V-Guard Industries (532953) investor relations material

Executive summary

• Q1 FY26 consolidated revenue was INR 1,466.08 crore, down 0.7% year-over-year, mainly due to a weak summer season and high base effect.

• Consolidated net profit (PAT) for the quarter was INR 73.85 crore, down from INR 99 crore in Q1 FY25, primarily due to operating deleverage from flat revenues.

• Electronics and Electricals segments saw moderate growth, while Consumer Durables declined sharply due to lower demand.

• Non-South markets grew 2.1% year-over-year, now contributing 52.3% of total revenues, while South markets declined 3.3%.

• Board approved the in-principle merger of Sunflame Enterprises Private Limited with the parent company to accelerate integration and operational synergies.

Financial highlights

• EBITDA (excluding other income) was INR 124 crore, down 20.7% year-over-year, with an EBITDA margin of 8.4% versus 10.5% last year.

• Gross margin improved to 36.9%, up 20 bps year-over-year and 110 bps sequentially, nearing pre-COVID levels.

• PAT margin at 5.0% (down 170 bps YoY); Diluted EPS at INR 1.68 vs. INR 2.25 YoY.

• Strong cash flow from operations at INR 134.45 crore; net cash position improved to INR 155.32 crore.

• ROE and ROCE at 13.2% and 16.7% respectively over the last 12 months.

Outlook and guidance

• Demand is expected to normalize in coming quarters, with continued investments in brand building and capacity enhancement.

• FY26 revenue growth guidance revised to 11–13% due to Q1 challenges, down from earlier 14–15% target.

• Margins for FY26 expected in the 8.5–9.5% range.

• Board approved in-principle the merger of Sunflame Enterprises Private Limited with the holding company to leverage synergies.