Sharekhan's research report on V-Guard Industries
V-Guard posted strong net earnings growth led by higher revenue contribution of non-South region and benefitting from stable commodity and forex costs which led to improvement in OPM. V-Guard’s focus areas will be increasing non-South presence, expansion into adjacencies and improving efficiencies. Strong cash position may lead to inorganic expansion at favorable valuation considering weak environment. We expect revenue/operating profit/net profit to grow at 15.0%/25.7%/26.7% respectively during FY2019-FY2021E.
Outlook
We upgrade V-guard industries to Buy with revised PT of Rs. 280 increasing valuation multiple owing to presence of multiple growth levers.
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