V-Guard Industries (532953) Q4 09/10 earnings summary

Executive summary

• FY10 net revenue rose 43.35% YoY to Rs.45,408.91 lakhs; net profit after tax increased 46.85% to Rs.2,547.26 lakhs. Growth reflected wider geographic reach, new products and stronger demand.

• Performance benefited from recovery in core sectors and expanded presence in North India, including tier II and III cities.

Financial highlights

• Net sales were Rs.45,408.91 lakhs versus Rs.31,677.67 lakhs; total income was Rs.45,551.35 lakhs versus Rs.32,041.70 lakhs.

• Operating profit before depreciation, interest and tax was Rs.5,179.48 lakhs versus Rs.3,506.06 lakhs; PBT reached Rs.3,951.27 lakhs versus Rs.2,627.91 lakhs.

• PAT was Rs.2,547.26 lakhs versus Rs.1,734.65 lakhs; proposed dividend was Rs.3 per share, with total dividend and tax outflow of Rs.1,044.15 lakhs.

• Operating cash flow was negative Rs.1,906.90 lakhs versus positive Rs.2,410.48 lakhs, reflecting working-capital outflows, particularly inventories and debtors.

Outlook and guidance

• FY11 outlook was positive, with the Indian economy expected to grow 8%; plans focused on deeper North India penetration, more local-market models and additional channel partners.

• Priorities included more project and institutional orders for LT cables, customized pump models, three-phase pump growth and wider distribution and service coverage.

• Coimbatore cable capacity was expected to double after line balancing; two remaining IPO-funded distribution and service-center projects were targeted for completion in FY11.