V-Guard Industries (532953) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 saw consolidated net revenue rise 3.6% YoY to ₹1,340.92 crore, with PAT up 3% YoY to ₹65.29 crore, despite headwinds from high rainfall, weak demand, and GST transition.

• Electronics led segment growth at 5.3% YoY, followed by Electricals at 4.7% and Consumer Durables at 1%; all segments reported positive growth.

• South markets grew 4.3% YoY, non-South markets 2.8% YoY; gross margin improved to 37.6%.

• The Sunflame merger is progressing, with in-principle approval from the Board and expected operational synergies.

• 345,853 equity shares were allotted to employees under ESOS 2013.

Financial highlights

• Q2 FY26 revenue increased 3.6% YoY to ₹1,340.92 crore; PAT rose 3% YoY to ₹65.29 crore.

• Gross margin expanded by 140 bps YoY to 37.6%; EBITDA margin declined to 8.1% from 8.5% YoY.

• H1 FY26 net revenue grew 1.3% YoY to ₹2,807 crore; PAT for H1 FY26 was ₹139.14 crore, down 14.3% YoY.

• Net cash position as of 30 September 2025 was ₹92.78 crore, up from ₹4.26 crore a year earlier.

• Standalone Q2 FY26 net profit was ₹65.97 crore, up from ₹52.19 crore in Q2 FY25.

Outlook and guidance

• Achieving the initial 15% annual growth target is unlikely due to a high base and challenging H1; updated guidance will be provided after Q3.

• Management expects demand improvement in coming quarters, supported by GST reforms and anticipated consumption boost.

• Hopes for improved demand in H2, especially for water heaters and winter products.

• Consumer durables margin expected to rise to 5–6% in 2–3 years from current 1%.

• FY2027 EBITDA margin expected at 9.5–10%.