to reflect subsequent events or circumstances.
Table of Contents
3
MD’s Message
Key Highlights
Financial Highlights
04
05
6-9
Segment-wise/Geographical Breakup of Revenues
10-12
Annexure
13-15
Managing Director’s Message
4
Commenting on the performance for Q3 FY22, Mr. Mithun Chittilappilly, Managing Director – V-Guard Industries Limited said, “During the third quarter, we have delivered 16% year-on-year revenue growth. While the quarter started on a strong note with positive demand momentum in the festive season, emergence of the third wave caused growth to be muted subsequently. The impact was felt across our key markets and more so in the Eastern region where we have strong presence. Revenue growth was strong across electricals and consumer durable segments, while electronics showed a marginal decline during Q3.
The third quarter also saw the continuing impact of commodity price inflation on margins. While we have taken several pricing actions to offset this to a large extent, some more price increases are required in the coming months to restore margins to normative levels.
Operating costs have been higher on a year-on-year basis. This includes an increase in advertising and promotion (A&P) expenses which were at 1.8% of revenues in Q3 compared to 0.9% of revenues in the year ago period. Factory- related costs have risen with the starting of manufacturing facilities in Roorkee and Sikkim. Other cost elements such as travel and freight are also higher as branch operations return to regular mode and due to significantly higher diesel prices.
During the quarter, we have made further investment to the extent of Rs. 19.13 crore in V-Guard Consumer Products (VCPL), our wholly owned subsidiary taking the total investment to Rs 44.63 crore. The first manufacturing project undertaken by VCPL is currently under implementation and some other projects are in the pipeline. These projects will reduce reliance on imports / OEMs and deliver efficiencies over time.
We have operated with increased working capital this year, maintaining higher inventory levels to offset any supply side disruptions. Lower than expected demand towards the end of the quarter also resulted in rising inventory days. We will revert to normal inventory levels in the next few months, resulting in stronger cash flows from the business.
Going forward, with the government’s continued focus on investing in progressive initiatives, we see the country progressing consistently leading to secular demand growth in our product categories, especially for quality, innovation and service driven products. V-Guard is well-positioned to benefit from these trends.”
Key Highlights – Q3 FY22
Revenue increased by 16.1% YoY in Q3 FY22
• Q3 FY22 revenue increased by 16.1% YoY to Rs. 960.7 crore despite the impact of the third wave in the post-festive season period • South and Non-South markets witnessed YoY growth of 15.0% and 17.7%, respectively • Non-South markets contributed to 41.8% of total revenue in Q3 FY22, up from 41.2% in Q3 FY21
