VGUARD

May 19, 2022 The Manager, The Manager, Listing Department, Listing Department, BSE Limited, National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor, Plot No. C/1, Dalal Street, G Block, Bandra-Kurla Complex, Bandra- Mumbai-400 001 East, Mumbai-400 051 Ref: Scrip Code: 532953 Ref: Scrip Code: VGUARD Dear Sir & Madam, Sub : Submission of Investor presentation pursuant to Regulation 30 of SEBI Oisting Obligations and Disclosure Requirements) Regulation 2015. 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 Audited Financial Results of the Company for the quarter and year ended March 31, 2022. Kindly take the above information on record. Thanking you. For V-Guard Industries Limited Jayasree K Company Secretary V-GUARD INDUSTRIES LTD. Regd. office 42/962, P +91 484 433 5000, 200 5000 Vennala High School Road, E mail@vguard.in Vennala, Kochi -682 028. W www.vguard.in CIN: L31200KL1996PLC010010 V-Guard Industries Q4 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 04 Key Highlights 05 Financial Highlights 6-9 Segment-wise/Geographical Breakup of Revenues 10-12 Annexure 13-15 4 Managing Director’s Commenting on the performance for Q4 FY22, Mr. Mithun Chittilappilly, Managing Director – Message V-Guard Industries Limited said, “We are pleased to report a strong performance in the fourth quarter with quarterly revenues surpassing the milestone of Rs. 1,000 crore for the first time. Despite some challenges related to the third wave in the first few weeks of the quarter, we were able to effectively carry forward the momentum from the prior quarter and end the fiscal year on a strong note. We have set new benchmarks as revenues in both Q4 and Fiscal Year FY22 are the highest ever in our history. Electricals andConsumer Durables segments achieved strong growth, while Electronics showed a moderate growth. Across geographies we have witnessed balanced growthasbothSouthandNon-SouthMarkets havecontributedwell. Margin pressure continues in select categories due to commodity price inflation. In a competitive market, we have taken large price hikes across the portfolio over the last few quarters and will be taking further price actions wherever gaps still exist. In addition, we have instituted cost optimisation measures across our operations to supportandrestoremargins. During the year we had taken a conscious call to increase our inventory norms. With the risk of supply chain disruptions diminishing, we are now moving towards normative inventory levels. There has been some improvement inourworking capitalpositionas compared totheendof previous quarter.Webelievewearewellplaced to meet customer demand over the coming months and this will enable us to get back to normal inventory levels, resulting instrongercashflowsfromthebusiness. In February, 2022 we invested Rs. 15.17 crore in V-Guard Consumer Products (VCPL), our wholly owned subsidiary which has commissioned its first factory. The investments in VCPL will enable us to be more self-reliant in our operationsaswellashelpus togainlong-termcost efficiencies. As we enter a new fiscal year, V-Guard is well-positioned to benefit from the resilient customer demand given a widerproductportfolio,expanded nationalpresenceandinvestments incapacity augmentation.” Key Highlights – Q4 FY22 5 • Q4FY22revenueincreasedby23.7%YoYtoRs.1,050.3crore,with14%pricegrowthand9%volumegrowth Revenue increased by • SouthandNon-SouthmarketswitnessedYoYgrowthof25.4%and21.5%,respectively 23.7% YoY in Q4 FY22 • Non-Southmarketscontributedto42.9%oftotalrevenuesinQ4FY22ascomparedto43.7%inQ4FY21 • Fullyearrevenuesgrew28.7%fromRs.2,699croretoRs.3,475crore • Grossmarginscontractedby270bpsYoY,at28.7%inQ4FY22ashighcommoditycostscontinuetoimpactmargins Stable EBITDA and • Ad/promotionalspendsdecreased,at1.2%ofrevenuesinQ4FY22ascomparedto1.7%inQ4FY21 increase in PAT • EBITDAatRs.110.8croreinQ4FY22wasflatcomparedtoRs.109.9croreinQ4FY21 • EBITDAmarginscontractedby230bpsYoY,at10.6%ascomparedto12.9%inQ4FY21 • Q4FY22PATofRs.90.6crore,increased32.6%YoYasweswitchedtothenewtaxregime. • FullyearPATgrewby14%fromRs.199croretoRs.227crore Cash flow generation • CFO generation in FY22 was negative at Rs. 34.3 crore as higher inventory was maintained to overcome possible supply disruptions and • ROE and ROCE at 16.2% and 20.3% respectively for the year ended 31stMarch 2022 balance sheet • Net cash of Rs. 43.9 crore on balance sheet as on 31stMarch 2022, as against Rs. 271.1 crore as on 31stMarch 2021 on account of higher working capital and investments in subsidiary 5 P&L Snapshot 6 P&L Statement Q4 FY22 Q4 FY21 Change Q3 FY22 FY22 FY21 Change Particulars (Rs. Cr) (Rs. Cr) % (Rs. Cr) (Rs. Cr) (Rs. Cr) % Net Revenue 1,050.27 849.10 23.7% 960.70 3,474.66 2,699.00 28.7% COGS 748.37 582.24 28.5% 666.37 2,413.95 1,848.73 30.6% Gross Margin 28.7% 31.4% -2.7% 30.6% 30.5% 31.5% -1.0% EBITDA (excluding other income) 110.82 109.93 0.8% 84.40 332.14 306.49 8.4% as a % to Net Revenue (NR) 10.6% 12.9% -2.3% 8.8% 9.6% 11.4% -1.8% Other Income (including finance income) 3.30 4.36 -24.2% 2.93 12.93 21.10 -38.7% EBITDA including other income 114.13 114.29 -0.1% 87.33 345.07 327.59 5.3% as a % to NR 10.9% 13.5% -2.6% 9.1% 9.9% 12.1% -2.2% PBT 100.24 100.29 0.0% 72.46 290.05 284.67 1.9% as a % to NR 9.5% 11.8% -2.3% 7.5% 8.3% 10.5% -2.2% PAT 90.60 68.34 32.6% 52.50 226.80 198.98 14.0% as a % to NR 8.6% 8.0% 0.6% 5.5% 6.5% 7.4% -0.8% Financial Highlights (Q4 FY22 vs. Q4 FY21) 7 Total Income (Rs. crore) Gross Profit 302 1,050 267 849 Key ratios (%) Q4 FY22 Q4 FY21 GrossMargin 28.7% 31.4% 23.7% 13.1% EBITDA Margin (excl. other income) 10.6% 12.9% Q4 FY21 Q4 FY22 Q4 FY21 Q4 FY22 Net Margin 8.6% 8.0% Ad & Promotion Exp./ Total Revenues 1.2% 1.7% EBITDA (Rs. crore) PAT (Rs. crore) Employee Cost/ Total Operating Income 6.1% 6.7% 91 110 111 Other Expenditure/ Total Operating Income 12.1% 11.8% 68 Tax rate 9.6% 31.9% Diluted EPS (Rs.) 2.09 1.58 0.8% 32.6% Q4 FY21 Q4 FY22 Q4 FY21 Q4 FY22 Financial Highlights (FY22 vs. FY21) 8 Total Income (Rs. crore) Gross Profit 3,475 1,061 2,699 850 Key ratios (%) FY22 FY21 GrossMargin 30.5% 31.5% EBITDA Margin (excl other income) 9.6% 11.4% 28.7% 24.7% Net Margin 6.5% 7.4% FY21 FY22 FY21 FY22 Ad & Promotion Exp./ Total Revenues 1.6% 1.0% EBITDA (Rs. crore) PAT (Rs. crore) Employee Cost/ Total Operating Income 7.7% 8.3% 332 227 307 199 Other Expenditure/ Total Operating Income 13.3% 11.8% Tax rate 21.8% 30.1% Diluted EPS (Rs.) 5.23 4.61 8.4% 14.0% FY21 FY22 FY21 FY22 Financial Highlights – Balance Sheet Perspective 9 Balance Sheet Snapshot (Rs. Cr) 31 March 2022 31 December 2021 31 March 2021 Net Worth 1,402.5 1,305.7 1,207.8 Gross Debt 10.0 10.0 10.0 Cash & Cash Equivalents (inc.bank balance) 53.9 35.8 281.1 Net Cash Position (Rs. crore) 43.9 25.8 271.1 Fixed Assets 416.5 402.3 373.3 Balance Sheet Snapshot (Rs. Cr) 31 March 2022 31 December 2021 31 March 2021 Debtor(days)* 50 40 52 Inventory (days)* 129 142 124 Creditor(days)* 73 81 93 Working Capital Turnover (days) 106 102 83 RoE* (%) 16.2% 15.7% 16.5% RoCE* (%) 20.3% 21.7% 22.2% Note: *Calculations are on a trailing twelve month basis 9 Segment-wise Breakup – Q4 FY22 vs. Q4 FY21 10 Q4 FY22 Q4 FY21 YoY growth Segment Revenue Contribution (%) Contribution (%) (Rs. Cr) (Rs. Cr) (%) Electronics 247.1 23.5% 242.8 28.6% 1.8% Electricals 507.3 48.3% 382.7 45.1% 32.6% Consumer Durables 295.9 28.2% 223.7 26.3% 32.3% Grand Total 1,050.3 100.0% 849.1 100.0% 23.7% Q4 FY22 Q4 FY21 YoY growth Segment Result Margin (%) Margin (%) (Rs. Cr) (Rs. Cr) (%) Electronics 44.2 17.9% 53.1 21.9% -16.8% Electricals 54.5 10.7% 43.0 11.2% 26.7% Consumer Durables 5.0 1.7% 8.9 4.0% -44.4% Grand Total 103.6 9.9% 105.0 12.4% -1.3% Electronics –Stabilizers, UPS, Inverters Electricals –Wires, Pumps, Switchgears, Modular Switches Consumer Durables –Fans, Water Heaters, Kitchen Appliances, Air Coolers Segment-wise Breakup – FY22 vs FY21 11 FY22 FY21 YoY growth Segment