V-Guard Industries (532953) Q1 24/25 earnings summary

Executive summary

• Consolidated net revenue for Q1 FY25 reached INR 1,477 crore, up 21.6% year-over-year, driven by strong demand in Electronics and Consumer Durables, especially summer products.

• Non-South markets contributed over 50% of total revenues, growing 29.5% YoY, outpacing South markets at 17.3% YoY.

• Gross margins improved to 36.3%, up 380 bps YoY, aided by pricing actions, input cost softness, and better product mix.

• Consolidated net profit for Q1 FY25 was INR 98.97 crore, up 54.1% YoY.

• Segment reporting updated to reflect changes in internal allocation of corporate function costs, with Sunflame and Superflame included as a separate segment.

Financial highlights

• Q1 FY25 revenue rose 21.6% YoY to INR 1,477.10 crore; EBITDA grew 48.7% YoY to INR 155.77 crore; PAT increased 54.1% YoY to INR 98.97 crore.

• Gross margin expanded by 380 bps YoY to 36.3%; EBITDA margin improved by 190 bps YoY to 10.5%.

• Cash flow from operations was INR 370.58 crore, up from INR 210.94 crore YoY; net cash position at INR 136.48 crore as of June 30, 2024.

• ROE and ROCE stood at 15.2% and 17.7% respectively over the last 12 months.

• Working capital turnover improved to 49 days from 70 days YoY.

Outlook and guidance

• Revenue growth is expected at 13%-15% for FY25, with EBITDA margins projected to hover around 9%-10%.

• Margin improvement is anticipated to continue, supported by manufacturing, premiumization, and scale benefits.

• Management remains optimistic for the coming quarters, citing a strong start and ongoing cost and pricing initiatives.

• Kitchen segment demand remains soft, but Q2 and Q3 are expected to be stronger due to seasonality.