Decrease in EBITDA and PAT
• Gross margins contracted by 201 bps YoY, at 30.6% in Q3 FY22 as high commodity costs continue to impact margins • Ad/promotional spends (exclusive of schemes) increased, at 1.8% of revenues in Q3 FY22 as compared to 0.9% in Q3 FY21 • Q3 FY22 PAT of Rs. 52.5 crore, decreased 31.8% YoY; PAT margin at 5.5% as against 9.3% in Q3 FY21 • EBITDA decreased to Rs. 84.4 crore in Q3 FY22 from Rs. 113.6 crore, by 25.7% • EBITDA margins at 8.8% as compared to 13.7% in Q3 FY21
Cash flow generation and balance sheet
• CFO generation in 9M FY22 was negative at Rs. 86.6 crore as higher inventory was maintained to overcome possible supply disruptions • ROE and ROCE at 15.7% and 21.7% respectively for the trailing 12 months ended 31st December 2021 • Net cash of Rs. 25.8 crore on balance sheet as on 31st December 2021, as against Rs. 482.3 crore as on 31st December 2020
5
5
P&L Snapshot
P&L Statement Particulars
Net Revenue
COGS
Gross Margin
Q3 FY22 (Rs. Cr)
Q3 FY21 (Rs. Cr)
Change %
Q2 FY22 (Rs. Cr)
9M FY22 (Rs. Cr)
9M FY21 (Rs. Cr)
Change %
6
960.70
827.41
666.37
557.28
30.6%
32.6%
16.1%
19.6%
-2.0%
902.96
2,424.39
1,849.91
623.65
1,665.59
1,266.49
30.9%
31.3%
31.5%
EBITDA (excluding other income)
84.40
113.57
-25.7%
93.55
221.32
196.56
as a % to Net Revenue (NR)
Other Income (including finance income)
EBITDA including other income
as a % to NR
PBT
as a % to NR
PAT
as a % to NR
8.8%
2.93
87.33
9.1%
72.46
7.5%
52.50
5.5%
13.7%
-4.9%
10.4%
5.42
-45.9%
118.99
-26.6%
14.4%
-5.3%
108.44
-33.2%
13.1%
-5.6%
2.73
96.28
10.7%
82.44
9.1%
10.6%
9.1%
9.63
16.74
-42.5%
230.95
213.30
9.5%
11.5%
189.81
184.38
7.8%
10.0%
77.02
-31.8%
59.06
136.19
130.65
9.3%
-3.8%
6.5%
5.6%
7.1%
31.1%
31.5%
-0.2%
12.6%
-1.5%
8.3%
-2.0%
2.9%
-2.1%
4.2%
-1.4%
Financial Highlights (Q3 FY22 vs Q3 FY21)
7
Total Income (Rs. crore)
Gross Profit
827
961
270
294
Key ratios (%)
Gross Margin
16.1%
9.0%
EBITDA Margin (excl. other income)
Q3 FY21
Q3 FY22
Q3 FY21
Q3 FY22
Net Margin
EBITDA (Rs. crore)
PAT (Rs. crore)
Ad & Promotion Exp. (excl. schemes)/ Total Revenues
Employee Cost/ Total Operating Income
114
77
Other Expenditure/ Total Operating Income
84
53
Tax rate
Diluted EPS (Rs.)
-25.7%
-31.8%
Q3 FY21
Q3 FY22
Q3 FY21
Q3 FY22
Q3 FY22
Q3 FY21
30.6%
8.8%
5.5%
1.8%
7.8%
14.0%
27.5%
1.21
32.6%
13.7%
9.3%
0.9%
7.6%
11.3%
29.0%
1.78
Financial Highlights (9M FY22 vs. 9M FY21)
8
Total Income (Rs. crore)
2,424
Gross Profit
759
1,850
583
31.1%
30.1%
9M FY21
9M FY22
9M FY21
9M FY22
EBITDA (Rs. crore)
221
197
PAT (Rs. crore) 136
131
12.6%
4.2%
9M FY21
9M FY22
9M FY21
9M FY22
Key ratios (%)
Gross Margin
9M FY22
9M FY21
31.3%
31.5%
EBITDA Margin (excl other income)
Net Margin
Ad & Promotion Exp. (excl. schemes)/ Total Revenues
Employee Cost/ Total Operating Income
Other Expenditure/ Total Operating Income
Tax rate
Diluted EPS (Rs.)
