19 January 2015
3QFY15 Results Update | Sector:
Consumer
V-Guard Industries
BSE SENSEX
28, 262
Bloomberg
Equity Shares (m)
M.Cap. (INR b) / (USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val (INR M)/Vol ‘000
Free float (%)
S&P CNX
8,551
VGRD IN
29.9
34.1/0.5
1,197/403
-6/39/100
42/57
33.8
CMP: INR1,049
TP: INR1,100 (+5%)
Neutral
Revenue below estimate, led by poor consumer sentiment
V-Guard Industries (VGRD) reported revenue of INR3.95b (est. INR4.23b) in 3QFY15, as
against INR3.52b in 3QFY14, marking a YoY growth of 12% (est. 20%). Revenue growth
was lower-than-expected due to weak consumer sentiments, lower rural demand on
lower farm incomes and slower-than-expected growth in construction activity.
Electronics segment grew 22% YoY to INR1.03b in 3QFY15, while Electricals segment
posted a YoY growth of 8.6% to INR2.8b in 3QFY15. LT cables and pumps growth
posted negative surprise with a growth of -27% and -9% respectively, while on the
positive side, Fans segment posted robust 42% growth during the quarter. South
market grew 8.6% YoY to INR2.7b, while non-South market grew 17% to INR1.2b.
Sharp contraction in EBITDA margin led by ad spends, higher operating costs:
Gross
margin improved 30bp YoY to 23.5% led by better product mix and despite inventory
losses arising from lower copper prices. EBITDA de-grew 26% YoY from INR291m in
3QFY14 to INR217m in 3QFY15 (est. INR381m). EBITDA margin declined 270b to 5.5%
in 3QFY15 (est. 9%), led by higher advertising spends (130bp higher YoY) to 4.9%. Also,
as growth was lower than what the management had budgeted for, operating
expenses - staff costs (110bp) and other expenditure (70bp) were higher as a
proportion of sales. Hence, PAT declined 47.3% to INR92m (est. INR221m) in 3QFY15.
Going forward, management maintained its revenue growth guidance of 20% for FY15
(implying 22% growth for 4QFY15), but lowered its EBITDA margin guidance for FY15
to 8% (range of 8.5% to 9% guided earlier). We cut FY15E, FY16E and FY17E earnings
estimates by 10%, 9% and 2% respectively to reflect the weak near term demand.
Valuation and view:
We value VGRD at 20x FY17E EPS, higher than its historic five-
year average multiple of 15.5x and at a 10% discount to Havell’s multiple of 22x FY17E,
and value the stock at INR1,100. Since we initiated coverage on the stock at INR438 on
8
th
April, 2013, VGRD has witnessed substantial re-rating in multiples from 13x one-
year forward to 20x currently. We believe the current valuations aptly reflect long
term growth prospects and quality of the business. We downgrade the stock to
Neutral
given limited upside (4%).
Financials & Valuation (INR Billion)
Y/E MAR
Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
38.1
27.3
6.8
16.7
0.8
1.4
18.9
5.3
12.5
1.0
1.1
P/BV (x)
8.3
EV/EBITDA 21.8
( )
D. Yield (%) 0.7
EV/Sales (x)
1.8
2015E 2016E 2017E
18.2
1.5
0.8
27.5
17.0
23.4
30.9
21.1
22.4
1.9
1.1
38.4
39.5
26.7
36.4
21.2
27.5
2.5
1.7
55.5
44.6
202.0
30.8
42.3
21.9
BV/Sh (INR) 128.4 158.6
Estimate change
TP change
Rating change
10%
Niket Shah
(Niket.Shah@MotilalOswal.com); +91 22 3982 5426
Atul Mehra
(Atul.Mehra@MotilalOswal.com); +91 22 3982 5417
Investors are advised to refer through disclosures made at the end of the Research Report.

V-Guard Industries
Revenue below estimates; led by poor consumer sentiment
VGRD reported revenue of INR3.95b (est. INR4.23b) in 3QFY15 as against
INR3.52b in 3QFY14 marking a YoY growth of 12% (est. 20%).
