V-Guard's Q3 results: Revenue jumps 32% to Rs 835 crore

Consumer electrical and electronics company V-Guard Industries said on Wednesday its consolidated net revenue for the quarter ended December 31, 2020 totalled Rs 835 crore, up by 32 per cent from Rs 632 crore in the corresponding period of previous year.

The profit after tax moved up by 77 per cent to Rs 78.25 crore from Rs 44.24 crore in Q3 FY20.

Stabilisers, wires, fans, pumps, kitchen appliances, and digital UPS categories performed well, said the company.

Electric water heaters saw moderate growth due to the Covid-related disruption at the factory which impacted supplies during the early part of the quarter.

Cashflow from operations continues to be strong, arising from prudent working capital management.

"Improved consumer sentiment, festive season, and share gain from unorganised sector have driven growth during the quarter," said Mithun K Chittilappilly, Managing Director of V-Guard Industries.

However, a sharp increase in commodity prices led to a slight drop in gross margins. "We will continue to take appropriate pricing actions, depending on the situation in the coming months. Our channel partners remain robust and healthy as we prudently manage inventory and receivables."

Chittilappilly said the company expects good performance to continue into the last quarter of this financial year, considering the broad-based recovery in the macro environment and strong traction in focus categories.

V-Guard follows an asset-light model, outsourcing nearly 58 per cent of its products from a range of vendors. It has tie-ups with small scale industries and self-help groups spread across southern India.

The blended manufacturing policy helps optimise capital expenditure and working capital requirements.