V-Guard Industries Limited has informed the Exchange about Investor Presentation
July 27, 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 ended June 30, 2022.
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 Q1 FY23 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
06-08
Segment-wise/Geographical Breakup of Revenues
09-10
Annexure
11-13
Managing Director’s Message
4
Commenting on the performance for Q1 FY23, Mr. Mithun Chittilappilly, Managing Director – V- Guard Industries Limited said, “We are pleased to report a robust start to the fiscal year with consolidated net revenues of Rs. 1,018 crore in Q1, carrying forward the momentum from the previous quarter. This marks the highest ever revenue for us in the first quarter and is the second successive quarter with revenues crossing the threshold of Rs. 1,000 crore. While the Electricals and Consumer Durables segments continued to report strong growth, the Electronics segment has also stepped up to deliver an improved trajectory this quarter enabling strong topline growth from all segments.
During the quarter, we witnessed a broad-based contribution from both South and Non-South markets that witnessed YoY growth of 68.2% and 95.6%, respectively. With a near doubling of revenues from Non-South markets compared to the corresponding quarter last year, the revenue contribution is approaching parity with the South markets.
We continue to face pressure on margins due to commodity price inflation. The significant drop in copper prices during June affected Wires margins and this impact is likely to extend to some part of Q2. Costs of other key commodities have seen some reduction from their peaks, although they are still higher than long term averages. This has obviated the need for further price increases especially in Consumer Durables and we expect gross margins to recover to their normative levels over the next 1-2 quarters.
Inventory levels are beginning to normalize and this has contributed to improved cash flow from operations. Over the next 3-4 months, we expect inventories to fully revert to their normative levels.
Profit after tax has more than doubled on a year-on-year basis and marks a strong start to the fiscal year. V-Guard is well-positioned to build on this performance in the quarters ahead.”
Key Highlights – Q1 FY23
Revenue increased by 80% YoY in Q1 FY23
• Q1 FY23 revenue increased by 80.1% YoY to Rs. 1,009.6 crore. • South and Non-South markets witnessed YoY growth of 68.2% and 95.7%, respectively • Non-South markets contributed to 46.9% of total revenues in Q1 FY23 as compared to 43.2% in Q1 FY22
Strong EBITDA performance and robust increase in PAT
• Gross margin contracted by 330 bps YoY, at 29.8% in Q1 FY23 as high commodity costs continue to exert pressure • Ad/promotional spends, at 2.1% of revenues in Q1 FY23 as compared to 2.5% in Q1 FY22 now starting to normalize after dipping • EBITDA at Rs. 81.9 crore in Q1 FY23 increased 88.9% YoY, as compared to Rs. 43.4 crore in Q1 FY22 • EBITDA margins expanded by 40 bps YoY, at 8.1% as compared to 7.7% in Q1 FY22 • Q1 FY23 PAT of Rs. 54.0 crore, increased 119.3% YoY on the back of scaling of revenue and operational efficiencies
Strong cash flow generation and balance sheet
• CFO generation at the end of Q1 FY23 at Rs. 178.1 crore, improved significantly as compared to negative Rs. 101.5 crore at the end
of Q1 FY22.
• ROE and ROCE at 17.5% and 22.0%, respectively over the last 12 months • Net cash of Rs. 173.2 crore on balance sheet as on 30th June 2022, as against Rs. 154.0 crore as on 30th June 2021 on account of
improved working capital position.