Top-line growth was lower than expected due to weak consumer sentiments,
lower rural demand due to lower farm incomes and slower than expected
growth in construction activity.
Management highlighted that off take of the company’s products was weak
even during festive events like Diwali and Onam this year.
Electronics segment grew 22% YoY to INR1.03b in 3QFY15, while Electrical
segment posted a YoY growth of 8.6% to INR2.8b in 3QFY15.
Rural demand has been affected by lower farm incomes as cash crops like
cotton have not fared well this year.
Exhibit 1: Segment wise revenue break-up (INR m)
Segments
Electronics
Electrical / Electromechanical
Others
Total
3QFY15
1,031
2,761
161
3,954
3QFY14
846
2,543
140
3,529
YoY
Growth %
21.9
8.6
15.3
12.0
2QFY15
1,214
2,979
120
4,313
QoQ
Growth %
-15.1
-7.3
35.0
-8.3
Source: Company, MOSL
Stabilizers and Digital UPS witness strong growth, Pumps / Wires subdued
LT cables and pumps growth posted negative surprise with growth of -27% and -
9% respectively, while on the positive side Fans segment posted robust 42%
growth during the quarter.
Increase in water levels in past few years due to above normal rainfall has led to
subdued demand for pumps in key states like Karnataka and Kerala which
together contribute ~45% of the pumps revenues.
Exhibit 2: Product wise revenue break-up (INR m)
Segments (INR mn)
Stabilizers
Standalone UPS
Digital UPS
Pumps
House wiring cable
LT cable
Electric water heater
Fan
Other Products
Solar water heater
Total sales
3QFY15
684
43
305
373
1,210
124
702
228
123
161
3,953
3QFY14
554
57
235
408
1,122
171
582
161
99
140
3,529
YoY
Growth%
23.5
-24.6
29.8
-8.6
7.8
-27.5
20.6
41.6
24.2
15.0
12.0
2QFY15
679
81
455
401
1,402
161
604
210
201
120
4,314
QoQ
Growth%
0.7
-46.9
-33.0
-7.0
-13.7
-23.0
16.2
8.6
-38.8
34.2
-8.4
Source: Company, MOSL
19 January 2015
2

V-Guard Industries
Exhibit 3: Quarterly revenue trend (INR m)
48.2%
32.8%
38.5%
3,190
3,135
3,490
3,787
28.0%
4,082
6.6%
3,340
3,529
1.1%
11.5%
4,224
17.0%
4,777
Total Sales (INR m)
41.5%
29.1%
4,313
12.0%
3,954
YoY Growth
Source: Company, MOSL
South market revenues grow 8.6%, Non-South growth slows down
South market grew 8.6% YoY to INR2.7b while Non-south market grew ~16.5%
YoY in 3QFY15 to INR1.2b.
Revenue contribution from South market now stands at 68% while Non-south
market contribution stands at 32%.
Management highlighted that it is gradually reducing the discount difference
between South and Non-South markets, and hence the difference now stands at
~4% currently as against 8-9%, three years ago.
We believe, narrowing down of discount difference would eventually result in
superior aggregate margins for the company.
Exhibit 5: Non south contribution continues to increase
South (%)
28
22
24
24
31
28
Non south (%)
30
29
35
33
32
Exhibit 4: Geography wise revenue break up (INR m)
Non south
3,140
2,764
2,940
2,876 2,894
3,016
2,710
2,478
2,431 2,496
2,400
916
928
693 879
1,290
964
1,073 1,251
1,670
1,420 1,250
South
72
78
76
76
69
72
70
71
65
67
68
Source: Company, MOSL
Source: Company, MOSL
Addressing e-commerce channel in a measured manner
Management highlighted that even as e-commerce currently is a very small
channel for the company (1% of total revenues), price distortions in the form of
lower prices on e-commerce have impacted traditional channels in some
manner.
