V-Guard Industri Q1 FY27 Results (NSE: VGUARD)
Signal: Margin expansion
The read
V-Guard delivered a standout Q1FY27 with revenue +23.5% YoY and PAT +76.4%, the latter driven by strong operating leverage (EBITDA margin expanded 240bps to 11.2%), lower finance costs, and higher other income. The turnaround in Consumer Durables (loss to profit) and working capital improvement (days halved to 31) are key positives. Gross margin was flat, but the overall earnings quality is clean.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,810.65 Cr | 23.5% | N/A |
| EBIT | ₹174.98 Cr | 70.7% | |
| Net profit | ₹130.25 Cr | 76.4% | |
| EPS | ₹2.97 | 75.7% | |
| EBIT margin | 11.2% |
P&L walk
Revenue grew 23.5% YoY to ₹1,810.65 Cr, with all segments delivering double-digit growth. Gross margin flat at 36.9%, but EBITDA margin expanded 240bps to 11.2% due to lower employee cost growth (+18.8% vs revenue +23.5%) and other expenses (+12.8% vs revenue). Depreciation and finance costs were modest. Other income more than doubled to ₹11.68 Cr, adding to PBT growth of 74.9%. PAT grew 76.4% to ₹130.25 Cr, EPS at ₹2.97.
Segments
Electronics (36.4% of rev) and Electricals (37.0%) drove growth, with Electricals profit surging 49.1% YoY. Consumer Durables turned around from a -₹7.17 Cr loss to a ₹14.92 Cr profit, significantly boosting total segment margin from 10.1% to 12.1%.
Key positives
- Revenue growth broad-based: all segments posted double-digit YoY growth (Electronics +22.8%, Electricals +27.7%, Consumer Durables +19.2%, Sunflame +18.3%).
- EBITDA margin expanded 240bps YoY to 11.2%, driven by slower growth in employee costs (+18.8% vs revenue +23.5%) and other expenses (+12.8%).
- Consumer Durables segment turned profitable from a loss of ₹-7.17 Cr in Q1FY26 to profit of ₹14.92 Cr in Q1FY27.
- Working capital improved sharply: debtor days down from 27 to 22, working capital days halved from 63 to 31.
- South region grew 36.7% YoY, indicating strong market penetration and seasonal tailwinds.
Key concerns
- Gross margin flat at 36.9% YoY, suggesting no input cost relief or pricing power improvement.
- Other income contributed 6.8% of PBT (₹11.68 Cr vs ₹5.25 Cr), boosting profit growth; core operating profit growth (EBITDA +57.3%) was still strong but less than PAT growth.
- Consumer Durables segment margin at 3.6% remains thin; sustainability of turnaround needs monitoring.
- Management cited West Asia geopolitical risks as a potential supply/margin headwind.
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