Summary
V-Guard Industries Ltd. - Q3 FY 2026 Earnings Call Summary Thursday, January 29, 2026 4:00 PM IST
Event Participants
Executives 3 Mithun K. Chittilappilly (MD), Ramachandran V (Director & COO), Sudarshan Kasturi (Senior VP & CFO)
Analysts 6 Aditya Bhartia, Ankit Soni, Aniruddha Joshi, Ankur Sharma, Keyur Pandya, Naushad Chaudhary, Natasha Jain, Rahul Agarwal
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹1,404 crores | +10.6% YoY, driven primarily by robust growth in the Electricals segment. |
| EBITDA (Excl. Other Income) | ₹123 crores | +18.3% YoY, reflective of improved operational efficiencies and volume expansion. |
| EBITDA Margin | 8.8% | +60 bps YoY, improved from 8.2% despite gross margin pressures. |
| Gross Margin | 35.7% | -100 bps YoY, impacted by unfavorable product mix and rising commodity costs. |
| Consolidated PAT | ₹57 crores | -5.2% YoY, impacted by a one-time ₹22.11 crore exceptional charge for new labor codes. |
| Underlying PAT | ₹79.11 crores | +22% YoY, excluding the exceptional provision for gratuity and leave encashment. |
| Electricals Revenue | ₹— | +26% YoY, led by Wires (10% volume, 20% price growth) and Pumps. |
| Electronics Revenue | ₹286 crores | Flat YoY, as muted summer demand for stabilizers was offset by growth in other categories. |
| Consumer Durables Revenue | ₹— | +4.6% YoY, supported by water heaters while fans and coolers remained subdued. |
| Sunflame Revenue | ₹— | -9.9% YoY, reflecting softness in kitchen appliances and weak CSD channel demand. |
Geographic & Segment Commentary
- South vs. Non-South: The South region showed strong performance, while Non-South (particularly East) appeared muted. Management attributed this to a high base effect from the previous year’s strong summer category sales in the East.
- Electricals: This remains the fastest-growing segment, significantly aided by volume growth in Wires and price hikes tracking copper inflation. Dynamic pricing in Wires allows for passing through costs with a short lag.
- Sunflame (Kitchen Appliances): Currently undergoing sales and GTM integration with V-Guard. While CSD and e-commerce channels remain challenged, management expects a recovery as the 18-month product refresh cycle concludes.
Company-Specific & Strategic Commentary
- New Labour Code Provision: A one-time exceptional charge of ₹22.11 crores was recognized following a reassessment of employee benefit obligations (gratuity and leave encashment).
- Manufacturing Expansion: Key capex projects include a new fan manufacturing facility and a second battery facility in Hyderabad to increase the share of in-house production.
- BLDC Transition: Management anticipates a 5-10% annual shift from induction motor fans to BLDC technology. V-Guard aims to be a top-3 player in the premium and decorative BLDC segments.
- Technology & Start-ups: The investment in Gegadyne is moving from the R&D phase to commercialization, with small-scale supplies expected to begin within 3-4 months to support future energy storage offerings.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Margin | Double-digit target | Aiming for 10%+ as scale increases and commodity volatility (specifically copper) stabilizes by FY27. |
| Pricing Actions | 2% - 3% increase | Calibrated hikes planned for Q4 across the portfolio to offset rising copper and metal costs. |
| Summer Categories | Strong Rebound | High growth expected for Stabilizers and Air Coolers in Q4 FY26/Q1 FY27 based on early warm weather signals. |
| Product Refresh | 12-18 month rollout | Sunflame and Modular Switches categories are undergoing a portfolio refresh to drive scale. |
Risks & Constraints
| Risk | Context |
|---|---|
| Commodity Volatility | Copper prices have risen nearly 40% in a year; while Wires follow dynamic pricing, Consumer Durables margins may face a temporary lag in recovery. |
| Demand Elasticity | Sharp price hikes in Wires (up 30% YoY) may lead to volume softening as project customers and retailers adjust to higher price points. |
| Seasonal Dependence | A significant portion of the High-Margin Electronics (Stabilizers) and Durables (Fans/Coolers) sales depends on a favorable 4-5 month summer window. |
Q&A Highlights
Demand & Pricing
- Question: Is the market ready to absorb significant price hikes given the inflation in metals? (Rahul Agarwal)
- Answer: High-performance copper fans need 8-10% hikes, which may shift demand toward BLDC/Aluminium models. Wires have already seen a 30% value increase, leading to some volume caution from project customers (Mithun Chittilappilly).
Sunflame Integration
- Question: How should we model Sunflame numbers given the revenue dip? (Aniruddha Joshi)
- Answer: Sales and GTM integration began in November. While CSD remains weak, service levels have improved after integration, and a full product refresh will land over the next 12 months (Ramachandran V).
Segment Strategy
- Question: When will newer categories hit double-digit EBITDA? (Naushad Chaudhary)
- Answer: It is a matter of scale. Categories like Inverter Batteries have already reached scale and profitability; Fans and Kitchen will follow as investments in retail and people are absorbed over larger volumes (Ramachandran V).
Competition in Stabilizers
- Question: How do you view the entry of AC brands into the stabilizer market? (Natasha Jain)
- Answer: This has happened for 15 years. While AC brands enter and exit, V-Guard maintains a 40-45% market share, with growth now coming from newly electrified upcountry markets (Mithun Chittilappilly).
Key Takeaway
V-Guard delivered a steady quarter with 10.6% revenue growth, though reported PAT was weighed down by a one-time ₹22.11 crore labor code provision. The Electricals segment led the topline with 26% growth, balancing flat performance in the Electronics segment caused by a weak summer base. Strategically, the company is focusing on the sales integration of Sunflame and transitioning its fan portfolio toward BLDC technology, which currently accounts for 25-30% of fan sales. While gross margins contracted by 100 bps due to mix and commodity pressures, EBITDA margins improved 60 bps to 8.8%. Management remains optimistic about a double-digit EBITDA margin target by FY27, contingent on navigating the 40% YoY surge in copper prices through calibrated pricing. The outlook for the upcoming summer remains positive based on early warm weather trends in Southern India.
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