In order to tackle this in a better manner, and to insulate the traditional channel
from lower price on e-commerce, V-Guard has specifically tied up with two
leading e-commerce players - Flipkart and Amazon.
The tie up would involve selling customized products made specifically for this
channel in order to avoid price distortion between traditional channels and e-
commerce.
3
19 January 2015

V-Guard Industries
Sharp contraction in EBITDA margins led by ad spends, higher operating
costs
Gross margins improved 30bp YoY to 23.5% led by better product mix and
despite inventory losses due to lower copper prices.
EBITDA de-grew 26% YoY from INR291m in 3QFY14 to 217m in 3QFY15
(est.INR381m).
EBITDA margins declined 270bps to 5.5% in 3QFY15 (est 9%) led by higher
advertising spends (130bp higher YoY) from 3.6% to 4.9%.
Additionally, as growth was lower than what the management had budgeted
for, operating expenses - staff costs (110bp) as well as other expenditure (70bp)
were higher as a proportion to sales.
Management quantified margin declined as follows - 1.3% due to higher ad
spend, 1.3% due to copper inventory write down and balance 1.3% due to
impact of operating leverage.
Consequently, PAT declined 47.3% from INR175m in 3QFY14 to INR92m (est.
INR221) in 3QFY15.
Exhibit 7: PAT trend (INR m)
PAT (INR m)
162.9%
5.5%
67.3%
YoY Growth
129.1%
26.1%
32.3%
-47.3%
92
Exhibit 6: EBITDA margins trend (INR m)
10.7%
9.6%
EBITDA (INR m)
7.4%
7.6%
EBITDA margins
8.1% 8.3% 8.4% 8.5% 8.3%
354 404 356
343 300
5.3%
309 271 291
257
217
199
-14.6%
23.2%
14.2%
-53.4%
-19.4%
89
207 180 153
176 145 175 205 223 192
Source: Company, MOSL
Source: Company, MOSL
Management continues to invest aggressively in A&P
A&P spent increased by 130bps to 4.9% in 3QFY15 largely on account of nation-
wide rollout of water heaters and higher below the line activities.
However management indicated that if demand continues to remain weak then
A&P spend will be reduced as against aggressive advertising.
Management has guided an ad spend of ~INR100m during 4QFY15.
Exhibit 9: Annual ad spend trend (INR m)
Ad spends
5.1
5.1
3.8
4.2
% of sales
4.5
3.8
% of revenues
Exhibit 8: Quarterly A&P spend trend (INR m)
Ad spends
4.6
3.6
2.1
116
160
66
238 215
6.3
5.3
3.3
110
180
3.6
144
4.6
3.4
220
142
4.9
3.3
194
162
FY09
231
FY10
277
FY11
408
FY12
617
FY13
582
FY14
Source: Company, MOSL
Source: Company, MOSL
19 January 2015
4

V-Guard Industries
Working capital management continues to be robust
Working capital days saw a marginal slippage from 76 days in 3QFY14 to 78 days
in 3QFY15 primarily due to reduction in creditor days from 53 days to 44 days
YoY on account of lower acceptances during 3QFY15.
However, Debtor days showed a improvement of 3 days YoY from 44 days to 41
days and Inventory days showed an improvement of 5 days YoY from 86 days to
81 days.
Management indicated that inventory levels at channel partners have been
rationalized to 30 days on account of strict action taken by the company (like bill
blocking) on non-paying channel partners.
20% revenue growth guidance maintained; margin guidance cut to 8%
Management has maintained its revenue growth guidance of 20% growth for
FY15 (implying 22% growth for 4QFY15).
However it has lowered its EBITDA margin guidance for FY15 to 8.0% (from 8.5%
to 9% earlier).
We cut our FY15, FY16 and FY17 earnings estimates by 10%, 9% and 2%
respectively to reflect weak near term demand.
Other conference call highlights
Fall in crude oil prices to result in savings on freight costs. Freight cost comprises
3% of V-Guard’s revenues; hence 10% savings in freight can result in 0.3%
margin savings.
