V-Guard Industries Limited has informed the Exchange about Investor Presentation
02-02-2023
The Manager Listing Department, BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400 001
Ref:- Scrip Code: 532953
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 Disclosure Requirements) Regulation 2015.
Dear Sir & Madam,
Pursuant to Regulation 30 read with Para A of Part A of Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, we hereby submit the earnings presentation on unaudited Financial Results of the Company for the quarter ended December 31, 2022.
Please take the above information on record.
Thanking you.
For V-Guard Industries Limited
Mithun K Chittilappilly Managing Director DIN: 00027610
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 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
07-10
Segment-wise/Geographical Breakup of Revenues
11-13
Annexure
14-16
Managing Director’s Message
4
Commenting on the performance for Q3 FY23, Mr. Mithun Chittilappilly, Managing Director – V-Guard Industries Limited said, “We have reported revenues of Rs. 981 crore in Q3FY23, higher by 1.4% on a year-on-year basis. Revenue growth has been impacted by the high base in the corresponding quarter of last year. Over the last 3 years, the CAGR in revenues is at 15.8%.
Within our segments, Consumer Durables led the growth trajectory for the quarter. This segment has now gained scale in topline and will begin to contribute more meaningfully to profitability going forward.
During the quarter, the South market de-grew by 5.2% y-o-y while the Non-South markets grew by 10.5% YoY. With continued strong growth from Non-South markets, they contributed 45.6% of total revenue in Q3 FY23, higher than 41.8% in Q3 FY22. We are making sustained progress in growing the business in the non- south markets and they are now making a sizeable contribution to the overall business performance.
Margins are still lower than pre-Covid levels especially in Durables, as we were holding more than normal inventories at a higher cost. There is also some impact from the changing mix of revenues as well as from A&P spends having returned to normal levels after two years of lower spending during Covid. With inventory levels having come down, we should see margins reverting to pre-Covid levels over the next two quarters.
We concluded the Sunflame acquisition in January. We have placed the initial set of people required to run the operations. In the next couple of months we expect to have the full management team in place and commence the integration process."
Based on Consolidated Financials
Key Highlights – Q3 FY23
Revenue increased by 1.4% YoY in Q3 FY23
• Q3 FY23 revenue increased by1.4% YoY to Rs. 980.8 crore • South markets witnessed a YoY decline of 5.2% whereas Non-South markets witnessed YoY growth of 10.5% • Non-South markets contributed to 45.6% of total revenues in Q3 FY23 as compared to 41.8% in Q3 FY22
EBITDA performance and PAT
• Gross margin contracted by 160 bps YoY, at 29.6% in Q3 FY23 due to effect of high-cost inventories in Consumer Durables segment
and shift in revenue mix
• Ad/promotional spends, at 2.7% of revenues in Q3 FY23 as compared to 1.7% in Q3 FY22 have reverted to normative levels • EBITDA at Rs. 65.9 crore in Q3 FY23 declined 24.2% YoY, as compared to Rs. 87.0 crore in Q3 FY22 • EBITDA margins contracted by 230 bps YoY, at 6.7% as compared to 9.0% in Q3 FY22 • Q3 FY23 PAT of Rs. 39.3 crore, decreased 27.1% YoY due to shift in revenue mix and higher other expenses
Robust cash flow generation and balance sheet
• CFO generation for 9M FY23 at Rs. 433.5 crore, improved significantly as compared to negative Rs. 83.5 crore for 9M FY22 on
account of reduction in inventory to normative levels as guided earlier
• ROE and ROCE at 15.0% and 17.0%, respectively over the last 12 months • Net cash of Rs. 339.6 crore on balance sheet as on 31st December 2022, as against Rs. 35.7 crore as on 31st December 2021
Based on Consolidated Financials
5
5
Acquisition of Sunflame Enterprises
6
•
•
•
In line with V-Guard's strategy to become a significant player in the domestic Kitchen Appliances segment, the company acquired 100% shareholding of Sunflame Enterprises Private Limited (SEPL) on January 12, 2023 for an aggregate consideration of Rs. 680.33 Crores.
