Dolat Capital: V-Guard Reports Weak Quarter As Expected
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Dolat Capital Report
V-Guard Industries Ltd.’s sales declined 42% at Rs 4 billion, while Ebitda was down 87% at Rs 91 million. Ebitda margins were down 794 basis points YoY at 2.2, while profit after tax was down 93% at Rs 36 million.
There was all round decline in revenues in the range of 30-51% across its segments coupled with Ebit margin declines.
While there was an Ebit level loss in consumer durables, Ebit was sharply down in electronics too reflecting a bad quarter in stabilizers, on back of likely poor sales of summer products.
However, the gross margins have improved gradually over the quarter with June being the best month. During May and June, revenues were 70% and 90% respectively, of the corresponding two months of the previous year, similar to what industry peer Crompton Greaves Consumer Electricals Ltd.did.
This weak results has led to trailing twelve months return on equity and return on capital employed have declined to 13.6% and 16.1%, down 500 basis points and 640 basis points YoY respectively.
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