Management highlighted that the recent cut in interest rates is a directionally
positive move for the construction sector, which should result in some revival in
construction activity and in turn should result in higher growth for the housing
wires segment for V-Guard.
While commodity prices have softened, company will not be completely passing
on the benefits to clients. In case of wires segment, given the commoditized
nature of the product, company may have to pass on complete benefits of lower
copper prices. However, V-Guard commands strong pricing power in other
products where margins should expand.
Management will invest some part of the margin gains in A&P, while the balance
will flow down to profits.
Debt to Equity down to 0.3x in 3QFY15 as against 0.4x in 3QFY14.
19 January 2015
5

V-Guard Industries
Valuation and View
We value VGRD at 20x FY17E EPS, higher than its historic 5 year average multiple of
15.5x and at a 10% discount to Havell’s multiple of 22x FY17E, which we believe is
justified considering:
Strong return ratios
: V-Guard derives 57% of revenues through outsourcing
model thereby helping to keep business model asset light and enabling the
company to focus on branding. Outsourcing model leads to higher ROCE with
overall corporate RoCE of 43% for FY17E and a debt free balance sheet; ROCE
for stabilizers currently stand at 106%, pumps at 37%, water heaters at 51%,
UPS and digital UPS in the range of 30-34%. Higher capital efficiency lends
significant scalability to the business.
Significant potential for growth and margin expansion:
V-Guard has over
the past five years significantly expanded its presence in non-south markets with
distributors in non south markets standing at 220 higher than south of 187
distributors. However, revenue per distributor in non-south markets stands at
INR20-25m as against INR55-60m in south markets, implying significant
scalability from non-south markets. Distributor margins and discounts in non
south margins are currently higher than south markets, which we expect to
decline going forward, thus improving margins.
We believe the following factors can pose risks to our estimates:
Poor summer season can affect growth:
Around 70% of the company's
products are related to the summer season. Hence, in case of a poor summer,
demand for products could decline thereby affecting growth.
Highly dependent on South India:
V-Guard earns 70% of its revenue from
the Southern region. Though its brand recall is high in these markets, any
unforeseen circumstances like poor rainfall might affect its growth.
We value the stock at INR1,100, 20x FY17E EPS of INR55.5 and downgrade the stock
to ‘Neutral’. Since we initiated coverage on the stock at INR438 on 8
th
April, 2013,
VGRD has witnessed substantial re-rating in multiples from 13x one-year forward to
20x currently. We believe the current valuations aptly reflect long term growth
prospects and quality of the business. Hence, we downgrade the stock to
Neutral
given limited upside (4%).
Exhibit 10: Price to earnings (one year forward)
35
30
25
20
15
10
5
0
P/E (x)
5 Yrs Avg(x)
30.4
Exhibit 11: Price to book (one year forward)
10.0
8.0
6.0
P/B (x)
5 Yrs Avg(x)
7.4
15.5
4.0
2.0
0.0
3.6
Source: Company, MOSL
19 January 2015
Source: Company, MOSL
6

V-Guard Industries
Story in charts
Exhibit 12: V-Guard's ad spends highest among peers
Exhibit 13: Revenue/ Distribution pan India trend (m)
South
Non South
Pan India average 75.7
71.6
55.9
35.2
25.8
4.3
FY08
39.1
26.1
16.7
9.3
36.9
23.0
20.6
57.8
49.1
45.1
37.8
20.7
33.1
21.9
4.8
FY09
FY10
FY11
FY12
FY13
FY14
Source: Company, MOSL
Source: Company, MOSL
Exhibit 14: Distribution network pan India trend
South
Non south
167
134
220
187
Exhibit 15: V-Guard adopts asset light business model
In House
80%
60%
40%
20%
0%
Outsourced
78
34
90
59
100
77
10397
110
95
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
Source: Company, MOSL
Source: Company, MOSL
Exhibit 16: Annual sales trend
Total Sales (INR m)
43%
60%
7,263
37%
9,936
13,583 14,924
37%
10%
Growth YoY
27,511
22,397
18,194
22%
23%
23%
Exhibit 17: Annual PAT trend
46.8%
57.1%
27.0%
11.5% 17.0%
255
426
508
23.7%
629
701
821
1,145 1,656
PAT (INR m)
Growth YoY
39.5%
44.6%
4,541
Source: Company, MOSL
Source: Company, MOSL
19 January 2015
7

V-Guard Industries
Exhibit 18: Key assumptions
FY10
1. PVC Insulated Cable(in kms)
Sales Quantity ( in kms)
YoY growth
Realisation per kms (Rs.)
