V-Guard Industries Limited — Q3 FY26 earnings call

Call held 29 Jan 2026

Management summary

V-Guard Industries delivered a double-digit topline growth of 10.6% in Q3 FY26, primarily fueled by the Electricals segment. Despite a gross margin contraction, EBITDA margin expanded by 60 bps. PAT saw a decline due to a one-time exceptional charge, though underlying PAT improved by 22%. The company is navigating commodity inflation with planned price hikes and is optimistic about the upcoming summer season and the integration of Sunflame.

Highlights

  • Consolidated net revenue from operations stood at ₹1,404 crores, reflecting a 10.6% YoY growth.

  • EBITDA (excluding other income) increased by 18.3% YoY to ₹123 crores.

  • EBITDA margin improved by 60 basis points to 8.8% from 8.2% in Q3 FY25.

  • Gross margin contracted by 100 basis points to 35.7% due to mix impact.

  • Consolidated PAT declined by 5.2% YoY to ₹57 crores, impacted by a ₹22.11 crore exceptional charge for employee benefits.

  • Electricals segment reported robust 26% YoY revenue growth, driven by volume and higher copper prices.

  • Sunflame revenue declined by 9.9% YoY due to softness in kitchen appliances and weak CSD channel.

  • Management expects a warm summer, anticipating strong results for seasonal categories.

Concerns

  • Raw Material Cost Inflation (especially Copper)

Key financials

  1. Revenue ₹1,404 Cr +10.6%YoY
  2. Gross Margin 35.7%
  3. EBITDA ₹123 Cr +18.3%YoY
  4. EBITDA Margin 8.8%
  5. PAT ₹57 Cr -5.2%YoY
  6. Underlying PAT Growth 22% +22%YoY

What they filed

Q1 FY27: revenue up 23.5%, net profit up 92.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,229 1,185 1,480 1,406 1,272 +3%1,326 +12%1,687 +14%1,737 +24%
EBITDA91 83 121 94 85 −7%96 +16%143 +18%155 +65%
Net profit52 48 78 56 66 +27%42 −12%95 +22%108 +93%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Electricals
    26% Revenue Growth
  • Electronics
    ₹286 Cr Revenue0% Revenue Growth
  • Consumer Durables
    4.6% Revenue Growth
  • Sunflame
    -9.9% Revenue Decline
  • Wires (within Electricals)
    20% Price Growth (Dec)10% Volume Growth (Dec)

Guidance & targets

Volume

  • BLDC Fans Shift Volume · every year · Medium confidence 5% to 10% reduction in induction motor fan size
    maybe we can see 5% to 10% reduction in the size of the induction motor fans towards BLDC, in favour of BLDC every year, and that's what we expect.

    — Mithun K Chittilappilly, Managing Director

Market Share

  • Fans Market Share (Decorative & BLDC) Market Share · Medium confidence top-3
    we would like to be the top-3 in the Decorative and BLDC Fans categories, for example.

    — Mithun K Chittilappilly, Managing Director

  • Fans Market Share (Premium TPW) Market Share · Medium confidence top-3
    We would like to be top-3 in the Premium TPW Fans segment.

    — Mithun K Chittilappilly, Managing Director

Revenue

  • Solar Pumps Order Value Revenue · current · High confidence ₹4-5 crores
    INR4-5 crores.

    — Sudarshan Kasturi, Senior VP & Chief Financial Officer

  • Solar Pumps Business Scale-up Revenue · next 12-18 months · Medium confidence meaningfully scale up
    in the next 12-18 months, scale it up meaningfully.

    — Mithun K Chittilappilly, Managing Director

  • Categories > ₹1,000 crores Revenue · long-term · High confidence at least six categories
    So, we have at least six categories that can do more than INR1,000 crores.

    — Mithun K Chittilappilly, Managing Director

Pricing

  • Fans Price Increase Pricing · before March · Medium confidence 2-3%
    another 2- or 3-odd percent of increase is required before March.

    — Mithun K Chittilappilly, Managing Director

Market context

  • EBITDA Margin Profitability · by FY27-end · Medium confidence double-digit
    I think if our growth does come back, we should be expecting double-digit EBITDA margins, yes.

    — Mithun K Chittilappilly, Managing Director

Risks & concerns

  • Raw Material Cost Inflation (especially Copper)

    high

    Significant increase in copper prices (almost 30% YoY for Wires), leading to price hikes and potential muted volume growth in affected categories like Wires and copper-based Fans. Management noted a 'very, very volatile commodity environment'.

    Management acknowledged

  • Muted Demand for Summer-led Categories

    medium

    Some summer-led categories (e.g., fans, cooling products) witnessed subdued demand in Q3 FY26, impacting Consumer Durables segment growth. However, management expects a strong rebound in the upcoming summer.

    Management acknowledged

  • Softness in Kitchen Appliances (Sunflame)

    medium

    Sunflame reported a 9.9% YoY revenue decline due to continued softness in the kitchen appliances category and weak demand in the CSD channel. Sales integration is underway, and product refresh is planned.

    Management acknowledged

  • Volume Impact from Price Hikes (Wires)

    medium

    Due to significant copper price increases, volume growth in Wires could be muted, although value growth will be strong. This is an industry-wide issue as the product is essential.

    Management acknowledged

  • BLDC Fan Acceptance Issues in Upcountry Markets

    low

    Not all BLDC fans work properly in upcountry markets with violent voltage fluctuations, leading to some customer pushback. V-Guard has models designed for these conditions.

    Management acknowledged

  • ACs with Inbuilt Stabilizers Reducing Demand

    low

    Management stated this debate has been ongoing for 15 years and Stabilizers now represent less than 15% of total sales, having diversified away from heavy dependence on this category.

