V-Guard Industries (532953) Q4 12/13 earnings summary

Executive summary

• FY2013 net revenue rose 41% to ₹1,360.21 crore, with growth broad-based across product categories and geographies; non-South markets contributed 25% of revenue versus 5% in FY2008.

• Expansion beyond South India, increased brand investment and a growing distribution network supported growth; digital UPS, pumps, stabilizers and house wiring cables contributed 73% of revenue.

Financial highlights

• Revenue from operations ₹1,360.21 crore, up 41% YoY; PBT ₹82.18 crore, up 19%; PAT ₹62.91 crore, up 24%.

• EBITDA ₹113.56 crore, up 18%; EPS ₹21.08, up 24%; net worth ₹261.33 crore versus ₹210.64 crore at March 2012.

• Total expenses increased 43% to ₹1,278.04 crore; FY2013 advertising spend was ₹58 crore, or 4.27% of revenue.

• Board recommended a final dividend of ₹3.50 per share; proposed total cash outflow including dividend tax was ₹12.22 crore.

Outlook and guidance

• FY2014 advertising spend targeted at 3.5–4% of revenue, with emphasis on non-South markets and capturing seasonal demand.

• Growth priorities include raising non-South revenue per distributor, expanding retailer coverage and leveraging the existing distribution network for new products.

• Kashipur house-wiring cable capacity expansion planned in two phases: 1.8 million additional coils by July 2013 and 1.5 million by January 2014.

• Management expected robust demand across product categories and expressed confidence in sustaining financial performance; FY2014 Indian GDP growth was forecast above 6%, versus 5% in FY2013.