YoY growth
Sales Revenues in mn
YoY growth
2. Stabilizers - Traded
Sales Quantity
YoY growth
Realisation per piece
YoY growth
Sales Revenues in mn
YoY growth
3. Pumps - Traded & Manufactured
Sales Quantity
YoY growth
Realisation per piece
YoY growth
Sales Revenues in mn
YoY growth
182,953
70%
6.6
1%
1,199
72%
FY11
245,141
34%
8.4
28%
2,061
72%
FY12
282,889
15%
10.0
19%
2,826
37%
FY13
378,601
34%
9.9
-1%
3,734
32%
FY14
469,465
24%
10.1
2%
4,723
26%
FY15E
553,969
18%
10.2
2%
5,671
20%
2,768,074
22%
1,188
1%
3,288
23%
441,614
-2%
4,426
2%
1,955
0%
1,125,376
37%
1,193
2%
1,343
39.7%
6,432
0%
118
2%
758
2%
24,905
27%
21,702
2%
541
30%
786,793
34%
2,390
1%
1,880
35.0%
FY16E
698,001
26%
9.9
-3%
6,931
22%
3,294,009
19%
1,202
1%
3,960
20%
507,856
15%
4,528
2%
2,300
18%
1,429,228
27%
1,217
2%
1,739
29.5%
6,754
5%
120
2%
812
7%
31,879
28%
22,180
2%
707
31%
1,014,963
29%
2,414
1%
2,450
30.3%
FY17E
865,522
24%
10.1
2%
8,744
26%
3,919,870
19%
1,212
1%
4,750
20%
584,035
15%
4,573
1%
2,671
16%
1,757,950
23%
1,241
2%
2,182
25.5%
7,092
5%
123
2%
869
7%
40,805
28%
22,668
2%
925
31%
1,258,554
24%
2,438
1%
3,068
25.2%
1,170,544 1,555,374 1,792,602 2,034,900 2,268,914
10%
33%
15%
14%
12%
1,043
1,073
1,121
1,168
1,179
14%
3%
5%
4%
1%
1,221
1,668
2,010
2,377
2,674
26%
239,795
29%
3,557
0%
853
29%
37%
340,963
42%
3,541
0%
1,207
42%
556,462
95%
957
7%
532
109%
4,096
131%
100
17%
411
169%
10,322
29%
20,713
2%
214
31%
192,427
64%
3,119
-1%
600
62%
20%
378,707
11%
4,010
13%
1,519
26%
590,526
6%
1,080
13%
638
20%
5,552
36%
105
5%
582
42%
12,815
24%
20,250
-2%
260
21%
304,779
58%
2,831
-9%
863
44%
18%
474,344
25%
4,327
8%
2,052
35%
708,140
20%
1,125
4%
796
25%
6,432
16%
113
8%
728
25%
15,085
18%
20,497
1%
309
19%
470,781
54%
2,343
-17%
1,103
28%
13%
450,627
-5%
4,327
0%
1,950
-5%
821,442
16%
1,170
4%
961
20.6%
6,432
0%
115
2%
743
2.0%
19,611
30%
21,235
4%
416
34.7%
588,476
25%
2,366
1%
1,393
26.3%
4. Electric Fans - Traded & Manufactured
Sales Quantity
284,730
YoY growth
97%
Realisation per piece
894
YoY growth
0%
Sales Revenues in mn
255
YoY growth
5. LT Power & Control Cable (in Kms.)
Sales Quantity
YoY growth
Realisation per mtrs
YoY growth
Sales Revenues in mn
YoY growth
6. Solar Water Heaters
Sales Quantity
YoY growth
Realisation per piece
