V-Guard Industries Limited has informed the Exchange about Investor Presentation
October 28, 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 and half year ended September 30, 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 Q2 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 Q2 FY22, Mr. Mithun Chittilappilly, Managing Director – V-Guard Industries Limited said, “During the second quarter, we have executed well to pick up further on the growth momentum seen in Q1 to post the highest ever quarterly turnover. Our top-line grew 46%, of which price growth contributed 20%. Our performance was driven by improving consumer demand across markets as the economy continued to open following the second-wave lockdowns in the months of April and May. We see the key theme of growing customer preference for quality, innovation and service driven products remaining intact as India reverts to normalized growth rates.
Q2 growth was broad-based with positive contribution coming from each product and geographical segment. However, the sharp increase in input costs has had some impact on gross margins. While we have taken pricing actions to offset a major part of the cost inflation, some more actions will follow in the ensuing months. Operating costs have also risen on a year-on-year basis. Here, it is important to note that in the corresponding quarter last year, there was a write back of ESOP-related costs and variable pay. Also, with the company operating in regular mode across most of the country, the cost base has increased in line with volumes. We also increased A&P spending that had previously remained subdued during the lockdown period.
During H1, there has been an increase in working capital as we maintained higher inventory levels to mitigate supply chain risks. Further, receivables are now back to normal levels with Q2 closing at 41 days’ revenues. We have now capitalized our subsidiary, V-Guard Consumer Products that will focus on expanding our in-house manufacturing set-up, thereby reducing reliance on imports and create higher efficiencies.
Going forward, we look forward to maintaining the momentum to drive revenue growth and margin expansion. We remain confident that the strength of our brand, distribution and products would allow constant traction and drive stakeholder value expansion.”
Key Highlights – Q2 FY22
Revenue increased by 46.4% YoY in Q2 FY22
• Q2 FY22 revenue increased by 46.4% YoY to Rs. 902.9 crore as markets recovered from the covid impact in Q1 • South and Non-South markets witnessed YoY growth of 44.9% and 48.8%, respectively • Non-South markets contributed to 39.4% of total revenue in Q2 FY22, up from 38.8% in Q2 FY21
EBITDA and PAT improve
• Gross margins contracted by 64 bps YoY, at 30.9% in Q2 FY22 based on raw material cost inflation • Ad/promotional spends (exclusive of schemes) increased, at 1.5% of revenues in Q2 FY22 as compared to 0.5% in Q2 FY21 • Q2 FY22 PAT of Rs. 59.1 crore, increased 18.1% YoY; PAT margin at 6.5% as against 8.1% in Q2 FY21 • EBITDA increased to Rs. 93.6 crore in Q2 FY22 from Rs. 73.9 crore, up by 26.5% • EBITDA margins at 10.4% as compared to 12.0% in Q2 FY21
Cash flow generation and
balance sheet
• CFO generation in H1 FY22 was at Rs. 26.2 crore on account of higher working capital, as debtor levels reverted to normal and higher
inventory was maintained to address recent supply chain issues
• ROE and Core ROCE at 18.3% and 37.1% respectively for the trailing 12 months ended 30th September 2021 • Net cash of Rs. 184.9 crore on balance sheet as on 30th September 2021, as against Rs. 452.7 crore as on 30th September 2020
Note: Core ROCE is calculated on the basis of capital employed excluding cash
5
5
Q2 FY22 (Rs. Cr)
Q2 FY21 (Rs. Cr)
Change %
Q1 FY22 (Rs. Cr)
H1 FY22 (Rs. Cr)
H1 FY21 (Rs. Cr)
Change %
6
P&L Snapshot
P&L Statement Particulars
Net Revenue
COGS
Gross Margin
EBITDA (excluding other income)
as a % to Net Revenue (NR)
902.96
616.66
623.65
421.96
30.9%
31.6%
93.55
73.93
10.4%
12.0%
46.4%
47.8%
-0.6%
26.5%
-1.6%
Other Income (including finance income)
EBITDA including other income
2.73
96.28
6.63
-58.8%
80.55
as a % to NR
PBT
as a % to NR
PAT
as a % to NR
10.7%
13.1%
82.44
9.1%
59.06
6.5%
71.15
11.5%
50.01
8.1%
19.5%
-2.4%
15.9%
-2.4%
18.1%
-1.6%
560.72
1,463.69
1,022.49
375.57
999.22
709.22
33.0%
31.7%
30.6%
43.1%
40.9%
1.1%
43.36
136.92
82.99
65.0%
7.7%
3.97
9.4%
6.70
47.33
143.61
8.4%
9.8%
8.1%
11.32
94.31
9.2%
1.2%
-40.8%
52.3%
0.6%
34.91
117.35
75.94
54.5%
6.2%
24.63
4.4%
8.0%
83.69
5.7%
7.4%
0.6%
53.63
56.0%
5.2%
0.5%
Financial Highlights (Q2 FY22 vs. Q2 FY21)
7
Total Income (Rs. crore)
903
Gross Profit
279
617
195
Key ratios (%)
Gross Margin
46.4%
43.5%
EBITDA Margin (excl. other income)
Q2 FY21
Q2 FY22
Q2 FY21
Q2 FY22
Net Margin
EBITDA (Rs. crore) 94
74
PAT (Rs. crore)
50
59
26.5%
18.1%
Q2 FY21
Q2 FY22
Q2 FY21
Q2 FY22
Ad & Promotion Exp. (excl. schemes)/ Total Revenues
Employee Cost/ Total Operating Income
Other Expenditure/ Total Operating Income
Tax rate
Diluted EPS (Rs.)
