V-Guard Industri

V-Guard delivered a robust performance in Q4 FY26, with consolidated revenue reaching INR1,755 crores, marking a 14.1% year-on-year increase. For the full fiscal year, the company achieved a top-line growth of 7%, predominantly driven by strong performance in the second half. EBITDA for Q4 stood at INR171 crores, growing 19.3% year-on-year, while full-year EBITDA was INR527 crores, an increase of 2.6%. Consolidated PAT for Q4 was INR112 crores, up 23% year-on-year, though full-year PAT declined 1.7% to INR308 crores due to a one-off^📎 charge of INR22 crores in Q3 related to the new Labor Code. Excluding this impact, underlying PAT growth for the full year would have been 3.6%.

The Electronics segment, encompassing Stabilizers, UPS systems, Inverters, and Batteries, demonstrated strong growth of 22.3% year-on-year in Q4 FY26, with all categories contributing positively. The Electrical segment, V-Guard's largest revenue contributor, including Wires, Pumps, Switchgears, and Modular Switches, grew 15.9% year-on-year. In contrast, the Consumer Durables segment, which covers Fans, Water Heaters, Kitchen Appliances, and Air Coolers, reported a modest 4.1% year-on-year revenue growth, with Fans and Air Coolers experiencing a decline. Sunflame, a key acquisition, reported an 8.6% year-on-year top-line growth in Q4, with its non-CSD business growing by approximately 16%.

In Q4 FY26, revenue from South markets grew by 16.2% year-on-year, while non-South markets grew at 11.8%. For the full year, non-South markets contributed 48% to the total revenue. Management noted that the summer in Kerala has been supportive, and despite concerns about the West Asia war, no special impact has been observed in Kerala, which now accounts for about 15-16% of the company's revenue. The Eastern market for summer products, particularly Fans, did not grow in Q4, impacting overall performance, though April sales in South India were reasonably good.

Gross margins remained healthy at 35.3% in Q4, similar to the previous year, reflecting significant improvements over the last 3-4 years. However, the company faced substantial input cost increases, ranging from 8% to 13% across categories, driven by commodity inflation and supply uncertainty from the West Asia war. Approximately 75% of these price increases have been passed on to consumers, with the remaining 25% expected to be implemented as high-cost inventory hits in May and June. Management indicated that the industry has shown a broad-based reaction to price increases due to the high quantum of cost hikes and raw material shortages.

The integration of Sunflame is progressing well, with improvements observed in service, quality, and cost. Sales integration, which commenced in November-December, is showing early results in placing Sunflame products in more counters. The company is strengthening Sunflame's reach through V-Guard's sales network and capabilities. Product rollout benefits are expected to be more visible in the second half of FY27 and into the next year. V-Guard is also refreshing its product portfolio, addressing dated offerings, white spaces, and incorporating emerging technologies like BLDC in categories such as chimneys, though BLDC adoption in mixer grinders is slower due to limited usage.

V-Guard maintains a strong net cash position of INR231 crores as of March 2026, up from INR64 crores in the previous financial year. The company has completed debt repayments and expects to generate good free cash flow, with no immediate plans for acquisitions. The Board has recommended a final dividend of 150%, equating to INR1.5 per equity share. For FY27, V-Guard aims for 10-12% volume growth and 1-2% price growth, targeting an overall 15% revenue growth. Management is confident in achieving double-digit EBITDA margins in the medium term, provided raw material prices normalize and summer demand remains supportive.