YoY growth
Sales Revenues in mn
YoY growth
7. Water Heater
Sales Quantity
YoY growth
Realisation per piece
YoY growth
Sales Revenue in mn
YoY growth
96%
1,777
0%
86
0%
152
0%
8,016
6%
20,284
-1%
163
5%
117,174
11%
3,155
-10%
370
0%
19 January 2015
8

V-Guard Industries
8. UPS - Traded
Sales Quantity
YoY growth
Realisation per pc.
YoY growth
Sales Revenues in mn
YoY growth
9. Digital UPS - Traded *
Sales Quantity
YoY growth
Realisation per pc.
YoY growth
Sales Revenues in mn
YoY growth
10. Cook Tops ( traded)
Sales Quantity
YoY growth
Realisation per mtrs
YoY growth
Sales Revenues in mn
YoY growth
11. Switch gears
Sales Quantity
YoY growth
Realisation per mtrs
YoY growth
Sales Revenues in mn
YoY growth
Total revenue growth
Sales Mix %
PVC Insulated Cable
Stabilizers
Pumps
Electric Fans
LT Cables
Solar Water Heaters
Water Heater
UPS
Digi UPS
Induction cooktops and switchgears
Others
43.3%
FY10
26%
27%
19%
6%
3%
4%
8%
4%
2%
0%
2%
60.0%
FY11
28%
23%
17%
7%
6%
3%
8%
4%
3%
0%
1%
32.8%
FY12
28%
20%
15%
6%
6%
3%
9%
4%
7%
0%
1%
102,226
17%
1,698
-9%
173.6
7%
18,878
828%
4,646
0
88
720%
171,538
68%
1,587
-7%
272.2
57%
44,363
135%
4,871
5%
216
146%
252,859
47%
1,664
5%
420.8
55%
131,836
197%
5,512
13%
727
236%
283,963
12%
1,700
2%
483
15%
278,415
111%
6,222
13%
1,732
138%
86,223
0%
1,733
0%
149
0%
518,808
15%
228
0%
118
0%
41.0%
FY13
27%
17%
15%
6%
5%
2%
8%
4%
13%
2%
0%
227,170
-20%
1,700
0%
386
-20%
208,811
-25%
6,533
5%
1,364
-21%
99,156
0%
1,768
2%
175
17%
596,629
15%
233
2%
139
17.3%
11.6%
FY14
32%
18%
13%
6%
5%
3%
9%
3%
9%
2%
0%
249,887
10%
1,700
0%
425
10%
281,895
35%
6,794
4%
1,915
40%
133,861
35%
1,804
2%
241
38%
745,787
25%
237
2%
177
28%
19.9%
FY15E
31%
18%
11%
7%
4%
3%
10%
2%
11%
2%
0%
274,876
10%
1,700
0%
467
10%
352,369
25%
7,066
4%
2,490
30%
170,004
27%
1,840
2%
313
30%
947,149
27%
242
2%
229
30%
23.1%
FY16E
31%
18%
10%
8%
4%
3%
11%
2%
11%
2%
0%
302,364
10%
1,700
0%
514
10%
422,843
20%
7,349
4%
3,107
25%
212,505
25%
1,876
2%
399
28%
1,136,579
20%
247
2%
281
22%
22.8%
FY17E
32%
17%
10%
8%
3%
3%
11%
2%
11%
2%
0%
Source: Company, MOSL
19 January 2015
9

V-Guard Industries
Corporate profile
Company description
Established in 1977, V-Guard Industries is a dominant
player in south India in the light electrical industry.
