V-Guard Q4 net soars two-fold to Rs 42 cr

Consumer electricals and electronics company V-Guard Industries today reported an over two-fold jump in net income at Rs 41.97 crore for the March quarter driven by a surge in margins on lower input cost.
"The good set of numbers are driven by a 410 bps improvement in margins which rose to 12.5 per cent in the reporting quarter on lower commodity prices, while for the full year, margins rose to 9.9 per cent from 8 per cent," V-Guard Managing Director Mithun K Chittilappilly told PTI.
Lower commodity prices alone contributed to 2 percentage points rise in margins, he said, adding supply chain improvements and operational leverages also helped the company.

He also attributed rise in profits to lower fixed cost as the company has almost completed its capex plans.
Its two capacity addition projects in Coimbatore are near completion and will be commissioned by the third quarter, he added.
The company had posted a net profit of Rs 20.07 crore in the fourth quarter of 2014-15. Net sales rose 16.04 per cent to Rs 510.07 crore during the quarter under review from Rs 439.53 crore a year ago.

"Business outlook remains positive... Considering the favourable situation. We plan to launch mixer grinders in Tamil Nadu and introduce a new product line, gas stoves, in the kitchen appliance category in Kerala during the first quarter (of 2016-17)," Chittilappilly said.

For entire 2015-16, net income rose to Rs 111.68 crore from Rs 70.72 crore in the previous fiscal, up 58 per cent, while net sales grew to Rs 1,849.77 crore from Rs 1,730.47 crore in 2014-15.
"Stabilisers, fans and pumps have performed exceptionally well during the quarter. Also, the favourable market conditions, lower commodity prices and better sales volume have led to significant margin improvement. Non-South business has shown significant improvement in bottom line," he added.
Chittilappilly said he expects 12-15 per cent spike in sales this fiscal, with margins of 9.5-10 per cent.
He said the company will be entering a new category -- cooking stoves -- this year and the product will hit Kerala before Onam.

The glass-top stoves will be initially made by a contract manufacturer at Baddi in Himanchal Pradesh, he added.
V-Guard also declared a final dividend of Rs 2.5 per share for 2015-16. V-Guard shares closed 3.40 per cent up at Rs 989.10 on BSE.