V-Guard reports 38% y-o-y revenue growth in June quarter despite lockdown impact

Kochi-headquarter electrical appliances maker V-Guard has reported revenue growth of Rs 565.2 crore for the quarter ending June 30, 2021. The company’s revenue grew by 38 per cent year-on-year for its first quarter for the financial year 2021-22. The revenue for the said quarter for the previous year stood at Rs 408 crore. Of the various businesses, electrical and durables segments performed the best for the company.

 

According to the company filing, the consolidated Profit After Tax for the quarter ended June 30 was Rs 25.5 crore, a growth of 602 per cent over the corresponding period of the previous year, which was Rs 3.6 crore. The company’s gross margin improved by 3.8 per cent compared to Q1 FY 2020-21

 

“The second wave of Covid-19 was more severe and our stronger markets went through extended closures, impacting consumer demand. Our manufacturing units in Sikkim were also impacted due to lockdowns. In the context of demand constraints, our electricals and durables segments have performed well. Commodity cost inflation has been significant in the recent months,” says Mithun K Chittilappilly, Managing Director, V-Guard.

 

During the current quarter, V-Guard’s operations were impacted due to the regional lockdowns because of the second wave of the COVID-19 pandemic. However, V-Guard was able to offset a major part of the setback impact caused due to the second wave of lockdown, the company is undertaking and planning some more pricing actions. “We expect the business to bounce back strongly in the coming quarters,” adds Chittilappilly.

 

V-Guard’s performance was based on an analysis of various performance indicators by business segments. The company’s management has identified three business segments namely, Electronics, Electricals and Consumer Durables. Electronics includes stabilisers, digital UPS, UPS and solar inverters; Electricals includes PVC insulated cables, switch gears, single phase pumps, three-phase pumps and modular switches; Consumer Durables includes electric water heaters, solar water heaters, fans, induction cooktops, mixer grinders, glasstop gas stoves, rice cookers, air coolers, breakfast appliances, kitchen hoods and water purifiers.

As V-Guard's operations were impacted during the second wave in May this year, the company is prepared for future uncertainties. 

Sudarshan Kasturi, Senior Vice President and Chief Financial Officer, V-Guard Industries Ltd told Business Today after the results, "One is from the learnings of last year, we've, managed to keep our supply chain more flexible so we don't get caught up by disruptions. We like to prepare and give some additional inventory to take care of consumer demand when it comes. And then on the demand side, when the markets open and there is freedom of movement, we will try to do the best we can. The margin pressures are manageable, is the demand side which is we really need to watch out."

The festive season tends to be big for the industry and V-Guard too is hopeful for a strong season. Even January to March is another big period the company is eying.

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