Please refer to important disclosures at the end of this report
1
V-Guard Industries Limited (V-Guard) is an India-based company engaged in
manufacturing, trading and selling of electronic products. V-Guard has been a
dominant player in the southern markets and continues to make significant
investments to increase its distribution network across the country with an aim to
become a pan-India player. The management has plans to launch new model
‘Verano’ in southern market in current season and will be launched pan-India in
FY18 and hence is expected to contribute meaningfully in FY18. Market share
gains in new product categories (switchgear and kitchen appliances) as the
company scales up the portfolio with new campaigns and attractive models. The
management attributed gross margin improvement to various supply chain
initiatives such as consolidation of purchases across divisions, value engineering
activities, realigning of vendors, better demand-supply planning and use o
f
alternative suppliers coupled with soft raw material prices. V-Guard due to its
consistent dealer expansion in non-south market, Regular new launches and
healthy RoCE of 30% show all positives. Better consumer sentiment particularl
y
during the festive season, pick-up in construction activity (for the largest cables &
wires segment), cost cutting measures for margin expansion and focus on
reducing working capital would help drive the performance for V-Guard. The
company has reduced its debt and is almost debt free. The company has
reported steady profit of 22.75% CAGR over the last 5 years and healthy RoE o
f
20%+ in the last 3 years. Hence Buy.
BUY
CMP `174
Stock Info
Sector
Beta 0.6
Bloomberg Code
Shareholding Pattern (%)
Promoters 65.5
MF / Banks / Indian Fls 15.6
FII / NRIs / OCBs 13.5
Indian Public / Others 9.0
Abs. (%) 3m 1yr 3yr
Sensex (7.0) 2.5 25.4
V-Guard Inds. (0.9) 98.1 265.5
Reuters Code VGUA.BO
1
BSE Sensex 26,150
Nifty 8,074
Face Value (
`
)
Capital Goods
Market Cap (
`
cr) 5,261
52 Week High / Low 226/79
Avg. Daily Volume 32,282
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
V
-Guard Industries
Others | Capital Goods
November 21, 2016
V-Guard Industries | Capital Goods
November 21, 2016
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement V-Guard Industries
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)