V-Guard Industries (532953) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 saw modest growth amid headwinds like high rainfall, weak demand, and GST transition, with consolidated net revenue rising 3.6% YoY to ₹1,340.92 crore and PAT up 3% YoY to ₹65.29 crore.

• Electronics led segment growth at 5.3% YoY, followed by Electricals at 4.7% and Consumer Durables at 1%; all segments reported positive growth.

• South markets grew 4.3% YoY, while non-South markets increased 2.8% YoY; gross margin improved to 37.6%.

• The Sunflame merger is progressing and expected to unlock synergies and efficiencies.

• Un-audited standalone and consolidated financial results for the quarter and half year ended September 30, 2025, were approved and reviewed by the Board and Audit Committee on October 29, 2025.

Financial highlights

• Q2 FY26 revenue increased 3.6% YoY to ₹1,340.92 crore; PAT rose 3% YoY to ₹65.29 crore.

• Gross margin expanded by 140 bps YoY to 37.6%; EBITDA margin declined to 8.1% from 8.5% YoY.

• H1 FY26 net revenue grew 1.3% YoY to ₹2,807 crore; PAT for H1 FY26 was ₹139.14 crore, down 14.3% YoY.

• Net cash position as of 30 September 2025 was ₹92.78 crore, up from ₹4.26 crore a year earlier.

• Standalone net profit for Q2 FY26 was ₹65.97 crore, compared to ₹55.71 crore in Q1 FY26 and ₹52.19 crore in Q2 FY25.

Outlook and guidance

• Management does not expect to achieve the earlier 15% growth target for FY2026 due to challenging conditions and a high base in H1 last year.

• Hopes for improved demand in H2, with more clarity expected after Q3.

• EBITDA margin guidance for FY2027 is 9.5%-10%.

• Management expects demand improvement in coming quarters, supported by GST reforms and anticipated consumption boost.

• The Board has given in-principle approval for the merger of Sunflame Enterprises Private Limited with the holding company to leverage synergies.