Q2 FY22
Q2 FY21
30.9%
10.4%
6.5%
1.5%
7.8%
12.7%
28.4%
1.36
31.6%
12.0%
8.1%
0.5%
8.1%
11.4%
29.7%
1.16
Financial Highlights (H1 FY22 vs H1 FY21)
8
Total Income (Rs. crore)
1,464
Gross Profit
465
1023
313
43.1%
48.3%
H1 FY21
H1 FY22
H1 FY21
H1 FY22
EBITDA (Rs. crore)
137
83
PAT (Rs. crore) 84
Key ratios (%)
Gross Margin
H1 FY22
H1 FY21
31.7%
30.6%
EBITDA Margin (excl other income)
Net Margin
Ad & Promotion Exp. (excl. schemes)/ Total Revenues
Employee Cost/ Total Operating Income
9.4%
5.7%
1.9%
8.8%
13.6%
28.7%
1.93
8.1%
5.2%
0.6%
10.3%
12.3%
29.4%
1.24
54
Other Expenditure/ Total Operating Income
65.0%
56.0%
H1 FY21
H1 FY22
H1 FY21
H1 FY22
Tax rate
Diluted EPS (Rs.)
Financial Highlights – Balance Sheet Perspective
Balance Sheet Snapshot (Rs. Cr)
30 September 2021
30 June 2021
30 September 2020
Net Worth
Gross Debt
Current Investments
Cash & Cash Equivalents (inc. bank balance)
Net Cash Position (Rs. crore)
Fixed Assets
1249.0
10
5.02
189.9
184.9
391.3
1,236.1
10
0.0
164.0
154.0
379.1
1050.2
10.0
0.0
462.7
452.7
334.6
Balance Sheet Snapshot (Rs. Cr)
30 September 2021
30 June 2021
30 September 2020
Debtor (days)*
Inventory (days)*
Creditor (days)*
Working Capital Turnover (days)
RoE* (%)
Core RoCE* (%)
41
125
81
84
18.3%
37.1%
35
123
52
106
17.8%
28.4%
31
96
74
53
12.3%
23.3%
Note: *Calculations are on a trailing twelve month basis
Core ROCE is calculated on the basis of capital employed excluding cash.
9
9
Segment-wise Breakup – Q2 FY22 vs. Q2 FY21
10
Segment Revenue
Electronics
Electricals
Consumer Durables Grand Total
Segment Result
Electronics
Electricals
Consumer Durables Grand Total
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 (%)
23.2%
45.9%
30.9%
100.0%
Margin (%)
19.1%
9.8%
3.0%
9.9%
Q2 FY21
(Rs. Cr)
171.0
282.3
163.4
616.7
Q2 FY21
(Rs. Cr)
30.6
26.6
13.6
70.8
Contribution (%)
27.7%
45.8%
26.5%
100.0%
Margin (%)
17.9%
9.4%
8.3%
11.5%
YoY growth
(%)
22.3%
46.8%
71.0%
46.4%
YoY growth
(%)
31.1%
51.9%
-37.8%
25.7%
Electronics – Stabilizers, UPS, Inverters Electricals – Wires, Pumps, Switchgears, Modular Switches Consumer Durables – Fans, Water Heaters, Kitchen Appliances, Air Coolers
Segment-wise Breakup – H1 FY22 vs H1 FY21
11
Segment Revenue
Electronics Electricals
Consumer Durables
Grand Total
Segment Result
Electronics Electricals Consumer Durables Grand Total
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%
H1 FY21 (Rs. Cr) 308.7
465.0
248.9
1,022.5
H1 FY21 (Rs. Cr) 39.9
32.2
4.9 77.0
Contribution (%)
30.2%
45.5%
24.3%
100.0%
Margin (%)
12.9%
6.9%
2.0% 7.5%
YoY growth (%) 19.3%
43.3%
72.4%
43.1%
YoY growth (%) 52.3%
99.4%
-47.8% 65.6%
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 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%
Q2 FY21
(Rs. Cr)
377.6
239.0 616.7
H1 FY21
(Rs. Cr)
614.1
408.4 1,022.5
Contribution (%)
61.2%
38.8% 100%
Contribution (%)
60.1%
39.9% 100.0%
YoY growth
(%)
44.9%
48.8% 46.4%
YoY growth
(%)
41.0%
46.4% 43.1%
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 to product and includes direct network. 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