V-Guard Industries (VGIL) Poised for 19% Growth: Jefferies Cites 4 Major Drivers Behind Stock Upsurge

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• V-Guard Industries has demonstrated robust growth across its various segments, with a notable 47% increase in share price over the past year.
• The company’s Q4 results show a strong performance, particularly in the Electronics and Electricals segments, alongside the integration of acquired Sunflame sales.
• “With a strong performance, analysts at Jefferies expect more than 19% upside to the stock,” highlighting the potential for continued growth.

V-Guard Industries’ recent financial results and strategic acquisitions set the stage for sustained growth, making it a noteworthy stock for investors.

Strong growth in all segments

The Electricals segment, which includes products like Wires, Pumps, Switchgears, and Modular Switches, saw a growth of 10.7%. Meanwhile, the Electronics segment, which comprises Stabilizers, UPS, and Inverters, grew by 18.9% year-over-year. The Consumer Durables segment, boosted by the summer sales of fans, grew by an impressive 27.9% year-over-year.

Decent Q4 results and growth

For Q4 FY24, V-Guard reported a revenue increase of 17.9% year-over-year to Rs. 1,342.77 crore. EBITDA for the quarter was Rs. 127.85 crore, up 31.5% from the previous year, and net profit surged by 44.5% to Rs. 76.17 crore.

Analysts project significant upside

Analysts at Jefferies have highlighted several key reasons for their positive outlook on V-Guard:

1. The Consumer Durables segment continues to drive growth, with significant sales increases both quarterly and annually.
2. The integration of Sunflame is expected to strengthen its presence in e-commerce and southern markets, with anticipated manufacturing synergies boosting future sales.
3. Improvements in margin are seen as sustainable, with increased internal manufacturing and operational efficiencies.
4. Geographical diversification strategies are paying off, with non-south markets growing faster than southern markets.

Conclusion

V-Guard’s strategic initiatives and strong quarterly performance underline its potential for future growth. With analysts forecasting a bright outlook, the company remains a compelling option for investors looking at sustainable gains.

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