V-Guard Industries Limited has informed the Exchange about Investor Presentation
February 03, 2021
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 December 31, 2020.
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. □N:L31200KL1996PLC010010
P +91 484 433 5000, 200 5000 E mail@vguard.in W www.vguard.in
V-Guard Industries Q3 FY21 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
Managing Director’s Message
4
Commenting on the performance for Q3 FY21, Mr. Mithun Chittilappilly, Managing Director – V-Guard Industries Limited said, "V-Guard’s Q3 financial performance rebounded sharply, driven by a strong return of consumer demand after the disruptions witnessed in H1. The quarter saw very positive market sentiment during the festive season, reflected in significant growth reported across all markets and product categories. Some latent demand from earlier months, re-stocking of distribution channels and resumption of construction activities also enabled growth. Along with the spending momentum, we also resumed factory operations across locations, allowing the supply chain to function with normalized efficiency.
Higher topline growth was accompanied by substantial improvement in EBITDA margins. At the gross margin level, there was some impact from the recent increase in commodity prices and we will continue to take pricing actions as appropriate over the next few months. Despite that, expanding business volumes have resulted in better operating leverage and at Rs. 77 crore we have recorded the highest quarterly profit in our corporate history.
As we move into the fourth quarter, we see the positive momentum sustaining on the back a rapidly recovering macro environment. Underlying this expectation is the emergence of some structural trends that provide the platform for sustained growth in medium to long term. This includes resumption of stronger nominal GDP growth which has a high correlation to consumption trends, market share gains for organized players, greater urbanization/home ownership trends and efficient manufacturing/supply chain structures across the industry. At V-Guard, we have made strategic investments in brand visibility, product development, distribution networks, production infrastructure and human resources that position us favourably to participate in the unfolding growth opportunity to drive sustained value for our stakeholders.
Key Highlights – Q3 FY21
Revenue increased by 32% YoY in Q3 FY21
• Q3 FY21 revenue increased by 32% YoY to Rs. 827.4 crore • South and Non-South markets witnessed YoY growth of 25.3% and 43%, respectively • Non-South markets contributed to 41.2% of total revenue in Q3 FY21 as compared to 38.1% in Q3 FY20 • South markets contributed to 58.8% of total revenue in Q3 FY21 as compared to 61.9% in Q3 FY20
EBITDA and PAT improve
• Gross margins were marginally lower by 55 bps YoY mainly due to a sharp increase in commodity costs in the recent months • EBITDA margins (excl. other income) at 13.7% as compared to 9.5% in Q3 FY20 • Ad/promotional spends (exclusive of schemes) lower at 0.9% of revenues in Q3 FY21 as compared to 2.4% in Q3 FY20 • Q3 FY21 PAT of Rs. 77 crore, increased 79.6%; PAT margin at 9.3% as against 6.8% in Q3 FY20
Strong cash flow generation; robust balance sheet
• Strong CFO generation in 9M FY21 of Rs. 369.4 crore as compared to Rs. 259 crore in 9M FY20 • ROE and core ROCE at 14.4% and 31.8%, respectively (TTM basis) at the end of Q3 FY21 • Net cash of Rs. 482.3 crore on balance sheet as on 31st December, 2020, as against Rs. 323.3 crore in December, 2020
Note: Core ROCE is calculated on the basis of capital employed excluding cash
5
5
P&L Snapshot
P&L Statement Particulars
Net Revenue
COGS
Gross Margin
Q3 FY21 (Rs. Cr)
Q3 FY20 (Rs. Cr)
Change %
Q2 FY21 (Rs. Cr)
9M FY21 (Rs. Cr)
9M FY20 (Rs. Cr)
Change %
6
827.41
626.64
32.0%
616.66
1,849.91
1,945.34
557.28
418.58
33.1%
421.96
1,266.49
1,300.44
32.6%
33.2%
-0.6%
31.6%
31.5%
33.2%
EBITDA (excluding other income)
113.57
59.42
91.1%
73.93
196.56
208.11
as a % to Net Revenue (NR)
Other Income (including finance income)
EBITDA after other income
as a % to NR
PBT
as a % to NR
PAT
as a % to NR
13.7%
5.42
118.99
14.4%
108.44
13.1%
9.5%
5.44
64.86
10.4%
56.55
9.0%
4.2%
-0.5%
12.0%
6.63
10.6%
16.74
10.7%
18.80
-11.0%
83.4%
80.55
213.30
226.91
4.0%
13.1%
11.5%
11.7%
91.8%
71.15
184.38
203.04
4.1%
11.5%
10.0%
10.4%
-6.0%
-0.1%
-9.2%
-0.5%
77.02
42.88
79.6%
50.01
130.65
152.65
-14.4%
9.3%
6.8%
2.5%
8.1%
7.1%
7.8%
-0.8%
-4.9%
-2.6%
-1.6%
-5.5%
-0.1%
Financial Highlights (Q3 FY21 vs Q3 FY20)
7
Total Income (Rs. crore)
Gross Profit
827
627
270
208
Key ratios (%)
Gross Margin
32.0%
29.8%
EBITDA Margin (excl. other income)
Q3 FY20
Q3 FY21
Q3 FY20
Q3 FY21
Net Margin
EBITDA (Rs. crore)
PAT (Rs. crore)
Ad & Promotion Exp. (excl. schemes)/ Total Revenues
Employee Cost/ Total Operating Income
Q3 FY21 Q3 FY20
32.6%
33.2%
13.7%
9.3%
0.9%
7.6%
9.5%
6.8%
2.4%
9.3%
114
77
Other Expenditure/ Total Operating Income
11.3%
14.4%
59
43
91.1%
79.6%
Q3 FY20
Q3 FY21
Q3 FY20
Q3 FY21
Tax rate
Diluted EPS (Rs.)