Beginning with its flagship product, voltage stabilizers (in
which it is the market leader), the company has, over
last 10 years, expanded its product profile to include
PVC insulated cables, LT power cables, Fans, Geysers,
Solar water heaters, Pumps, UPS and Inverters. The
company, which went public in 2008 and has seen
revenue CAGR of 37% and a PAT CAGR of 32% in the
past five years.
Exhibit 20: Shareholding pattern (%)
Sep-14
Promoter
DII
FII
Others
66.2
4.4
19.0
10.4
Jun-14
66.2
4.1
19.0
10.7
Sep-13
65.5
2.5
17.4
14.6
Exhibit 19: Sensex rebased
Exhibit 21: Top holders
Holder Name
Nalanda India Equity Fund Ltd
Steadview Capital Mauritus Ltd
Massachusetts Institute of Technology - SCM
Nalanda India Fund Ltd
ICICI Prudential Value Fund Sereies 2
%
Holding
4.4
3.7
3.2
2.7
2.4
Note: FII Includes depository receipts
Exhibit 22: Top management
Name
Kochouseph Chittilappilly
Cherian N Punnoose
Mithun K Chittilappilly
Designation
Chairman
Vice Chairman
Managing Director
Exhibit 23: Directors
Name
Kochouseph Chittilappilly
Cherian N Punnoose*
Mithun K Chittilappilly
A K Nair*
C J George*
*Independent
Name
Ramachandran Venkataraman
Joshna Mithun
Ullas K Kamath*
Jayasree K
Exhibit 24: Auditors
Name
S R Batliboi & Associates LLP
Ajeesh & Associates
Type
Statutory
Cost Auditor
Exhibit 25: MOSL forecast v/s consensus
EPS (INR)
FY15
FY16
FY17
MOSL forecast
27.5
38.4
55.5
Consensus
forecast
29.9
38.7
50.9
Variation (%)
-8.1
-0.7
9.0
19 January 2015
10

V-Guard Industries
Financials and valuations
Standalone - Income Statement
Y/E March
Net Sales
Change (%)
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income - Rec.
PBT bef. EO Exp.
PBT after EO Exp.
Current Tax
Tax Rate (%)
Reported PAT
PAT Adj for EO items
Change (%)
Margin (%)
Net Profit
FY10
4,541
43.3
4,037
88.9
504
11.1
71
432
51
14
395
395
127
35.5
255
255
46.8
5.6
255
FY11
7,263
60.0
6,536
90.0
728
10.0
79
648
113
20
555
591
161
27.9
426
400
57.1
5.5
400
FY12
9,646
32.8
8,711
90.3
936
9.7
97
839
170
24
692
692
202
26.6
508
508
27.0
5.3
508
FY13
13,602
41.0
12,503
91.9
1,099
8.1
114
985
200
36
821
821
156
23.4
629
629
23.7
4.6
629
FY14
15,176
11.6
13,950
91.9
1,225
8.1
120
1,105
211
48
943
943
225
25.6
701
701
11.5
4.6
701
FY15E
18,194
19.9
16,720
91.9
1,474
8.1
146
1,328
246
58
1,140
1,140
319
28.0
821
821
17.0
4.5
821
(INR Million)
FY16E
22,397
23.1
20,494
91.5
1,904
8.5
164
1,740
219
70
1,591
1,591
445
28.0
1,145
1,145
39.5
5.1
1,145
FY17E
27,511
22.8
25,035
91.0
2,476
9.0
182
2,294
77
84
2,300
2,300
644
28.0
1,656
1,656
44.6
6.0
1,656
Standalone - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Deferred Liabilities
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Provisions
Net Current Assets
Appl. of Funds
E: MOSL Estimates
19 January 2015
FY10
298
1,116
1,415
57
805
2,277
1,379
256
