Plans to add yearly 3,000-5,000 retailers for next 5 years
KOCHI: V-Guard Industries, one of the most respected business houses in the state, reported 50 per cent growth in its Q2 net profit to Rs57.3 crore for the period ending September 30, 2019 compared with Rs38.18 crore for the same period last year.
The revenue during the period grew 3.6 per cent to Rs619.3 crore despite prevailing weak consumer demand conditions.
The networth of the company has grown from Rs799.7 crore to Rs963.05 crore – a growth of 20.43 per cent. Interestingly, the total debt of the company remains very low at Rs10 crore as of September 30, 2019.
Electricals segment contributed Rs276.8 crore to the total revenue of the company forming 44.7 per cent of the revenue base for the period under review.
While the contribution from electronics was at Rs167.6 crore which represented 27.1 per cent, that from consumer durables was to the tune of Rs175 crore, accounting for 28.3 per cent of the company’s top-line.
The company said it envisages adding 3,000-5,000 retailers across the country every year over the next five years with higher addition in the non-South region which is expected to contribute up to 50 per cent over the next five years. .
Commenting on the performance for Q2 of the current financial year, Mithun Chittilappilly (seen in the picture), Managing Director, V-Guard Industries said the second quarter saw significant weakness in consumer demand, tight liquidity conditions and reduced discretionary spending, which impacted the company’s overall top-line performance – especially in South markets that saw another year of seasonal weakness due to the floods.
“Despite prevailing challenges, some categories such as stabilizers, wires and pumps performed well. Pricing actions taken over the preceding quarters and focus on premiumization of the portfolio have enabled us to expand gross margin by more than 400 basis points. We have also benefited from the increasing contribution from in-house manufacturing, stable currency and benign commodity prices,” he added.