Revenue Contribution (%) Contribution (%) (Rs. Cr) (Rs. Cr) (%) Electronics 815.1 23.5% 758.9 28.1% 7.4% Electricals 1,596.2 45.9% 1,203.5 44.6% 32.6% Consumer Durables 1,063.4 30.6% 736.7 27.3% 44.4% Grand Total 3,474.7 100.0% 2,699.0 100.0% 28.7% FY22 FY21 YoY growth Segment Result Margin (%) Margin (%) (Rs. Cr) (Rs. Cr) (%) Electronics 139.0 17.1% 144.2 19.0% -3.6% Electricals 152.1 9.5% 106.5 8.8% 42.8% Consumer Durables 17.1 1.6% 40.3 5.5% -57.5% Grand Total 308.2 8.9% 290.9 10.8% 5.9% Electronics –Stabilizers, UPS, Inverters Electricals –Wires, Pumps, Switchgears, Modular Switches Consumer Durables –Fans, Water Heaters, Kitchen Appliances, Air Coolers Geographical Breakup of Revenues 12 Q4 FY22 Q4 FY21 YoY growth Region Contribution (%) Contribution (%) (Rs. Cr) (Rs. Cr) (%) South 599.2 57.1% 477.9 56.3% 25.4% Non-South 451.1 42.9% 371.1 43.7% 21.5% Total Revenue 1,050.3 100% 849.1 100% 23.7% FY22 FY21 YoY growth Region Contribution (%) Contribution (%) (Rs. Cr) (Rs. Cr) (%) South 2,024.3 58.3% 1,578.3 58.5% 28.3% Non-South 1,450.4 41.7% 1,120.7 41.5% 29.4% Total Revenue 3,474.7 100.0% 2,699.0 100.0% 28.7% Market Overview of V-Guard’s Product Portfolio 14 Total Market Size Indicative Org. Industry Growth VG Share in Electronics Product Key Players (Rs. Crs.) Market Size (%) Rate (%) Org. Market (%) Microtek, Livguard, Stabilizers 1,700-1,800 55-60% 7-8% 42-45% Bluebird Luminous, Microtek, DUPS & Battery 11,500 -12,000 65-70% 8-10% 4-6% Exide Total Market Size Indicative Org. Industry Growth VG Share in Electricals Product Key Players (Rs. Crs.) Market Size (%) Rate (%) Org. Market (%) Polycab, Finolex, House Wiring Cables 16,500 -17,000 62-65% 8-10% 6-8% Havells Havells, Legrand, Switchgears* 3,000-3,500 75-80% 8-10% 3-5% Schneider Anchor, Legrand, Modular Switches 6,000-6,500 70-75% 8-10% ** Havells Crompton, Pumps* 3,000-3,500 60-65% 5-8% 8-10% 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 Total Market Size Indicative Org. Industry Growth VG Share in Appliances Product Key Players (Rs. Crs.) Market Size (%) Rate (%) Org. Market (%) Water Heaters 2,500-2,600 65-70% 10-12% 14-16% Havells, Bajaj, Crompton, Racold Crompton, Usha, Havells, Orient Electric Fans 9,200-9,500 75-80% 8-10% 3-5% 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 Mixer Grinders -Bajaj, Preethi, Kitchen Appliances- Prestige • Mixer Grinders Gas Stoves -Stovekraft, Sunflame, • Gas Stoves 12,000-14,000 65-75% 8-10% ** Butterfly • Water Purifiers Water Purifiers -Eureka Forbes, • Other Small Kitchen Kent RO, HUL Pureit Appliances# 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 16 V-Guard Industries Limited (BSE:532953,NSE:VGUARD) is a Kochibased 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, For further information, please contact: Pumps, House wiring cables, Switch gears, Modular switches, Electric water heaters, Fans,Solarwater heaters,Aircoolersand variousKitchen appliances. SudarshanKasturi(SeniorVP&CFO) V-Guard outsources ~ 50% of its product profile while the rest are manufactured in V-GuardIndustriesLimited – house while keeping a strong control in designs and quality. It has manufacturing facilities at Coimbatore (Tamil Nadu), Kashipur & Roorkee (Uttarakhand), Kala Amb Tel:+91 484300 5601 (Himachal Pradesh)and Sikkim. Email:sudarshan.kasturi@vguard.in 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 Mayank Vaswani / Shruti Joshi total revenues in FY21. Significant investments continue to be made to expand its CDR India outlet coverage in the non-South geographies and become a dominant pan-India player. Tel: +91 982 094 0953 / +91 750 656 7349 V-Guard has a diversified client base and an extensive marketing & distribution Email: mayank@cdr-india.com / shruti@cdr-india.com network. Its client base differs from product to product and includes direct marketing agents, distributors and retailers. The Company today has a strong network of31 branches which cover ~40,000+retailers acrossthe country.