9.1%
5.6%
1.9%
8.4%
13.8%
28.2%
3.14
10.6%
7.1%
0.8%
9.1%
11.9%
29.1%
3.02
Financial Highlights – Balance Sheet Perspective
Balance Sheet Snapshot (Rs. Cr)
31 December 2021
30 September 2021
31 December 2020
Net Worth
Gross Debt
Current Investments
Cash & Cash Equivalents (inc. bank balance)
Net Cash Position (Rs. crore)
Fixed Assets
1,305.7
10.0
0.0
35.8
25.8
402.3
1,249.0
10.0
5.02
189.9
184.9
391.3
1,133.0
10.0
0.0
492.3
482.3
337.5
Balance Sheet Snapshot (Rs. Cr)
31 December 2021
30 September 2021
31 December 2020
Debtor (days)*
Inventory (days)*
Creditor (days)*
Working Capital Turnover (days)
RoE* (%)
RoCE* (%)
41
142
81
102
15.7%
21.7%
41
125
81
84
18.3%
25.3%
42
101
94
48
14.4%
18.4%
Note: *Calculations are on a trailing twelve month basis
9
9
Segment-wise Breakup – Q3 FY22 vs. Q3 FY21
10
Segment Revenue
Electronics
Electricals
Consumer Durables
Grand Total
Segment Result
Electronics
Electricals
Consumer Durables
Grand Total
Q3 FY22 (Rs. Cr)
199.9
422.5
338.4
960.7
Q3 FY22
(Rs. Cr)
34.1
33.4
9.6
77.1
Contribution (%)
20.8%
44.0%
35.2%
100.0%
Margin (%)
17.1%
7.9%
2.8%
8.0%
Q3 FY21 (Rs. Cr)
207.4
355.9
264.1
827.4
Q3 FY21
(Rs. Cr)
51.2
31.3
26.4
108.9
Contribution (%)
YoY growth (%)
25.1%
43.0%
31.9%
100.0%
Margin (%)
24.7%
8.8%
10.0%
13.2%
-3.7%
18.7%
28.1%
16.1%
YoY growth
(%)
-33.4%
6.8%
-63.8%
-29.2%
Electronics – Stabilizers, UPS, Inverters Electricals – Wires, Pumps, Switchgears, Modular Switches Consumer Durables – Fans, Water Heaters, Kitchen Appliances, Air Coolers
Segment-wise Breakup – 9M FY22 vs 9M FY21
11
Segment Revenue
Electronics Electricals
Consumer Durables
Grand Total
Segment Result
Electronics Electricals Consumer Durables Grand Total
9M FY22 (Rs. Cr) 568.0
1,088.9
767.5
2,424.4
9M FY22 (Rs. Cr) 94.8
97.6
12.1
204.6
Contribution (%)
23.4%
44.9%
31.7%
100.0%
Margin (%)
16.7%
9.0%
1.6%
8.4%
9M FY21 (Rs. Cr) 516.1
820.8
513.0
1,849.9
9M FY21 (Rs. Cr) 91.1
63.5
31.4
185.9
Contribution (%)
27.9%
44.4%
27.7%
100.0%
Margin (%)
17.6%
7.7%
6.1%
10.0%
YoY growth (%) 10.1%
32.7%
49.6%
31.1%
YoY growth (%) 4.1%
53.7%
-61.3%
10.0%
Electronics – Stabilizers, UPS, Inverters Electricals – Wires, Pumps, Switchgears, Modular Switches Consumer Durables – Fans, Water Heaters, Kitchen Appliances, Air Coolers
Geographical Breakup of Revenues
12
Region
South
Non-South
Total Revenue
Region
South
Non-South
Total Revenue
Q3 FY22
(Rs. Cr)
559.3
401.4
960.7
9M FY22
(Rs. Cr)
1,425.0
999.3
2,424.4
Contribution (%)
58.2%
41.8%
100%
Contribution (%)
58.8%
41.2%
100.0%
Q3 FY21
(Rs. Cr)
486.3
341.1
827.4
9M FY21
(Rs. Cr)
1,100.4
749.5
1,849.9
Contribution (%)
58.8%
41.2%
100%
Contribution (%)
59.5%
40.5%
100.0%
YoY growth
(%)
15.0%
17.7%
16.1%
YoY growth
(%)
29.5%
33.3%
31.1%
Market Overview of V-Guard’s Product Portfolio
14
Electronics
Product
Total Market Size (Rs. Crs.)
Indicative Org. Market Size (%)
Industry Growth Rate (%)
VG Share in Org. Market (%)
Key Players
Stabilizers
1,700-1,800
55-60%
7-8%
42-45%
DUPS & Battery
11,500 -12,000
65-70%
8-10%
4-6%
Microtek, Livguard, Bluebird
Luminous, Microtek, Exide
Electricals
Product
Total Market Size (Rs. Crs.)
