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Reduce V-Guard Industries; target of Rs 180: Dolat Capital

Reduce V-Guard Industries; target of Rs 180: Dolat Capital
July 31
03:24 2020

Dolat Capital recommended reduce rating on V-Guard Industries with a target price of Rs 180 in its research report dated July 28, 2020.

Dolat Capital’s research report on V-Guard Industries

V-Guard saw Sales declined 42% at Rs4bn, while EBIDTA was down 87% at Rs91mn. EBIDTA margins were down 794bps yoy at 2.2, while PAT was down 93% at Rs36mn. However, WC improved sequentially on the back of inventory drawdown and better collections in the quarter. 72% of its portfolio, contributing 83% of its profits, depend on growth of other products like ACs and appliances or geared towards long cycle recovery plays like real estate. We trim our FY21 estimates to factor in the weak Q1 numbers (Refer Exhibit 2).

Outlook

While V-Guard is a well-run company with quality management, given the longer recovery cycle, we maintain Reduce with a TP of Rs180, valuing it at 38XFY22E.


For all recommendations report, click here

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First Published on Jul 30, 2020 06:58 pm

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