    Analyst downplayed

Q&A highlights

3 direct
Regional Growth Disparity (South vs. Non-South) Direct
I don't think there is any change in competitive intensity. I think it's just that last year, in Q3, the non-South region, especially East had a very strong performance for summer categories. So last financial year, we had a very, very strong performance from certain parts of non-South especially, the East, for summer categories. And this year, I think they have degrown. So that's primarily pulling down the non-South performance.

Clarified that regional growth differences were primarily due to a base effect from strong non-South performance in the prior year, rather than a change in competitive intensity.

Asked by Aditya Bhartia

Impact of Commodity Inflation on Margins and Pricing Direct
We see some risk in the Fans' category where this impact is very severe, coupled with new energy rating norms kicking in on 1st of Jan. So, there has to be significant price hikes in the Fans' category. We have already taken some increases and I think another 2- or 3-odd percent of increase is required before March. In the other categories, the impact is not so high because the usage of copper and aluminium is not so much.

Revealed specific categories (Fans, especially copper models) facing significant margin pressure from commodity inflation and the necessity for further price hikes, while other categories are less impacted.

Asked by Rahul Agarwal

BLDC Fans Strategy and Market Evolution Direct
So definitely, the delta, that means the difference between BLDC and Non-BDLC is shrinking because BLDC Fans require less; the motor design is very different and it requires less content. And most of the motors are made out of aluminium. So in that sense, BLDC Fans' price inflation will be relatively low, and the induction copper motors will be the highest. So definitely, like today, for V-Guard, maybe the BLDC sales may be 25-odd-percent of total sales. We will see that steadily increasing, but I don't think 100% will move to BLDC because BDLC still has some challenges or some acceptances' issues.

Provided insights into the shrinking price gap between BLDC and induction fans, V-Guard's current BLDC sales mix (25%), and the expected gradual shift towards BLDC, while acknowledging acceptance challenges in certain markets.

Asked by Aniruddha Joshi

3 min read 8 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

V-Guard Industries reported a consolidated net revenue of ₹1,404 crores for Q3 FY26, marking a 10.6% YoY growth. EBITDA (excluding other income) increased by 18.3% YoY to ₹123 crores, with the EBITDA margin expanding by 60 basis points to 8.8%. Gross margin, however, saw a 100 basis points contraction to 35.7% due to product mix. Consolidated PAT declined by 5.2% YoY to ₹57 crores, primarily impacted by a one-time exceptional charge of ₹22.11 crores for employee benefit obligations, though underlying PAT improved by 22% YoY.

Segmental Performance and Drivers

The Electricals segment, the largest revenue contributor, demonstrated robust 26% YoY growth, driven by volume expansion and higher copper prices. Within Electricals, Wires saw approximately 20% price growth and 10% volume growth in December. The Electronics segment reported largely flat revenues at ₹286 crores. Consumer Durables grew by 4.6% YoY, with water heaters performing well, offsetting subdued demand for fans and cooling products. Sunflame, the kitchen appliances brand, experienced a 9.9% YoY revenue decline due to market softness and weak CSD channel demand.

Raw Material Inflation and Pricing Strategy

The company is facing significant raw material inflation, particularly in copper prices, which have increased by almost 30% YoY. This volatility necessitates calibrated pricing actions. For the Fans category, an additional 2-3% price increase is expected before March. While Wires prices are dynamically adjusted, the high quantum of increase may mute volume growth. Stabilizers are expected to see a more manageable 1.5-2% price increase, as other crude derivatives and steel have softened.

BLDC Fans: Market Dynamics and V-Guard's Strategy

The price difference between BLDC and traditional induction fans is narrowing, as BLDC fans require less copper and often use aluminum motors, leading to lower price inflation. V-Guard's BLDC sales currently constitute about 25% of total fan sales and are expected to grow steadily, with a 5-10% annual shift from induction motors. However, management noted that 100% adoption of BLDC is unlikely soon due to acceptance issues and performance challenges in areas with violent voltage fluctuations.

Sunflame Integration and Outlook

The operational integration of Sunflame is complete, and sales integration is currently underway, expected to support future growth. The company acknowledges losing ground in CSD and CPC channels and challenges in e-commerce, which require a product portfolio refresh. Over the next 12 months, new models are being introduced. Customer service integration is also complete, improving service levels. Management is optimistic about Sunflame's future performance, aiming for decent growth in both general trade and organized retail.

New Category Initiatives: Solar Pumps and Gegadyne

V-Guard has entered the Solar Pumps business, securing its first order worth ₹4-5 crores from the Maharashtra State Government. The company intends to scale this business meaningfully over the next 12-18 months. Regarding Gegadyne, a technology company focused on energy storage, it is transitioning from technology development to commercialization. Gegadyne is expected to begin supplying small quantities to V-Guard within the next 3-4 months, offering a vehicle for V-Guard to participate in the emerging energy storage market.

Competitive Landscape and Market Share in Core Categories

In the Stabilizers category, V-Guard estimates a market share of 40-45%, with Microtech being the only serious national competitor. While AC companies often launch stabilizers, they tend to lose focus over time. The company has diversified its sales, with Stabilizers now contributing less than 15% of total sales. In Southern markets, competitive intensity is high due to organized retail and e-commerce, but V-Guard believes it is holding its ground and not losing market share.

Long-term Growth and Profitability Outlook

V-Guard aims for double-digit EBITDA margins if growth returns, potentially by FY27-end, assuming raw material inflation normalizes. The company identifies at least six categories (Stabilizers, Fans, Inverters & Batteries, Solar Rooftops, Kitchen Appliances) that can individually exceed ₹1,000 crores in sales. While not chasing volumes for market share, V-Guard focuses on profitable business and aims to be a top-3 player in specific segments like Decorative, BLDC, and Premium TPW Fans.

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