V-Guard Industries Limited has informed the Exchange about Investor Presentation
October 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 and half year ended September 30, 2022.
Kindly take the above information on your records.
Thanking You,
For V-Guard Industries Limited JAYASREE KAMALA Jayasree K Company Secretary
Digitally signed by JAYASREE KAMALA Date: 2022.10.27 18:19:51 +05'30'
Encl: as stated
V-GUARD INDUSTRIES LTD. Regd. office 42/962, Vennala High School Road, Vennala, Kochi - 682 028. CIN:L31200Kll996PLC010010
P +91 484 433 5000, 200 5000 E mail@vguard.in W www.vguard.in
V-Guard Industries Q2 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
06-09
Segment-wise/Geographical Breakup of Revenues
10-12
Annexure
13-15
Managing Director’s Message
4
Commenting on the performance for Q2 FY23, Mr. Mithun Chittilappilly, Managing Director – V-Guard Industries Limited said, “We reported revenues of Rs. 980 crore in Q2 FY23, delivering revenue growth of 8.6% on a year-on-year basis (3-year CAGR of 16.6%). This is a fairly strong performance considering that there was a high base in the corresponding quarter last year. We have also witnessed some softness in demand in the latter part of the quarter.
On a segmental basis, the Consumer Durables segment reported strong growth followed by the Electronics segment which has sustained its improved trajectory of performance. The Electricals segment was nearly flat, reflecting the effect of price reduction in Wires.
During the quarter, South and Non-South markets grew by 2.6% and 17.8% YoY respectively. With continued strong growth from Non-South markets, they contributed 42.7% of total revenue in Q2 FY23, higher than 39.4% in Q2 FY22. With consistently increasing contribution from Non-South markets, we are gaining scale across all regions of the country.
Margins for the quarter were impacted by sale of higher cost Wires inventory at relatively lower realizations due to a fall in copper prices. Even in the other categories, input costs remain significantly higher than long term averages, despite some reduction seen in the last few months. Hence Profit After Tax was Rs. 43 crore in Q2 FY23 compared to Rs. 59 crore in Q2 FY22, a decline of 27% YoY.
We had indicated our plan to bring down inventories back to their normative levels. However, due to some softness in demand towards the end of the quarter, the reduction in inventory days was not as sharp as anticipated. While it may take a little longer than planned, we will revert to normal inventory levels in the coming months.”
Key Highlights – Q2 FY23
Revenue increased by 8.6% YoY in Q2 FY23
• Q2 FY23 revenue increased by 8.6% YoY to Rs. 980.7 crore • South and Non-South markets witnessed YoY growth of 2.6% and 17.8%, respectively • Non-South markets contributed to 42.7% of total revenues in Q2 FY23 as compared to 39.4% in Q2 FY22
EBITDA performance and PAT
• Gross margin contracted by 230 bps YoY, at 28.6% in Q2 FY23 due to price reduction in wires’ business • Ad/promotional spends, at 2.2% of revenues in Q2 FY23 as compared to 1.5% in Q2 FY22 now starting to normalize after dipping • EBITDA at Rs. 70.7 crore in Q2 FY23 declined 24.4% YoY, as compared to Rs. 93.6 crore in Q2 FY22 • EBITDA margins contracted by 315 bps YoY, at 7.2% as compared to 10.4% in Q2 FY22 • Q2 FY23 PAT of Rs. 43.1 crore, decreased 27.0% YoY due to lower gross margin
Strong cash flow generation and balance sheet
• CFO generation at the end of H1 FY23 at Rs. 234.0 crore, improved significantly as compared to Rs. 26.2 crore at the end of H1 FY22 • ROE and ROCE at 16.6% and 20.3%, respectively over the last 12 months • Net cash of Rs. 151.2 crore on balance sheet as on 30th September 2022, as against Rs. 184.9 crore as on 30th September 2021
5
5
P&L Snapshot
P&L Statement
Particulars
Net Revenue
COGS
Gross Margin
Q2 FY23
Q2 FY22
Change
Q1 FY23
H1 FY23
H1 FY22
Change
(Rs. Cr)
(Rs. Cr)
%
(Rs. Cr)
(Rs. Cr)
(Rs. Cr)
%
6
980.66
902.96
8.6%
1,009.64
1,990.30
1,463.69
699.94
623.65
12.2%
709.27
1,409.21
999.22
28.6%
30.9%
-2.3%
29.8%
29.2%
31.7%
EBITDA (excluding other income)
70.69
93.55
-24.4%
81.89
152.58
136.92
as a % to Net Revenue (NR)
Other Income (including finance income)
7.2%
3.47
10.4%
-3.2%
2.73
27.2%
8.1%
5.06
7.7%
8.53
9.4%
6.70
EBITDA including other income
74.16
96.28
-23.0%
86.95
161.11
143.61
as a % to NR
PBT
as a % to NR
PAT
as a % to NR
7.6%
10.7%
-3.1%
8.6%
8.1%
9.8%
58.35
82.44
-29.2%
72.33
130.67
117.35
5.9%
9.1%
-3.2%
43.14
59.06
-27.0%
4.4%
6.5%
-2.1%
7.2%
54.02
5.4%
6.6%
8.0%
97.17
83.69
4.9%
5.7%
36.0%
41.0%
-2.5%
11.4%
-1.7%
27.3%
12.2%
-1.7%
11.3%
-1.5%
16.1%
-0.8%
Financial Highlights (Q2 FY23 vs. Q2 FY22)
7
Total Income (Rs. crore)
Gross Profit
279
281
903
981
Key ratios (%)
Gross Margin
8.6%
0.5%
EBITDA Margin (excl. other income)
Q2 FY22
Q2 FY23
Q2 FY22
Q2 FY23
Net Margin
EBITDA (Rs. crore) 94
71
PAT (Rs. crore)
Ad & Promotion Exp./ Total Revenues
Employee Cost/ Total Operating Income
Other Expenditure/ Total Operating Income
59
43
Tax rate
Diluted EPS (Rs.)
