Mehabe score: 6 G Factor: 4 Piotski Score: 5 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 5.
Description
Founded in 1977, V-Guard Industries Ltd. (‘V-Guard’) is a reputed Indian company manufacturing innovative and experiential products in the categories of Electronics, Electricals and Consumer Durables. It has grown from being a brand synonymous with voltage stabilizers across South India, to a brand offering a wide array of thoughtfully engineered products to consumers across the length and breadth of the country. Underpinned by its continuous quest to enrich consumer lives and power a stronger tomorrow.
Main Points
Increasing share of In-House Manufacturing
Company manufactures its products in-house as well as outsources them. The company is steadily migrating from outsourcing to in-house manufacturing to derive cost competitiveness, enable innovation and build an agile supply chain. # Currently, in-house manufacturing stands at 45% of production while the rest 55% of the manufacturing is outsourced.
It’s manufacturing facilities are located in various parts of Tamil Nadu, Uttarakhand, Himachal Pradesh and Sikkim.Site:VGUARDMain Symbol:VGUARD
Stock trades at 259.0, above its 50dma 255.23. It also trades above its 200dma 226.62. The stock remains bullish on techicals
The 52 week high is at 285.00 and the 52week low is at 159.35
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 22.46%
Weakness
– Stock is trading at 9.24 times its book value
-Promoter holding has decreased over last quarter: -5.33%
-The company has delivered a poor sales growth of 7.91% over past five years.
Competition
– The industry trades at a mean P/E of 29.3x. A B B trades at the industry’s max P/E of 157.48x. VGUARD trades at a P/E of 56.1x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 7.0. VGUARD has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is -0.9%. The max 1- month return was given by Crompton Gr. Con: a return of 7.06 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 849.0 cr compared to Rs 537.0 cr for period ended Mar 2020, a rise of 58.1%
Operating Profits reported at Rs 110.0 cr for period ended Mar 2021 vis-vis 45.0 for period ended Mar 2020 .
Operating Margins expanded 457.7 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.59 compared to Rs 1.79 for previous quarter ended Dec 2020 and Rs 0.76 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2699.0 cr for period ended Mar 2021 vis-vis sales of Rs 2482.0 cr for the period ended Mar 2020, a growth of 8.0%. The 3 year sales cagr stood at 5.3%.
Operating margins expanded to 11.0% for period ended Mar 2021 vis-vis 10.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 199.0 cr for period ended Mar 2021 vis-vis sales of Rs 185.0 cr for the period ended Mar 2020, rising 7.0%.
Company recorded a healthy Net Profit CAGR of 14.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 222.0 cr for period ended Mar 2021 vis-vis Rs 139.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 18.0% compared to 19.0% over the last 3 Years. – The stock has given a return of 52% on a 1 Year basis vis-vis a return of 11% over the last 3 Years. – The compounded sales growth on a TTM bassis is 9% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is 7% vis-vis a compounded profit growth of 14% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 14.87% vis-vis 13.01% for Dec 2020 – Public shareholding has risen for the period ended Mar 2021. The Mar 2021 public holding stood at 14.05% vis-vis 11.24% for Dec 2020
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 22.46% – Stock is trading at 9.24 times its book value
-Promoter holding has decreased over last quarter: -5.33%
-The company has delivered a poor sales growth of 7.91% over past five years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 255.23 and is trading at 259.0, thus bullish price action wise.
