Sharekhan has given Buy recommendation for V-Guard Industries with a target price of Rs. 280 in its research report issued on May 20, 2022
Sharekhan’s research report on V-Guard Industries
V-Guard Industries Ltd’s (VGIL’s) standalone performance bettered estimates on all fronts, with strong growth in the Electricals (~33%) and Consumer Durables (32%) segments. However, margins stayed stressed across segments owing to a steep rise in commodity cost. Management is optimistic about good demand given a wider product portfolio, expanded national presence and investments in capacity augmentation (cables and fans). Further, inventory levels and cash flows should normalize in near to medium term. Company expects OPM to improve and revert to ~10% levels given price hikes, resilient consumer demand, cooling off of commodity prices and increase in in-house manufacturing.
We retain a Buy on VGIL with an unchanged PT of Rs. 280, given strong Q4 and promising long-term growth outlook.