BBN Bureau
Investment in VCPL, subsidiary, grows to Rs45 cr
KOCHI/February 03-2022: Weighed down by a large inventory to the tune of Rs126.24 crore during the third quarter (Q3), V-Guard witnessed a lower profit of Rs52.50 crore as against Rs59.06 crore for the second quarter of the current year and Rs77.01 crore for the same period last year.
The inventory during the second quarter was much lower at Rs33 crore and Rs41.30 crore for the same quarter last year.
In fact, the total income during Q3, FY22 was better at Rs963.63 crore compared with Rs905.69 crore for the previous quarter and Rs832.83 crore the company generated for the same period last year.
Commenting on the performance for Q3 FY22, Mithun Chittilappilly (seen in the picture), Managing Director – V-Guard Industries said, “During the third quarter, we have delivered 16 per cent year-on-year revenue growth. While the quarter started on a strong note with positive demand momentum in the festive season, emergence of the third wave caused growth to be muted subsequently.”
The impact was felt across our key markets and more so in the Eastern region, where the company has strong presence. Revenue growth was strong across electricals and consumer durable segments, while electronics showed a marginal decline during Q3.
The third quarter also saw the continuing impact of commodity price inflation on margins. “While we have taken several pricing actions to offset this to a large extent, some more price increases are required in the coming months to restore margins to normative levels,” Chittilappilly added.
During the quarter, V-Guard has made further investment to the extent of Rs 19.13 crore in V-Guard Consumer Products (VCPL), a wholly owned subsidiary taking the total investment to Rs44.63 crore.
A V-Guard release said the first manufacturing project undertaken by VCPL is currently under implementation and some other projects are in the pipeline.
These projects expected to reduce the company’s reliance on imports / OEMs and hence could deliver efficiencies over time.