5
5
P&L Snapshot
P&L Statement Particulars
Net Revenue
COGS
Gross Margin
EBITDA (excluding other income)
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
Q1 FY23 (Rs. Cr)
Q1 FY22 (Rs. Cr)
Change %
Q4 FY22 (Rs. Cr)
FY22 (Rs. Cr)
FY21 (Rs. Cr)
Change %
6
1,009.64
560.72
80.1%
1,050.27
3,474.66
2,699.00
88.9%
-3.3%
88.9%
0.4%
27.4%
83.7%
0.2%
709.27
375.57
29.8%
33.0%
81.89
43.36
748.37
2,413.95
1,848.73
28.7%
30.5%
31.5%
110.82
332.14
306.49
10.6%
3.30
9.6%
12.93
11.4%
21.10
-38.7%
7.7%
3.97
47.33
8.4%
34.91
6.2%
8.1%
5.06
86.95
8.6%
72.33
7.2%
54.02
5.4%
114.13
345.07
327.59
10.9%
9.9%
12.1%
107.2%
100.24
290.05
284.67
0.9%
9.5%
8.3%
10.5%
24.63
119.3%
90.60
226.80
198.98
4.4%
1.0%
8.6%
6.5%
7.4%
28.7%
30.6%
-1.0%
8.4%
-1.8%
5.3%
-2.2%
1.9%
-2.2%
14.0%
-0.8%
Financial Highlights (Q1 FY23 vs. Q1 FY22)
7
Total Income (Rs. crore)
Gross Profit
1,010
561
300
185
Key ratios (%)
Gross Margin
Q1 FY23
Q1 FY22
29.8%
33.0%
80.1%
62.2%
EBITDA Margin (excl. other income)
Q1 FY22
Q1 FY23
Q1 FY22
Q1 FY23
Net Margin
EBITDA (Rs. crore)
PAT (Rs. crore)
82
54
Employee Cost/ Total Operating Income
Other Expenditure/ Total Operating Income
Ad & Promotion Exp./ Total Revenues
43
25
88.9%
119.3%
Q1 FY22
Q1 FY23
Q1 FY22
Q1 FY23
Tax rate
Diluted EPS (Rs.)
8.1%
5.4%
2.1%
7.7%
14.0%
25.3%
1.24
7.7%
4.4%
2.5%
10.3%
15.0%
29.5%
0.57
Financial Highlights – Balance Sheet Perspective
Balance Sheet Snapshot (Rs. Cr)
30 June 2022
31 March 2022
30 June 2021
Net Worth
Gross Debt
Cash & Cash Equivalents (inc. bank balance)
Net Cash Position (Rs. crore)
Fixed Assets
1,460.7
10.0
113.1
173.2
422.6
1,402.5
10.0
53.9
43.9
416.5
1,236.1
10
164.0
154.0
379.1
Balance Sheet Snapshot (Rs. Cr)
30 June 2022
31 March 2022
30 June 2021
Debtor (days)*
Inventory (days)*
Creditor (days)*
Working Capital Turnover (days)
RoE* (%)
RoCE* (%)
34
108
58
84
17.5%
22.0%
50
129
73
106
16.2%
20.3%
35
123
52
106
17.8%
24.2%
Note: *Calculations are on a trailing twelve month basis
8
8
Segment-wise Breakup – Q1 FY23 vs. Q1 FY22
9
Segment Revenue
Electronics
Electricals
Consumer Durables
Grand Total
Segment Result
Electronics
Electricals
Consumer Durables
Grand Total
Q1 FY23 (Rs. Cr)
303.4
407.2
299.1
1009.6
Q1 FY23
(Rs. Cr)
44.0
27.8
3.8
75.6
Contribution (%)
30.0%
40.3%
29.6%
100.0%
Margin (%)
14.5%
6.8%
1.3%
7.5%
Q1 FY22 (Rs. Cr)
159.0
252.0
149.7
560.7
Q1 FY22
(Rs. Cr)
20.7
23.7
-5.9
38.5
Contribution (%)
YoY growth (%)
28.4%
44.9%
26.7%
100.0%
Margin (%)
13.0%
9.4%
-3.9%
6.9%
90.8%
61.6%
99.7%
80.1%
YoY growth
(%)
112.6%
17.2%
164.8%
96.3%
Electronics – Stabilizers, UPS, Inverters Electricals – Wires, Pumps, Switchgears, Modular Switches Consumer Durables – Fans, Water Heaters, Kitchen Appliances, Air Coolers
Geographical Breakup of Revenues
10
Region
South
Non-South
Total Revenue
Q1 FY23
(Rs. Cr)
535.6
474.0
1,009.6
Contribution (%)
53.1%
46.9%
100%
Q1 FY22
(Rs. Cr)
318.4
242.3
560.7
Contribution (%)
56.8%
43.2%
100%
YoY growth
(%)
68.2%
95.7%
80.1%
Market Overview of V-Guard’s Product Portfolio
12
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
13
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
14
For further information, please contact:
Sudarshan Kasturi (Senior VP & CFO)
V-Guard Industries Limited
Tel: +91 484 300 5601
Email: sudarshan.kasturi@vguard.in
Mayank Vaswani / Shruti Joshi
CDR India
Tel: +91 982 094 0953 / +91 750 656 7349
Email: mayank@cdr-india.com / shruti@cdr-india.com
THANK YOU