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We remain positive on V-Guard Industries Ltd. as we believe the electrical consumer durables segment margin is likely to expand over FY23-24 due to input price correction, higher scale of operations and better utilisation of Roorkee plant and lower effect tax rate in FY24-25.
The company has entered into water purifier category via the ecommerce channel and we model it to be a growth driver in medium-long term. Its new manufacturing facilities have reduced its dependence on third party manufacturers and will help drive premiumisation.
We continue to like V-Guard due to:
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its strong market shares in stabilizers, water heaters and pumps;
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investments in distribution and brand; and
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investments and likely success in kitchen appliances over the medium term.
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