Indicative Org. Market Size (%)
Industry Growth Rate (%)
VG Share in Org. Market (%)
Key Players
House Wiring Cables 16,500 -17,000
62-65%
8-10%
6-8%
Switchgears*
3,000-3,500
75-80%
8-10%
3-5%
Modular Switches
6,000-6,500
70-75%
8-10%
**
Pumps*
3,000-3,500
60-65%
5-8%
8-10%
Polycab, Finolex, Havells
Havells, Legrand, Schneider
Anchor, Legrand, Havells
Crompton, Kirloskar, CRI
*Market estimates of VG active product segments only | ** Recent entry/ Growth plan under activation
Market Overview of V-Guard’s Product Portfolio
15
Appliances
Product
Total Market Size (Rs. Crs.)
Indicative Org. Market Size (%)
Industry Growth Rate (%)
VG Share in Org. Market (%)
Key Players
Water Heaters
2,500-2,600
65-70%
10-12%
14-16%
Havells, Bajaj, Crompton, Racold
Electric Fans
9,200-9,500
75-80%
8-10%
3-5%
Crompton, Usha, Havells, Orient Bajaj
Solar Water Heaters
500-600
60-65%
6-8%
14-16%
Sudarshan Saur, Supreme Solar
Air Coolers
4,500-5,000
30-35%
15-20%
**
Symphony, Bajaj, Voltas
Kitchen Appliances -
• Mixer Grinders • Gas Stoves • Water Purifiers • Other Small Kitchen
Appliances#
12,000-14,000
65-75%
8-10%
**
Mixer Grinders - Bajaj, Preethi, Prestige Gas Stoves - Stovekraft, Sunflame, Butterfly Water Purifiers - Eureka Forbes, Kent RO, HUL Pureit Others - Faber, Bajaj, Havells
# Includes Induction Cooktop, Rice Cooker, Sandwich Makers, Toasters, Grills, Kettles, Chimneys, etc. ** Recent entry/ Growth plan under activation
About V-Guard Industries
V-Guard Industries Limited (BSE:532953, NSE: VGUARD) is a Kochi based company, founded in 1977 by Kochouseph Chittilapilly to manufacture and market Voltage stabilizers. The Company has since then established a strong brand name and aggressively diversified to become a multi-product Company catering to the Light Electricals sector manufacturing Voltage stabilizers, Digital UPS systems & Batteries, Pumps, House wiring cables, Switch gears, Modular switches, Electric water heaters, Fans, Solar water heaters, Air coolers and various Kitchen appliances.
V-Guard outsources ~ 50% of its product profile while the rest are manufactured in – house while keeping a strong control in designs and quality. It has manufacturing facilities at Coimbatore (Tamil Nadu), Kashipur & Roorkee (Uttarakhand), Kala Amb (Himachal Pradesh) and Sikkim.
V-Guard has been a dominant player in the South market, though the last ten years have also seen the Company expanding rapidly in the non-South geographies with their contribution increasing from 5% of total revenues in FY08 to around 42% of total revenues in FY21. Significant investments continue to be made to expand its outlet coverage in the non-South geographies and become a dominant pan-India player.
V-Guard has a diversified client base and an extensive marketing & distribution network. to product and includes direct marketing agents, distributors and retailers. The Company today has a strong network of 31 branches which cover ~40,000+ retailers across the country.
Its client base differs from product
16
For further information, please contact:
Sudarshan Kasturi (Senior VP & CFO)
V-Guard Industries Limited
Tel: +91 484 300 5601
Email: sudarshan.kasturi@vguard.in
Shiv Muttoo / Shruti Joshi
CDR India
Tel: +91 983 355 7572 / +91 750 656 7349
Email: shiv@cdr-india.com / shruti@cdr-india.com
THANK YOU