29.0%
24.2%
1.78
0.99
Financial Highlights (9M FY21 vs. 9M FY20)
8
Total Income (Rs. crore)
1,945
1,850
Gross Profit
645
583
-4.9%
-9.5%
9M FY20
9M FY21
9M FY20
9M FY21
EBITDA (Rs. crore) 208
197
PAT (Rs. crore) 153
131
-5.5%
-14.4%
9M FY20
9M FY21
9M FY20
9M FY21
Key ratios (%)
Gross Margin
9M FY21
9M FY20
31.5%
33.2%
EBITDA Margin (excl other income)
10.6%
10.7%
Net Margin
Ad & Promotion Exp. (excl. schemes)/ Total Revenues
Employee Cost/ Total Operating Income
7.1%
0.8%
9.1%
7.8%
2.4%
8.4%
Other Expenditure/ Total Operating Income
11.9%
14.0%
Tax rate
Diluted EPS (Rs.)
29.1%
24.8%
3.02
3.53
Financial Highlights – Balance Sheet Perspective
9
Balance Sheet Snapshot (Rs. Cr)
31 December 2020
30 September 2020
31 December 2019
Net Worth
Gross Debt
Current Investments
Cash & Cash Equivalents (inc. bank balance)
Net Cash Position (Rs. crore)
Fixed Assets
1,133.0
10.0
0.0
492.3
482.3
337.5
1,050.2
10.0
0.0
462.7
452.7
334.6
1,008.7
10.0
179.9
153.3
323.2
313.4
Balance Sheet Snapshot (Rs. Cr)
31 December 2020
30 September 2020
31 December 2019
Debtor (days)* ^
Inventory (days)* ^
Creditor (days)* ^
Working Capital Turnover (days)
RoE* (%)
Core RoCE* (%)
42
101
94
48
14.4%
31.8%
31
96
74
53
12.3%
23.3%
52
67
61
58
21.0%
34.7%
Note: *Calculations are on a trailing twelve month basis
^ Include Q4 FY20 and Q1 FY21 – two abnormal quarters due to COVID-19; normalised numbers are: Debtor – 34, Inventory – 69 and Creditor – 65 days Core ROCE is calculated on the basis of capital employed excluding cash.
9
Segment-wise Breakup – Q3 FY21 vs. Q3 FY20
10
Segment Revenue
Electronics
Electricals
Consumer Durables
Grand Total
Segment Result
Electronics
Electricals
Consumer Durables
Grand Total
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 (%)
25.1%
43.0%
31.9%
100.0%
Margin (%)
24.7%
8.8%
10.0%
13.2%
Q3 FY20 (Rs. Cr)
153.8
270.9
202.0
626.6
Q3 FY20
(Rs. Cr)
24.4
20.8
11.3
56.6
Contribution (%)
24.5%
43.2%
32.2%
100.0%
Margin (%)
15.9%
7.7%
5.6%
9.0%
YoY growth (%)
34.9%
31.4%
30.8%
32.0%
YoY growth
(%)
109.6%
50.2%
133.5%
92.5%
Electronics – Stabilizers, UPS, Solar Inverter; Electricals – Wires, Pumps, Switchgears, Modular Switches; Consumer Durables – Fans, Water Heaters, Kitchen Appliances, Air Coolers
Segment-wise Breakup – 9M FY21 vs. 9M FY20
11
Segment Revenue
Electronics Electricals Consumer Durables Grand Total
Segment Result
Electronics Electricals Consumer Durables Grand Total
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%
9M FY20 (Rs. Cr) 604.2
810.8
530.3
1,945.3
9M FY20 (Rs. Cr) 102.4
62.1
36.4
200.9
Contribution (%)
31.1%
41.7%
27.3%
100.0%
Margin (%)
17.0%
7.7%
6.9%
10.3%
YoY growth (%) -14.6%
1.2%
-3.3%
-4.9%
YoY growth (%) -11.1%
2.2%
-13.9%
-7.5%
Electronics – Stabilizers, UPS, Solar Inverter; 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 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%
Q3 FY20 (Rs. Cr)
388.1
238.6
626.6
9M FY20 (Rs. Cr)
1,158.1
787.2
1,945.3
Contribution (%)
61.9%
38.1%
100%
Contribution (%)
59.5%
40.5%
100.0%
YoY growth (%)
25.3%
43.0%
32.0%
YoY growth (%)
-5.0%
-4.8%
-4.9%
About V-Guard Industries
13
V-Guard Industries Limited (BSE:532953, NSE: VGUARD) is a Kochi based company, incepted 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, Invertors & Digital UPS systems, Pumps, House wiring cables, Electric water heaters, Fans, Solar water heaters and has also recently forayed into Induction cooktops, switchgears, modular switches, air coolers and mixer grinders.
V-Guard outsources 60% 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 (Uttaranchal) and Kala Amb (Himachal Pradesh).
V-Guard has been a dominant player in the South market, though the last five 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 39% of total revenues in FY19. Significant investments continue to be made to expand its distributor base 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. Its client base differs from product to product and includes direct marketing agents, distributors and retailers. The Company today has a strong network of 31 branches spread across ~40,000+ retailers across the country.
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