Sunflame brand has a pan India presence with a strong brand recall. SEPL's wide portfolio, product integrated manufacturing development capabilities and the recently established state of-the-art facility provide the perfect opportunity for V-Guard to scale up its Kitchen Appliances business while also unlocking synergy benefits. SEPL offers a wide product portfolio including cooktops, chimneys, pressure cooker, mixer grinder and small kitchen appliances that caters to every consumer segment.
This acquisition is a very good strategic fit and offers multiple levers for unlocking significant synergies in areas like geography, product portfolio and channels.
P&L Snapshot
P&L Statement
Particulars
Net Revenue
COGS
Gross Margin
Q3 FY23
Q3 FY22
Change
Q2 FY23
9M FY23
9M FY22
Change
(Rs. Cr)
(Rs. Cr)
%
(Rs. Cr)
(Rs. Cr)
(Rs. Cr)
%
7
980.84
967.57
690.70
666.02
1.4%
3.7%
986.55
2,985.90
2,441.02
697.73
2,101.28
1,663.95
29.6%
31.2%
-1.6%
29.3%
29.6%
31.8%
EBITDA (excluding other income)
65.88
86.96
-24.2%
73.13
221.26
228.24
as a % to Net Revenue (NR)
Other Income (including finance income)
6.7%
6.03
9.0%
-2.3%
2.51
140.7%
7.4%
2.87
7.4%
13.81
9.4%
8.08
EBITDA including other income
71.91
89.47
-19.6%
76.01
235.06
236.33
as a % to NR
PBT
as a % to NR
PAT
as a % to NR
Based on Consolidated Financials
7.3%
9.2%
-1.9%
7.7%
7.9%
9.7%
52.84
74.18
-28.8%
59.16
183.67
193.98
5.4%
7.7%
-2.3%
6.0%
6.2%
7.9%
39.29
53.92
-27.1%
43.66
136.32
138.86
4.0%
5.6%
-1.6%
4.4%
4.6%
5.7%
22.3%
26.3%
-2.2%
-3.1%
-1.9%
70.8%
-0.5%
-1.8%
-5.3%
-1.8%
-1.8%
-1.1%
Financial Highlights (Q3 FY23 vs. Q3 FY22)
8
Total Income (Rs. crore)
Gross Profit
968
981
302
290
Key ratios (%)
Gross Margin
Q3 FY23
Q3 FY22
29.6%
31.2%
1.4%
-3.8%
EBITDA Margin (excl. other income)
Q3 FY22
Q3 FY23
Q3 FY22
Q3 FY23
Net Margin
EBITDA (Rs. crore)
PAT (Rs. crore)
87
54
66
39
-24.2%
-27.1%
Q3 FY22
Q3 FY23
Q3 FY22
Q3 FY23
Based on Consolidated Financials
Ad & Promotion Exp./ Total Revenues
Employee Cost/ Total Operating Income
Other Expenditure/ Total Operating Income
Tax rate
Diluted EPS (Rs.)
6.7%
4.0%
2.7%
7.9%
15.0%
25.7%
0.90
9.0%
5.6%
1.7%
7.8%
14.4%
27.3%
1.22
Financial Highlights (9M FY23 vs. 9M FY22)
9
Total Income (Rs. crore)
2,986
2,441
Gross Profit
885
777
22.3%
13.8%
9M FY22
9M FY23
9M FY22
9M FY23
EBITDA (Rs. crore) 228
221
PAT (Rs. crore) 139
136
-3.1%
-1.8%
9M FY22
9M FY23
9M FY22
9M FY23
Based on Consolidated Financials
Key ratios (%)
Gross Margin
9M FY23
9M FY22
29.6%
31.8%
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.)
