V-Guard Industries (532953) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 consolidated net revenues reached INR 1,294 crore, up 14.1% year-over-year, with all segments achieving double-digit topline growth despite challenging weather conditions.

• Electronics led segment growth at 18.8% YoY, followed by Electricals at 16.3% and Consumer Durables at 10.6%; Sunflame reported a 1.1% YoY decline.

• Non-South markets grew 16.9% YoY, now contributing 44.5% of total revenues; South India grew 13.6% YoY.

• Gross margin improved by 200 bps YoY to 35.8%, aided by higher in-house manufacturing, stable commodity prices, and a shift to premium products.

• Working capital efficiency and strong cash generation supported further debt repayment.

Financial highlights

• Q2 FY25 revenue was INR 1,293.99 crore (+14.1% YoY); H1 FY25 revenue was INR 2,771.09 crore (+18.0% YoY).

• Q2 FY25 EBITDA was INR 110.26 crore (+19.2% YoY), margin at 8.5% (+30 bps YoY); PAT was INR 63.39 crore (+7.5% YoY).

• Gross margin for Q2 FY25 at 35.8% (+200 bps YoY); H1 FY25 gross margin at 36.1% (+300 bps YoY).

• Diluted EPS for Q2 FY25 at INR 1.44 (vs. INR 1.34 YoY); H1 FY25 at INR 3.70 (vs. INR 2.81 YoY).

• Net cash position as of 30th September 2024: INR 4.26 crore, compared to net debt of INR 158.96 crore a year ago.

Outlook and guidance

• Management expects to maintain growth momentum and deliver strong performance in the second half of the year.

• Electronics category projected to grow 12%-14% annually, with solar products expected to become a larger contributor.

• Sunflame and Gegadyne kitchen businesses are expected to remain flat this year due to industry headwinds.

• Ongoing investments in product innovation and market expansion.