1,123
29
1,904
985
756
74
89
824
690
134
1,080
2,277
FY11
298
1,421
1,720
61
1,394
3,175
1,462
324
1,137
14
2,898
1,424
1,231
71
172
874
712
162
2,023
3,175
FY12
298
1,808
2,106
43
1,091
3,240
1,625
395
1,230
111
3,365
1,574
1,478
34
279
1,466
1,222
245
1,899
3,240
FY13
298
2,315
2,613
79
1,650
4,343
1,888
506
1,382
88
5,079
2,486
1,988
149
455
2,205
1,959
246
2,873
4,343
FY14
298
2,886
3,184
95
1,084
4,363
2,280
618
1,662
35
5,053
2,525
2,121
28
379
2,386
2,069
317
2,667
4,363
FY15E
298
3,534
3,832
95
884
4,811
2,580
764
1,816
91
6,115
3,138
2,393
92
492
3,211
2,846
365
2,904
4,811
(INR Million)
FY16E
298
4,437
4,735
95
484
5,314
2,880
928
1,952
112
7,306
3,808
2,761
97
640
4,057
3,584
473
3,250
5,314
FY17E
298
5,729
6,028
95
0
6,123
3,180
1,110
2,071
138
9,245
4,690
3,316
406
832
5,330
4,690
640
3,915
6,123
11

V-Guard Industries
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
Working Capital Ratios
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Working Capital Turnover (Days)
Leverage Ratio (x)
Current Ratio
Debt/Equity
FY10
8.5
10.9
47.4
3.0
41.0
122.9
96.0
22.1
7.1
63.6
0.3
19.0
23.8
FY11
13.4
16.1
57.6
3.5
28.5
78.2
65.3
18.2
4.5
44.9
0.3
25.5
25.0
FY12
17.0
20.3
70.6
3.5
23.9
61.6
51.7
14.9
3.4
34.6
0.3
26.6
27.3
FY13
21.1
24.9
87.6
3.5
19.3
49.8
42.1
12.0
2.4
29.9
0.3
26.6
27.4
FY14
23.5
27.5
106.7
3.5
17.3
44.6
38.1
9.8
2.1
26.4
0.3
24.2
27.0
FY15E
27.5
32.4
128.4
5.0
21.1
38.1
32.4
8.2
1.8
21.8
0.5
23.4
30.9
FY16E
38.4
43.9
158.6
7.0
21.2
27.3
23.9
6.6
1.4
16.6
0.7
26.7
36.4
FY17E
55.5
61.6
202.0
10.5
21.9
18.9
17.0
5.2
1.1
12.5
1.0
30.8
42.3
2.0
79
60
55
81
2.3
72
61
36
98
3.0
60
55
46
71
3.1
67
52
53
73
3.5
61
50
50
63
3.8
63
47
57
56
4.2
62
44
58
51
4.5
62
43
62
47
2.3
0.6
3.3
0.8
2.3
0.5
2.3
0.6
2.1
0.3
1.9
0.2
1.8
0.1
1.7
0.0
Standalone - Cash Flow Statement
Y/E March
Oper. Profit/(Loss) before Tax
Depreciation
Interest and finance charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
(inc)/dec in FA
(Pur)/Sale of Invest.
Others
CF from investments
(Inc)/Dec in Debt
Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
FY10
395
71
51
125
-584
-192
-253
68
4
-181
541
-50
-87
404
33
41
74
FY11
591
79
112
181
-946
-344
-86
46
3
-37
593
-113
-104
375
-3
74
71
FY12
692
97
162
157
30
823
-293
0
15
-277
-310
-166
-121
-597
-38
71
33
FY13
822
114
180
256
-772
88
-256
0
3
-254
575
-190
-121
265
116
34
150
FY14
943
120
191
189
-23
1,042
-324
0
44
-280
-591
-236
-122
-950
-122
149
27
FY15E
1,140
146
246
319
-173
1,040
-356
0
0
-356
-200
-246
-173
-619
65
28
92
FY16E
1,591
164
219
445
-341
1,187
-321
0
0
-321
-400
-219
-242
-861
5
92
97
FY17E
2,300
182
77
644
-356
1,560
-326
0
0
-326
-484
-77
-364
-925
309
97
406
19 January 2015
12

V-Guard Industries
NOTES
19 January 2015
13

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14