7.4%
4.6%
2.3%
7.5%
14.8%
25.8%
3.13
9.4%
5.7%
1.8%
8.4%
14.1%
28.4%
3.18
Financial Highlights – Balance Sheet Perspective
10
Balance Sheet Snapshot (Rs. Cr)
31 December 2022
30 September 2022
31 December 2021
Net Worth
Gross Debt
Current Investments
Cash & Cash Equivalents (inc. bank balance)
Net Cash Position (Rs. crore)
Fixed Assets
1,503.3
1,460.4
1,311.0
116.7
325.5
130.8
339.6
416.2
10.0
100.6
69.5
160.1
401.2
10.0
0.0
45.7
35.7
354.4
Balance Sheet Snapshot (Rs. Cr)
31 December 2022
30 September 2022
31 December 2021
Debtor (days)*
Inventory (days)*
Creditor (days)*
Working Capital Turnover (days)
RoE* (%)
RoCE* (%)
34
92
56
70
15.0%
17.0%
34
105
50
89
16.4%
20.4%
38
134
71
101
17.1%
22.0%
Note: *Calculations are on a trailing twelve month basis
Based on Consolidated Financials
10
Segment-wise Breakup – Q3 FY23 vs. Q3 FY22
11
Segment Revenue
Electronics
Electricals
Consumer Durables
Grand Total
Segment Result
Electronics
Electricals
Consumer Durables
Grand Total
Q3 FY23 (Rs. Cr)
191.35
435.82
353.67
980.84
Q3 FY23
(Rs. Cr)
22.16
39.67
-4.47
57.37
Contribution (%)
19.5%
44.4%
36.1%
100.0%
Margin (%)
11.6%
9.1%
-1.3%
5.8%
Q3 FY22 (Rs. Cr)
199.91
429.23
338.43
967.57
Q3 FY22
(Rs. Cr)
33.76
35.53
9.58
78.87
Contribution (%)
YoY growth (%)
20.7%
44.4%
35.0%
100.0%
Margin (%)
16.9%
8.3%
2.8%
8.2%
-4.3%
1.5%
4.5%
1.4%
YoY growth
(%)
-34.4%
11.7%
-146.7%
-27.3%
Electronics – Stabilizers, UPS, Inverters Electricals – Wires, Pumps, Switchgears, Modular Switches Consumer Durables – Fans, Water Heaters, Kitchen Appliances, Air Coolers
Based on Consolidated Financials
Segment-wise Breakup – 9M FY23 vs. 9M FY22
12
Segment Revenue
Electronics Electricals
Consumer Durables
Grand Total
Segment Result
Electronics Electricals Consumer Durables Grand Total
9M FY23 (Rs. Cr) 722.27
1,273.53
990.10
2,985.90
9M FY23 (Rs. Cr) 98.33
90.82
9.03
198.18
Contribution (%)
24.2%
42.7%
33.2%
100.0%
Margin (%)
13.6%
7.1%
0.9%
6.6%
9M FY22 (Rs. Cr) 568.24
1,104.94
767.84
2,441.02
9M FY22 (Rs. Cr) 93.68
103.06
12.14
208.89
Contribution (%)
23.3%
45.3%
31.5%
100.0%
Margin (%)
16.5%
9.3%
1.6%
8.6%
YoY growth (%) 27.1%
15.3%
28.9%
22.3%
YoY growth (%) 5.0%
-11.9%
-25.6%
-5.1%
Electronics – Stabilizers, UPS, Inverters Electricals – Wires, Pumps, Switchgears, Modular Switches Consumer Durables – Fans, Water Heaters, Kitchen Appliances, Air Coolers
Based on Consolidated Financials
Geographical Breakup of Revenues
13
Region
South
Non-South
Total Revenue
Region
South
Non-South
Total Revenue
Q3 FY23
(Rs. Cr)
533.93
446.91
980.84
9M FY23
(Rs. Cr)
1,639.21
1,346.69
2,985.90
Contribution (%)
54.4%
45.6%
100%
Contribution (%)
54.9%
45.1%
100%
Q3 FY22
(Rs. Cr)
563.29
404.28
967.57
9M FY22
(Rs. Cr)
1,434.82
1,006.20
2,441.02
Contribution (%)
58.2%
41.8%
100%
Contribution (%)
58.8%
41.2%
100%
YoY growth
(%)
-5.2%
10.5%
1.4%
YoY growth
(%)
14.2%
33.8%
22.3%
Based on Consolidated Financials
Market Overview of V-Guard’s Product Portfolio
15
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
16
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
17
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