At a Glance
V-Guard Industries – the once humble stabilizer king – just released its Q1 FY26 results, and the stock slipped 1.6% because the numbers were as exciting as a power cut. Revenue was ₹1,466 Cr (-0.7% YoY), while PAT plunged 25% to ₹73.8 Cr. Margins stayed stuck at 8%. With the Sunflame merger and a new lighting business on the horizon, the company is reinventing itself, but for now, investors are just hoping this “innovation” doesn’t turn into another extension cord.
1. Introduction
Founded in 1977, V-Guard started by saving TVs from power surges and grew into a diversified consumer durables brand. It’s in electricals, electronics, and consumer durables, ranging from pumps to water heaters. Great, right? But FY26 started with a flat revenue line and a profit drop that stings harder than a faulty wire.
The stock trades at ₹381 – and a P/E of 57 screams “overpriced”. Unless the Sunflame merger and lighting division shine bright, investors may soon unplug.
2. Business Model (WTF Do They Even Do?)
V-Guard sells:
- Electricals (37%): Wires, pumps, switchgear.
- Electronics (Voltage stabilizers): The OG product, still contributing decently.
- Consumer Durables: Geysers, fans, kitchen appliances.
The company thrives on branding and distribution. Weakness? Thin margins and price-sensitive markets.
3. Financials Overview
Q1 FY26:
- Revenue: ₹1,466 Cr (-0.7% YoY)
- EBITDA: ₹124 Cr (margin 8%)
- PAT: ₹73.9 Cr (-25.4% YoY)
- EPS: ₹1.69
Annual FY25 revenue stayed flat at ₹5,567 Cr, while PAT fell to ₹289 Cr. Growth engine? Needs spark plugs.
4. Valuation
Valuation is richer than its profit trend:
- P/E Method: EPS ₹6.6 × industry multiple 30 → ₹200
- EV/EBITDA: EBITDA ₹481 Cr × 20 → EV ₹9,620 Cr → ₹275/share
- DCF: Assuming 10% growth, discount 12% → ₹240
Fair Value Range: ₹240 – ₹275
CMP ₹381 = stock priced for innovation that hasn’t arrived yet.
5. What’s Cooking – News, Triggers, Drama
- Sunflame merger: Expected synergies in kitchen appliances.
- New lighting division: Hoping to brighten revenue.
- Cost pressures: Inflation still zapping margins.
- Risks: High valuation, muted growth.
6. Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 2,899 | 3,152 | 3,329 |
| Liabilities | 788 | 936 | 1,098 |
| Net Worth | 1,771 | 2,054 | 2,098 |
| Borrowings | 503 | 401 | 134 |
Auditor’s Roast: Debt has almost vanished – at least one thing shining here.
7. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 424 | 393 | 477 |
| Investing | -771 | -153 | -97 |
| Financing | 326 | -232 | -378 |
Commentary: Strong ops cash, but financing shows cash outflow – mostly dividends and buybacks.
8. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 15% | 16% | 16% |
| ROCE | 18% | 20% | 20% |
| P/E | 47 | 55 | 58 |
| PAT Margin | 4.3% | 5.2% | 5.1% |
| D/E | 0.3 | 0.2 | 0.06 |
Verdict: Ratios okay, valuation not okay.
9. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 4,127 | 4,857 | 5,567 |
| EBITDA | 320 | 428 | 481 |
| PAT | 189 | 258 | 289 |
Commentary: Revenue rising, profits crawling.
10. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Voltas | 15,413 | 823 | 53 |
| Blue Star | 11,968 | 585 | 61 |
| Crompton | 7,864 | 556 | 38 |
| V-Guard | 5,567 | 289 | 58 |
Commentary: Highest P/E in peer set with modest profits.
11. Miscellaneous – Shareholding, Promoters
- Promoters: 54.3% (slightly down)
- FIIs: 12.6%
- DIIs: 21.6%
- Public: 11.6%
Institutions still have faith, but promoter trimming is a warning signal.
12. EduInvesting Verdict™
V-Guard is a solid brand with pan-India reach and a reputation for quality. But FY26 started with revenue stagnation and profit erosion. The Sunflame merger and lighting entry might inject growth, but until results show up, investors are paying a premium for potential, not performance.
SWOT Snapshot:
- Strengths: Strong brand, debt-free, wide distribution.
- Weaknesses: High valuation, low margins.
- Opportunities: New businesses, premium product push.
- Threats: Competitive pricing, consumer demand volatility.
Investors: Hold your wires tight – this stock is buzzing on hope.
Written by EduInvesting Team | 29 July 2025
SEO Tags: V-Guard Industries, Consumer Durables, Q1 FY26 Results, Stock Analysis