-24.4%
-27.0%
Q2 FY22
Q2 FY23
Q2 FY22
Q2 FY23
Q2 FY23
Q2 FY22
28.6%
7.2%
4.4%
2.2%
6.6%
14.8%
26.1%
0.99
30.9%
10.4%
6.5%
1.5%
7.8%
12.7%
28.4%
1.36
Financial Highlights (H1 FY23 vs H1 FY22)
8
Total Income (Rs. crore)
1,990
1,464
Gross Profit
581
465
36.0%
25.1%
H1 FY22
H1 FY23
H1 FY22
H1 FY23
EBITDA (Rs. crore)
137
153
PAT (Rs. crore) 97
84
11.4%
16.1%
H1 FY22
H1 FY23
H1 FY22
H1 FY23
Key ratios (%)
Gross Margin
H1 FY23
H1 FY22
29.2%
31.7%
EBITDA Margin (excl other income)
Net Margin
Ad & Promotion Exp./ Total Revenues
Employee Cost/ Total Operating Income
Other Expenditure/ Total Operating Income
Tax rate
Diluted EPS (Rs.)
7.7%
4.9%
2.1%
7.2%
14.4%
25.6%
2.22
9.4%
5.7%
1.9%
8.8%
13.6%
28.7%
1.93
Financial Highlights – Balance Sheet Perspective
Balance Sheet Snapshot (Rs. Cr)
30 September 2022
30 June 2022
30 September 2021
Net Worth
Gross Debt
Current Investments
Cash & Cash Equivalents (inc. bank balance)
Net Cash Position (Rs. crore)
Fixed Assets
1,450.6
10.0
100.6
60.6
151.2
451.1
1,460.7
10.0
70.1
113.1
173.2
422.6
1,249.0
10
5.0
189.9
184.9
391.3
Balance Sheet Snapshot (Rs. Cr)
30 September 2022
30 June 2022
30 September 2021
Debtor (days)*
Inventory (days)*
Creditor (days)*
Working Capital Turnover (days)
RoE* (%)
RoCE* (%)
34
103
49
88
16.6%
20.3%
34
108
58
84
17.5%
22.0%
41
125
81
84
18.3%
25.3%
Note: *Calculations are on a trailing twelve month basis
9
9
Segment-wise Breakup – Q2 FY23 vs. Q2 FY22
10
Segment Revenue
Electronics
Electricals
Consumer Durables
Grand Total
Segment Result
Electronics
Electricals
Consumer Durables
Grand Total
Q2 FY23 (Rs. Cr)
227.4
416.1
337.2
980.7
Q2 FY23
(Rs. Cr)
34.1
21.2
9.7
65.0
Contribution (%)
23.2%
42.4%
34.4%
100.0%
Margin (%)
15.0%
5.1%
2.9%
6.6%
Q2 FY22 (Rs. Cr)
209.2
414.4
279.4
903.0
Q2 FY22
(Rs. Cr)
40.1
40.4
8.5
89.0
Contribution (%)
YoY growth (%)
23.2%
45.9%
30.9%
100.0%
Margin (%)
19.1%
9.8%
3.0%
9.9%
8.7%
0.4%
20.7%
8.6%
YoY growth
(%)
-15.0%
-47.5%
14.5%
-27.0%
Electronics – Stabilizers, UPS, Inverters Electricals – Wires, Pumps, Switchgears, Modular Switches Consumer Durables – Fans, Water Heaters, Kitchen Appliances, Air Coolers
Segment-wise Breakup – H1 FY23 vs H1 FY22
11
Segment Revenue
Electronics Electricals
Consumer Durables
Grand Total
Segment Result
Electronics Electricals Consumer Durables Grand Total
H1 FY23 (Rs. Cr) 530.7
823.3
636.2
1,990.3
H1 FY23 (Rs. Cr) 78.1
49.0
13.5
140.5
Contribution (%)
26.7%
41.4%
32.0%
100.0%
Margin (%)
14.7%
5.9%
2.1%
7.1%
H1 FY22 (Rs. Cr) 368.1
666.4
429.1
1,463.7
H1 FY22 (Rs. Cr) 60.8
64.1
2.6
127.5
Contribution (%)
25.2%
45.5%
29.3%
100.0%
Margin (%)
16.5%
9.6%
0.6%
8.7%
YoY growth (%) 44.2%
23.5%
48.3%
36.0%
YoY growth (%) 28.5%
-23.6%
425.9%
10.3%
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
Q2 FY23
(Rs. Cr)
561.6
419.1
980.7
H1 FY23
(Rs. Cr)
1,097.2
893.1
1,990.4
Contribution (%)
57.3%
42.7%
100%
Contribution (%)
55.1%
44.9%
100%
Q2 FY22
(Rs. Cr)
547.3
355.6
903.0
H1 FY22
(Rs. Cr)
865.8
597.9
1,463.7
Contribution (%)
60.6%
39.4%
100%
Contribution (%)
59.1%
40.9%
100.0%
YoY growth
(%)
2.6%
17.8%
8.6%
YoY growth
(%)
26.7%
49.4%
36.0%
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 FY22. 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
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