The consumer electrical and electronics company V-Guard has released it’s Q1FY17 results. V-guard has posted a net profit increase of 70%, despite a growth of only 14.70% in its revenue year on year. The company improved its operating margin from 7.93% in Q1FY16 to 10.46% for the current reported quarter.
The other major analysis points are:
The cost of materials has come down drastically, cost of materials accounted for 25.04% of the net sales, where as for the same quarter previous year the cost of materials accounted for 29.66% of the net sales.
The Company’s electronics segment has been the minting machine for the company. While only 17.41% capital is employed on it, the Electronic segment brings in 38.49% of total revenue accounting for 51.5% of the profit.
The company is almost debt free with only Rs 58 lakhs as its finance cost, which is quite negligible for company of that size.
The sales was good due to products like fans, pumps and stabilizers.
It plans to launch gas stoves in coming quarter with outlook on festive season and strong consumer demand in the segment. With the government’s focus on LPG expansion, the gas stove business should get a leg up.
It is streamlining with backward integration by setting up in house PVC compounding unit at Coimbatore.
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